Why you should target ethnic consumers and two ways to do it

29th November 2022

The Consumer Equality Equation explores the relationship between ethnicity, the consumer experience in the UK and potential business growth opportunities. This blog will discuss the report’s key findings, specifically why brands should be targeting people from groups of Ethnic Minorities and two ways brands can connect meaningfully with the Ethnic Consumer.

Why brands should be targeting people from groups of Ethnic Minorities? 

Demographics in the UK are changing: the number of people from Minority Ethnic groups will double to almost a third of the UK adult population by 2061, while their estimated annual disposable income will rise to £575 billion, more than double what it is today. Despite their collective spending power, the limited amount of data and insight previously available for brands into these consumer groups has resulted in unequal consumer experiences. 

Brands stand to miss out on a cumulative disposable income of up to £727 billion by the end of 2023, £3.06 trillion by 2031 and £16.7 trillion by 2061 unless they invest in ways to connect meaningfully with these consumers. 

Actions that brands can take now will generate loyalty that can last generations. Faced with a cost-of-living crisis and an increasingly crowded marketplace, brands who better understand the diverse needs of their consumers can engage new customers, differentiate themselves as people demand more from their products and services, and futureproof their business. By engaging just 1% of people from Minority Ethnic groups to change their spending habits across seven sectors, brands could tap into a £2.34bn short-term growth opportunity by 2023, £12.3bn over the next decade (to 2031), or a potential £107bn over a lifetime (to 2061).

Two ways to connect meaningfully with the Ethnic Consumer

#1 Play an essential part in society

The Consumer Equality Report reveals 73% of respondents from Black and Mixed Ethnic groups thought that “brands should be in conversations about climate change and sustainability” compared to 63% of White respondents. 

Sustainability and social good are important issues for all consumers, but especially for people from minority ethnic groups. The Consumer Equality Report asked respondents, ‘What can companies do to encourage you to shop with them?’. One-third of people from Minority Ethnic groups said they preferred to shop from brands that provide ethical and sustainable products. Furthermore, when it comes to brand involvement in active conversation about climate change and sustainability, 73% of Ethnic Minority consumers agreed that brands should have a social purpose and be involved in the conversation because it makes them more likely to shop with them, compared to 63% of White consumers.

To capitalise on this insight and create a meaningful connection with consumers from ethnic minority groups, brands could take the stance of having a social purpose, which might entail being involved in sustainable and climate change topics of conversation; this could range from actively discussing it on social media and through their community to incorporating social values into their business model. In addition, brands should potentially introduce a line of sustainable products or services or emphasise these products if they are already incorporated into their business as a strategy to target consumers from ethnic minority groups.

The clear imperative towards behaviour means that being comprehensive in a brand’s approach is the key. Taking an ‘inside out’ view—or walking the walk before doing the talking—makes the difference in driving positive brand sentiment.

#2 Challenge previous assumptions

The Consumer Equality Equation Report reveals more than 5 in 6 people from Minority Ethnic groups purchase luxury goods compared to less than 4 in 6 White respondents. 

Because it is widely assumed that White People are most interested in purchasing luxury goods in the United Kingdom, luxury brands target their marketing to White People. However, brands must reconsider their assumptions about luxury. Consumers from minority ethnic groups, particularly Middle East, Black, and South Asian, purchase luxury goods: more than 5 out of 6 report purchasing luxury goods (compared to less than 4 in 6 White consumers). According to Kantar’s Brand Z Most Valuable Global Brands 2022 Report, the business opportunity for consumers from Minority Ethnic groups in luxury beauty and personal care is expected to grow to £10.5 billion annually by 2061. And yet consumers from Minority Ethnic groups do not feel that luxury products are designed or marketed toward them?!

Considering the sizeable customer base and higher engagement of ethnic minority groups, it follows that if you represent a luxury brand, it is in your best interest to implement a marketing strategy that is geared toward these groups.

It’s time to stop overlooking the persuasive unequal consumer experience of people from Ethnic Minority groups and act to eradicate Consumer Equality eventually. Brands not only have a duty to understand the differing needs of the audiences they target but doing so also represents a significant untapped commercial opportunity.

If you fancy taking the first step in representing a significant untapped commercial opportunity, we can help you. GottaBe! Ethnic is a multicultural marketing agency which specialises in representing and targeting consumers from groups of Ethnic Minorities and can help your brand generate Consumer Equality and future-proof your business.

Let's see how we can work together