The past year has been a roller coaster ride for multicultural marketing practitioners. From the recent Supreme Court ruling on affirmative action to increased scrutiny of diversity, equity and inclusion (DEI) initiatives, companies are carefully assessing how these factors will impact their multicultural marketing budgets. ThinkNow shares this curiosity and has recently surveyed corporate decision-makers in multicultural marketing and multicultural consumer research, aiming to understand how they are strategically navigating the current landscape.
Download the report here.
Multicultural marketing budgets are on the rise. Two-thirds of respondents plan to maintain or increase their multicultural marketing budgets in 2024. The driving force? Opportunity. Recognizing the economic power of diverse consumers and demographic shifts, companies see multicultural marketing as a key growth strategy.
Among the reasons cited by the 31% of respondents who plan to increase their budgets are identifying new business opportunities, acknowledging cultural influence on their business, and a desire to better represent and impact diverse audiences.
Additionally, respondents highlighted the importance of staying ahead of cultural trends and consumer behaviors to remain relevant and effective in their marketing efforts. This includes understanding the nuances of different cultural identities and tailoring messaging and campaigns accordingly. Companies recognize that cultural relevance is not only a matter of inclusivity but also a strategic imperative for engaging and retaining diverse consumer segments.
Interestingly, nearly 40% of respondents intend to maintain their 2023 budgets, indicating a continued commitment to multicultural marketing. This demonstrates a continued recognition of the economic significance of multicultural consumers and the importance of targeting this segment effectively.
However, amidst the optimism surrounding budget increases, there are challenges and instances of caution. Eighteen percent of multicultural marketing decision-makers plan to decrease budgets, citing general cost-cutting measures and clients shifting towards broader "general population" strategies. Among the reasons given by the minority who stated they’re reducing their budgets were:
Moreover, there is a growing emphasis on accountability and measurement in multicultural marketing efforts. Companies are increasingly leveraging data and analytics to evaluate the effectiveness of their campaigns and ensure they are resonating with diverse audiences. This includes monitoring key performance indicators such as brand awareness, consumer engagement, and sales lift among multicultural segments.
Still, 1 in 4 companies are adapting their approach. The cost of “getting it wrong” has increased in recent years. No one wants to be in the position Budweiser was in after boycotts erupted in response to their partnership with a trans influencer. In response, some companies are taking a more cautious approach, while others are conducting more research before launching new campaigns.
Key Takeaways:
What does this mean for the future? While challenges exist, the prevailing sentiment among many practitioners is that multicultural marketing represents a pivotal avenue for growth. Companies adept at strategically maneuvering through these changes and placing a premium on comprehending diverse consumer demographics will undoubtedly find themselves poised for success.
The 2023 holiday shopping season kicked off strong, with Adobe Analytics reporting a record $9.8 billion in Black Friday online sales, up 7.5% from 2022.Cyber Monday numbers were even stronger, with consumers spending $12.4 billion, a 9.6% increase over last year. So, what does this mean for December sales and the rest of the holiday shopping season? ThinkNow recently conducted a nationally representative quantitative survey of 1,500 consumers revealing insights into what Americans buy and spend for the holidays. From shopping habits to spending patterns, let's delve into the top five trends shaping the 2023 holiday shopping season.
Download the report here.
The changing consumer landscape presents challenges and opportunities during the holiday season. Our findings suggest that businesses should focus on the following strategies to engage multicultural consumers during this time to build goodwill that could spill over to other peak spending seasons:
The 2023 holiday shopping season is starting strong, with several key trends emerging. Early birds are taking advantage of extra discounts and promotions, while spending sentiments are mixed due to economic uncertainties. Online shopping continues to dominate the landscape, with over half of consumers planning to purchase online. This presents a unique opportunity for businesses catering to multicultural consumers who are expected to drive significant growth during the holiday season.
Download the full report here for a deep dive into the findings and more cultural insights.
Programmatic media buyers know that multicultural audiences are a rapidly growing and vital market segment. However, advertisers also know that targeting these audiences can be challenging, especially for those lacking cultural competence. Cultural competence is essential for programmatic media buyers aiming to reach multicultural audiences effectively while avoiding costly mistakes.
Cultural competence is the ability to understand, appreciate, and interact with people from cultural backgrounds, values, and beliefs different from one’s own. While necessary for companies and brands aspiring to reach and engage multicultural audiences meaningfully, cultural competence is essential for programmatic media buyers who rely on data-driven strategies to target their ads.
The absence of cultural competence in the multicultural data era can have negative consequences for marketers, so it’s important to remember the following:
Advertisers unaware of these biases could end up targeting ads to the wrong people or using offensive language in ads, risking the company’s brand reputation and alienating the target audience.
Wondering how to employ cultural competence when using programmatic media to reach multicultural audiences? Here are a few valuable tips:
By following these tips, advertisers can use programmatic media to reach and engage multicultural audiences respectfully and effectively.
The beauty industry has transformed in recent years driven by consumer demands for products that align with their cultural values and personal beliefs. While the top cosmetic brands continue to be L’Oreal and Estee Lauder, they are being challenged by younger, edgier brands like Selena Gomez’s Rare Beauty, Rihanna’s Fenty and e.l.f. Cosmetics. Consumer opinion, however, is not homogeneous. There are significant differences in preferences based on ethnicity, age, income and gender. ThinkNow uncovered some of those differences in our recent Inclusive Beauty Report based on a nationally representative online survey of 2,800 respondents.
Download the full results of the survey here.
The era of conscious consumerism has brought about a major shift in the beauty industry. Increasingly, consumers seek products that align with their values, whether minimizing harm to animals, supporting sustainable practices, or promoting inclusivity. This has led to a growing demand for cosmetics and beauty products that are cruelty-free, meaning they are not tested on animals and that are considered inclusive.
Interestingly, while nearly half of cosmetic consumers want cruelty-free brands, 88% of them are still not cruelty-free. However, the fastest growing brands like e.l.f. and Rare Beauty are both cruelty-free and vegan. Legacy companies that want to compete in today’s market are being pushed to adopt these practices in their formulations and testing processes.
While the market as-a-whole is trending towards conscious consumerism, there are significant multicultural differences. For example, the demand for all-vegan cosmetics appears to be driven by non-Hispanic White consumers.
Additionally, since non-Hispanic Whites are, on average, ten years older than multicultural Americans, 42% of them choose brands based on how they address age-related needs vs. 30% of Hispanics who value age-related needs. Asians value products that offer solutions for different skin tones (37%) vs products that are endorsed by celebrities (15%) while Black and non-Hispanic White consumers are more likely to value brands that have a variety of price points. Understanding and addressing these specific preferences, as supported by cultural consumer insights, is crucial for building a loyal customer base.
One might assume that younger consumers would be most interested in conscious consumerism. Gen Z however, is much less likely to seek out vegan cosmetic brands (19%) than Millennials (33%) or Gen X (31%). Gen X is more likely to seek out organic/natural ingredients (41%) than the 36% average for other age groups.
Income, however, is one of the factors that most affect cosmetic product preferences. For example, those earning more than $80K a year are significantly more likely to choose brands that are cruelty-free (53%) and vegan (42%) than those earning less than $40K annually (39%) and 21%), respectively. This insight-driven approach doesn't just enhance product offerings; it also builds trust and loyalty among diverse consumer groups.
The beauty industry's shift towards cruelty-free, vegan, and inclusive beauty products aligns with trends observed in multicultural consumer insights. Younger generations are the most statistically diverse in history and wield the power to affect change. They are communicating their expectations to brands or starting their own and challenging heteronormative stereotypes of “beauty.” Companies willing to adapt to these culture shifts will stay relevant as consumer tastes change and contribute to a more compassionate and diverse world.
As digital marketing continues to evolve, creating personalized marketing experiences for consumers has become critical to successful marketing strategy. In the past, marketers relied on tools like third-party cookies to personalize the customer journey. But with cookies going away in 2024, it’s more important than ever to collect zero-party data to create those personalized marketing experiences while respecting consumer privacy.
Equally as important, however, is the use of multicultural data. The U.S. is becoming increasingly diverse, with much of that growth driven by young consumers. Using multicultural insights helps to personalize their experiences, thus creating stronger bonds that ultimately improve business outcomes.
According to the U.S. Census Bureau, multicultural consumers currently represent approximately 40% of the U.S. population and are projected to account for 55% of population growth over the next five years. Therefore, brands looking to succeed in the U.S. market must understand the needs and preferences of these consumers. It’s important to remember that people change, societies evolve, and cultures shift. Brands that stay attuned to national population trends and behavioral pivots and make efforts to understand the cultural drivers influencing them are in the best position to engage this consumer market successfully.
Personalized marketing experiences are no longer a ‘nice to have’ but a necessity. Consumers today expect to receive messages relevant to their interests and needs, and marketers who fail to deliver such experiences will be left behind. One of the keys to creating personalized marketing experiences is the use of zero-party data. Zero-party data is data that consumers intentionally and proactively share with companies. This type of data is valuable because it provides insights into what consumers want. As third-party tracking tools retire, zero-party data is becoming one of the most sought-after permission-based tools for engaging consumers more effectively.
Zero-party data, however, is just one piece of the puzzle. Another key component of personalized marketing is the use of multicultural data. ThinkNow research shows that multicultural consumers have unique needs and preferences, and understanding these nuances is crucial for creating effective marketing campaigns. For example, diverse cultures may have different values, beliefs, and traditions that can influence their purchasing decisions. By understanding these differences, marketers can tailor their messaging to resonate more strongly with multicultural audiences.
Multicultural data can also help brands avoid cultural missteps that could damage their reputation. ThinkNow research has shown that multicultural consumers are more likely to engage with brands that prioritize diversity and inclusion in their marketing efforts and are willing to stop frequenting a store that does not. From campaign strategy to execution, multicultural data can help brands build a deeper connection with multicultural consumers by helping them market in-culture, avoiding common mistakes that could prove very costly.
To effectively use multicultural data, it's important to ensure that it is collected and analyzed ethically and responsibly. Brands must take care to avoid stereotypes and assumptions when analyzing multicultural data and should work to understand the nuances and complexities of diverse cultures. Additionally, brands should be transparent about their data collection practices and ensure that consumers know how their data is being used.
Using zero-party and multicultural data to personalize marketing experiences has become a business imperative. Multicultural consumers are a diverse and rapidly growing segment of the population, and brands that don't consider their needs and preferences risk alienating a significant portion of their potential customer base. Cookies are on their way out, so the demand for zero-party data will only increase.
By using these types of data in an ethical and responsible manner, brands can create more authentic and meaningful connections with their audiences and drive business success.
Diversity, equity, and inclusion have been at the forefront of public consciousness since 2020. While these tenants were commonly known in academia, awareness among the general public is relatively new. Many companies and brands, in particular, are now grappling with balancing consumer expectations for DEI and navigating their learning curve.
DEI doesn't exist in a silo, however. It's not a department or a destination – it's a journey that winds through every aspect of an organization. It takes the total commitment of executive leadership for DEI to permeate an organization's culture and show up in its practices, from hiring diverse talent to launching inclusive marketing campaigns. This is particularly pertinent for firms interested in multicultural marketing. Firms with little to no representation of diverse professionals will find it challenging to attract multicultural consumers, and these firms may also find it harder to attract qualified candidates. Like consumers, job seekers want to work for an organization that shares their values, especially Millennials and Gen Zers, who comprise a large percentage of today's talent pool.
In this episode of The New Mainstream podcast, Dominique Dickson, Diversity, Equity and Inclusion Manager at Heidrick & Struggles, explains why executive buy-in is crucial for building an inclusive workplace culture, attracting diverse candidates, and achieving better business outcomes.
About Our Guest:
Dominique Dickson is a Diversity, Equity and Inclusion Manager at renowned executive search and leadership consulting firm, Heidrick & Struggles. She began her career there in 2016 as a member of the Global CEO & Board practice that manages recruitment of the world's top leaders across a wide range of industries. Dominique was promoted to the internal DE&I function at the firm in 2021. Prior to joining Heidrick, she held various corporate operations, communications, executive support and project management positions in the legal, asset management and business consulting industries.
Keeping pace with culture can be challenging for brands. Consumer dynamics are evolving and becoming increasingly fluid, particularly around identity. Several factors influence how consumers see themselves and shape their attitudes, behaviors, preferences, and biases, including their heritage and culture. Through this lens, consumers make purchase decisions and establish brand affinities, requiring companies to develop a better understanding of the complexity of identity.
Multicultural consumers are often motivated by a desire to represent their culture in how they identify their race and ethnicity. In 2020, ThinkNow conducted a nationwide online survey among Hispanics, African Americans, and Asian Americans ages 18 to 64 to understand how they prefer to identify themselves among peers and in marketing and media. This year, we conducted a follow-up study in which we found that the needle hadn’t moved much, with a few exceptions.
Download the report here.
In 2020, we found that the terms “Hispanic” and “Latino/Latina” were preferred by the majority of U.S. Latinos across different scenarios, in particular, when they or others (i.e., media, companies) referred to this population as a whole. That consensus holds in 2022, with the majority of Hispanics preferring the term “Hispanic” when used in most contexts, followed by “Latino(a).”
There was a noticeable shift in sentiment when respondents were asked about naming preferences “when describing yourself in a professional setting (job, interview, etc.).” In 2020, 36% preferred Hispanic and 26% preferred Latino(a). In 2022, 43% of Hispanics preferred “Hispanic” (increase), and 20% preferred “Latino(a),” a six-point decrease.
Interestingly, there is a five-point decrease in the use of the term “Latino(a)” when respondents were asked naming preferences “to use when describing or naming all people of Spanish or Latin American heritage in the U.S.,” from 30% to 25%.
Consistent with data reported in 2020, the term “Latinx” continues to exist in the margins. However, 3 out of 5 Hispanic adults have heard of the term, but it has yet to achieve broad adoption except among younger generations.
Among African Americans, we saw naming preferences become more nuanced. In 2020, 49% of African Americans preferred media, companies, and brands to refer to them as “African American,” and 33% said “Black,” accounting for 82% of respondents. This year, only 37% of African Americans prefer that companies, brands, and the media use the term “African American,” followed by “Black” (23%) and “Black American” (22%). While the total percentage of respondents is the same here, we saw an additional preference emerge not accounted for in 2020. While commonly used, the term “people of color” is not preferred in most cases.
Among Asian Americans in 2020, when asked about naming preferences “for the media/companies/brands to use when describing/naming,” 8% of respondents stated “My Country of Origin + American.” But in 2022, 14% held that preference. Very few Asian Americans prefer to solely be called “American.”
Across the three cohorts, the term “American” was among the least favored naming preferences indicating a desire among multicultural consumers to connect with their heritage. The onus is on media, companies, and brands to research to uncover cultural drivers underpinning multicultural identity and how these factors affect consumption habits.
Download the report here.