Hispanics and Money… Less Optimistic in 2014 than in 2013, but Planning on Spending More
Hope
According to the ThinkNow Research Hispanic Omnibus survey*, U.S. Hispanics are optimistic about their future for the second year in a row, though a little less so this year than last. In early 2013, when asked about their own financial situation and how it would fare in the coming year, 51% of all respondents said they anticipated in would improve (vs. 2012). This year, however, the market research shows that optimism is off a little, with only 46% expecting an improvement. On the other hand, only 9% think it will be worse (same both years).
There are some interesting subsets (related to optimism for the coming year) in the 2014 data… younger Hispanics are more optimistic than older ones, consumer sentiment in the South is the most optimistic of the geographic regions and overall, the most optimistic group is the lowest-acculturated Hispanics, with 61% expecting 2014 to be a better year than 2013. Why is that?
Additionally, Hispanics are a more optimistic group than their non-Hispanic counterparts, where only 42% feel their personal financial situations will improve in 2014 and 13% believe it will get worse.
Plans
But what’s really fascinating about these results is that, despite a small drop in optimism, spending plans (for big-ticket items) are up across the board.
While big-ticket purchases were strong across the board in 2013, they were generally off from purchases in 2012, as well as being dramatically below their planned purchase behavior. In 2014, though, not only are planned purchases dramatically up over actual 2013 purchases, they are up in nearly all categories over the planned purchases set last year! The Hispanic community is clearly optimistic about the personal financial situations and are ready and willing to spend in 2014!
Green or frugal? One interesting note from 2013 – related to those who purchase a new car or truck… 85% said that their decision to purchase a brand new car or truck was motivated in whole or in part by the desire to get better gas mileage.
How does this compare to non-Hispanics? It’s an interesting mixed bag. While non-Hispanics are planning on spending more than Hispanics on those things with a plug (computers, tablets and smart phones), Hispanics are planning on buying homes at a much higher rate, 19% vs. 12%).
Big Picture
Beyond their own financial situation, this market research study also explored Hispanic consumers’ concerns about some broader issues related to the US economy, including the Availability of Jobs, National Budget Deficit, Rising Prices, the Housing Market and Financial Markets. While optimistic about the economy and willing to spend, Hispanics have their fair share of worries, as well. Just like last year, their two biggest concerns moving into 2014 are the items with the most personal impact – jobs and rising prices.
As mentioned earlier, non-Hispanics are a little less optimistic about their financial situation than Hispanics… and that pessimistic feeling continues on these broader issues, as well. For example, 39% of non-Hispanics are concerned about jobs (compared to 35% for Hispanics), while 38% are concerned about rising prices (compared to 29% for Hispanics). The one area of less concern has to do with the housing market (3% vs. 10% for Hispanics)… but this really is no surprise, given that a higher percentage of Hispanics plan on purchasing homes this year.
Bottom Line
While actual purchases in 2013 didn’t match expectations and we don’t know what will happen in 2014… get ready! Given the Hispanic community’s optimism, clear plans to spend and the enormous amount of money they control… manufacturers, retailers and their ad agencies and consumer insights teams must plan for and communicate appropriately with Hispanics in 2014 if they are to be successful.
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