With an estimated $1 billion in buying power, African-American consumers are some of the most sought after in business. A new report from the Nielsen company suggests that with increases in income and education, Black consumer buying power is projected to grow by $100 million by in just two years. By 2015 African-American buying power is estimated to be $1.1 billion.
According to the Nielsen study, “African-American Consumers: Still Vital, Still Growing,” the African American population’s growth outpaces the rest of the population by 30 percent. The demographic is also increasingly younger, more educated and has higher incomes than commonly believed. Between 2000 and 2009, the number of African Americans attending some college or earning degrees has grown to 45 percent of men and 54 percent of women.
“The Nielsen report is very encouraging because it shows the African American population is a tremendous financial asset to this country’s economic recovery,” said Calvin Harris, Jr., President and CEO of the National Association of Black Accountants.
African Americans are also dramatically increasing their net wealth. Households earning $75,000 or more grew by more than 60 percent, faster than the rest of the population. African American’s average income nationwide is $47,290.
Increasing income and education have led to notable online trends. During July 2011 there were 23.9 million active Black internet users: 76 percent visited social networking sites and 54 percent visited a travel site.
Mass merchandisers gained 50 percent of the on-line users, the other 50 percent spent time on current events and global news sites. While on-line nearly 13 percent made airline purchases or reservations; just under 10 percent made hotel reservations.
The Nielsen Company study, commissioned by the National Newspaper Publishers Association, sheds light on the economic potential of African Americans and the important trends in this community. The report’s findings will be presented at the June conference of the National Association of Black Accountants conference in Nashville.
The Nielsen study showed numerous shopping trends, mostly for household, health and beauty, travel, smart phones and child related items.
The study also found that Blacks have an average of four television sets per household and prefer premium cable channels. Forty-four percent of all new mobile phones purchased by African-Americans are smartphones. Sixty-eight percent used their smartphones for shopping information.
There are 43 million African Americans in the United States, which translates to 13.7 percent of the total population, the second largest racial minority in the country. The median age is 32 and 47 percent are under 35 years of age.
The National Newspaper Publishers Association and National Association of Black Accountants asserts that even with this demonstrated buying power many mainstream advertisers are not inclusive, do not include African Americans in media and marketing plans and have underestimated the market size.