America is nothing if not a nation of resiliency. Our economy's dynamic convalescence during and after the recession has added to America's long, storied history of triumph amidst adversity. Consumer market studies echo that sentiment.
Nevertheless, we are not without mementos of leaner days that weren't even that long ago and that for some linger as daily obstacles. We at times cope with these persistent socio-economic challenges by therapeutically referring to them with feel-good phrases such as "the new normal". For retailers in the U.S., the realities of the new normal have them operating in a climate where unemployment is high (especially among minorities) and disposable income is lower for the average American family than in pre-recession years.
Though Facing An Unemployment Crisis, A Potent Consumer Demographic Remains
The high unemployment rate among African Americans has been at the epicenter of concern nationwide. In a market study from The Bureau of Labor Statistics' Economic Situation Summary for April 2013 reveals that the unemployment rate for African Americans is 13.2%. With the exception of teenagers, African Americans have a higher unemployment rate than any of the other "major work group" classified by the BLS, with a percentage almost equal to the combined unemployment rate of two other major minority groups: Hispanics (9.0%) and Asians (5.1%).
Though Obama's time as president hasn't yielded (for a variety of reasons) the fiscal and vocational utopia for African Americans that some envisioned, the demographic segment remains a potent part of the consumer landscape. Market research firm Nielsen estimates the buying power of African Americans will be $1.1 trillion by 2015, ahead of Nielsen's estimates for Asian consumers in 2015 and comparable to estimates made by market research firm Packaged Facts regarding the Hispanic community's present-day buying power. Considering that when African Americans spend, it is often on high quality, trendy, and brand name products, this demographic has the potential to be retail industry game-changers under the right circumstances.
Economic Optimism Still Strong
Consumer optimism is naturally an essential component to generating economy-boosting consumer spending. An upcoming market research report by Packaged Facts on African Americans reveals that compared to other consumers, African Americans are three times as likely to strongly agree that the economy will be significantly better off in the next 12 months--a positive sign for retail industry players.
Perhaps just as important, African Americans' optimism about the future is inexorably pinned on their continued support for the president. According an April 2013 article published by lifestyle website MademNoire, African Americans in general are confident about life and the economy under Obama. The article includes a poll indicating that 91% of African Americans view President Obama favorably, and 72% say that Obama's ascension to the White House has helped them compared to 4% who say the opposite. From a financial standpoint, the poll reveals that 30% of African Americans claim to be better off financially than they were four years ago, while 48% say their financial status is unchanged. Only 19% say they are worse off financially.
Regardless of our optimism or enthusiasm, we typically can't spend money that we don't have--especially with noticeable shifts we've witnessed in how consumers utilize forms of credit post-recession. The high unemployment rate among African Americans presents a disconcerting conundrum for retailers as the demographic's willingness to spend is tempered by the relative shortage of disposable income.
I may lack a soothsayer's clairvoyance, but I suspect that we will see a resurgence in employment figures that will help African Americans reach--and perhaps even surpass--their $1.1 trillion projected buying power. The windfall is nigh. Smart marketers will continue to advertise to African Americans even in this economically bleak hour. Those who have money spend, and those who presently are on fixed or no income budgets will be eager to spend once their financial status improves--assuming they aren't already finding small luxuries to splurge on to retain some level of normalcy.
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