The Latino Shift

  |  March 15, 2011   |  Comments

A look at Latino social dynamics and the implications for marketers in light of the increase in the Hispanic contribution to the overall U.S. population growth.

Since I wrote my last column, the Hispanic contribution to overall U.S. population growth has increased from 51 percent to 56 percent. Yes, in just two weeks, as the U.S. Census Bureau continued releasing information per state, the #shift in America's demographics is getting more dramatic. And to help spread the news, what better way to start but by sharing some insights in the form of 140-character tweets? Tweet this:

  • Now we are counting: the information for 32 states has already been released, representing 68.2 percent of the overall population. #shift
  • A confirmed trend: Hispanics contributed 59 percent of the overall population growth in 32 states. #shift
  • The Hispanic population in 24 out of 32 states currently released has increased by over 50 percent between 2000 and 2020. #shift
  • Hispanic population under 35 years old grew 51.5 percent in the last two decades versus a 7.3 percent growth for non-Hispanic whites. #shift
  • Forever young? While most of Latinos (61.8 percent) are still under 35 years old, the number has reduced significantly (68.7 percent in 1990). #shift
  • Arizona, Texas, and California are among the states with the smallest change in Hispanic population; however, Hispanics make up 30 percent or more of their total populations. #shift
  • Of the states that have been released, Alabama, Arkansas, North Carolina, Maryland, Mississippi, and South Dakota all have Hispanic growth above 100 percent. #shift

This new demographic landscape will certainly impact both "aficionados" and newcomers in terms of how they allocate marketing dollars and the role that Latinos play in their overall strategy. But in order to succeed, marketers need to go beyond the usual marketing variables; they need to understand the whole social environment and its impact on Hispanics and vice versa.

Latino Social Dynamics

1. Education: Help me help you. One of the biggest challenges comes in the education arena. Many kids start kindergarten without knowing how to speak English, and teachers don't know how to communicate with them. Once the barrier is broken and kids become more proficient, a new issue arises; parents that are not as proficient in the English language can't help their kids with their homework.

  • Are you kidding? About one out of four 5 year olds will be Hispanic. #shift
  • Schools face linguistic challenges: 78 percent of 5 year olds speak English at home (versus 81 percent in 2000). #shift
  • Bridge the gap. In some districts, 40 percent of kids are Latino, but only 4 percent of their teachers are. #shift

2. Social Security: The two sides of the coin. With the Hispanic population growing at a rate that exceeds projections, and with over 60 percent of Latinos under the age of 35, there is no doubt that Hispanics are making significant contributions to the Social Security fund. This has been the side of the coin that most of the media has been focusing on.

The other side is that, because of their relative youth, Latinos would be disproportionately affected by any changes to Social Security that imposes a new structure on younger people.

  • Latinos are far behind compared to non-Hispanics to having access to retirement plans at work. #shift
  • With 58.7 million beneficiaries, Social Security is the primary source of income for 64 percent of recipients. #shift
  • Without Social Security benefits, the poverty rate among Latino elderly can triple. #shift

3. Politics: The power shift. While the population grew almost 9.7 over the last 10 years, the number of seats in the House of Representatives will stay the same at 435. Yet, when you look at it from a state-by-state basis, the picture is completely different. Take, for example, the changing demographics of the southwest: there are more Latino voters and fewer white voters. Latinos tend to lean more on the Democrat side. How will this trend impact politics moving forward?

  • Whites' share of the electorate is declining (down to 74 percent in 2008 vs. 81 percent in 2000), while the Hispanic share keeps growing. #shift
  • Texas, whose population increased by more than 20 percent, is the biggest winner: gaining four House seats. #shift

Location, location, location. While Latino presence continues to expand both in traditional and non-traditional Hispanic DMAs, retailers need to constantly adapt. Latinos are not one-stop shoppers; they love to shop and they are not as price sensitive in certain channels. This is more obvious in the CPG category where they spend 14 percent more than the general population, especially on food.

Hispanics are also much more social, sharing their experiences and where they bought ethnic products. They are very brand-oriented: they look for brand names from their country of origin and also for major American brands. They might skip buying a category if their favorite brand is not available at a specific store. A retailer might lose a Latino customer if their favorite brands are not being offered on a regular basis.

  • Latino consumers tend to shop three or four times a week, compared to once a week for Anglos, but with less money per transaction. #shift
  • Shopping for Latinos is not about a list, but to fulfill experiences, desires, and enjoyment. #shift

5. Urbanism: The new good neighbor. As the U.S. population and the country's infrastructure evolve, urban planners are facing new challenges. Urban planners are ahead of the trend in understanding the key role Hispanics are playing: using them in pilot programs to test new urban models. "Latino New Urbanism" is an approach to urban planning that might include small lots, houses located close to main roads, front porches, compact neighborhoods, and public spaces. Pioneered by James Rojas, the notion of "Latino New Urbanism" is a way of understanding community, public spaces, and neighborhoods, taking into consideration the preferences and culture of Latino immigrants.

  • Latinos have been transforming U.S. communities for decades and are, in many cases, the majority. #shift
  • Nearly half of the Hispanic population in the U.S. now lives outside the traditional Hispanic DMAs. #shift

Implications for Marketers

I think it would be a good idea to finish this column the same way I started: with ready-to-tweet insights. I hope you join the conversation and share your thoughts.

  • Companies can play a more active role in urban planning and engage Latino communities at an early stage. #shift.
  • Bilingualism is a great opportunity! Brands can leverage it by engaging with schools and the educational community. #shift.
  • Latinos are becoming a key target to define the future of elections. How can brands benefit from this #shift in politics?
  • Demographic #shift? Retailers need to rethink their approach and offerings to succeed in this demographic landscape.

Tweet that.

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ABOUT THE AUTHOR

Gustavo Razzetti

Gustavo Razzetti is EVP, Managing Director of Lapiz, the Latino shop of Leo Burnett. He has 20+ years of experience in integrated marketing communications in U.S. and Latin American markets.

A change agent, with the expertise of transforming agencies into digital at the core shops, Razzetti has become one of the leading voices when it comes to understanding the new market dynamics of US Latinos.

Former Chief Strategy & Engagement Officer at Grupo Gallegos, president of GlobalHue NY and CEO of Euro RSCG Latino. Razzetti's career is marked by extensive experience working with top consumer brands such as Comcast, Walgreens, Verizon, Nestlé, Chivas Regal, General Motors, Coca-Cola, and BBVA, and 200 others. He also served as CEO of Euro RSCG both in Puerto Rico and in Argentina. Prior to that, Gustavo was CEO and founding partner of WhyNet - the no. 1 interactive agency in Argentina.

Strategist by conviction, digital pioneer by choice, leader by evolution; Razzetti has received recognitions that include Effie awards, Gran Prix AMBA, Euro RSCG's CBI Award, and Strategic Planning Director of the Year, McCann Erickson. Many of the campaigns he strategically led won Cannes, Clio, New York Festival, London, and FIAP awards, among others.

On a personal note, Gustavo loves scuba diving, bicycling, gourmet cooking, and fine wines.

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