African-American buying power to increase in near future

(NDG Wire) As the U.S. continues to be bogged down by the woes of the economy, it’s no wonder many businesses have a watchful eye on the buying power of consumers. But recent news from leading economists suggests that businesses should pay particular attention to African-American consumers.

Leading economists say African-American buying power is projected to increase from $913 billion in 2008 to $1.1 trillion by 2012. This projected increase is contributed primarily to population growth and the expansion of African-American owned businesses.

In today’s distressed economy, new and existing African-American businesses intent on growing their market base and bottom-line by capturing more of the African-American market share, are focusing on the trendsetting realities of the teen market.

The U.S. teen market (12- to 19-year-olds) is targeted by businesses because of their strong influence on household purchases. And African-American business owners are specifically focused on African-American teens and tweens because of their impact on mainstream culture – especially in fashion, sports and music. Industry experts estimate African-American teens spend an average of $96 dollars per month, 20% more per month than the average U.S. teen.

“There’s not a better trend forecaster than young people in the African-American community,” says Joni Odum, marketing manager at Firstline Manufacturing Corp, a Black-owned hair care products and accessories company in Houston. “Teens and tweens in the Black community reflect the latest buying trends in the marketplace, and Firstline is very aware of how grooming products are growing in importance for this community of consumers. We continually take the pulse of teen and tween buyers to ensure our accessories reflect their needs, wants and sense of style.”

When considering the increasing buying power of the African Americans, experts in the “African-American Market Profile, Drawing on Diversity for Successful Marketing” note that, when compared to all U.S. teens, African-American male and female teens spend more on items such as apparel and technology-related products per year. They also exert more influence on household purchases over a number of, including athletic shoes and hairstyling products; and tend to be more brand loyal to a variety of goods, including personal products, footwear and food.

African-American consumers make their buying choices within complex cultural, political and social contexts. So even though some consumers might be in a pinch with the struggling economy, most African-Americans have a hard time saying no to the goods and services that they have grown accustomed to buying.

Odum said, “Firstline is focused on creating brand loyalty to ensure we capture our share of African-American consumers’ increased buying power over the next few years. For example, we know that while African Americans make up about 14 percent of the U.S. population, they account for more than 30 percent of hair care spending. Our product lines, especially our Evolve line of accessories for African-American females, are designed to meet the needs of these consumers with high-quality hair brushes, combs, and satin sleep and styling accessories.”

With the economy is reeling and personal household budgets stretched tight, consumers are carefully considering how and when they spend their dollars. Many African-American consumers are aware of how much money is coming in, how they make buying decisions, and when spending their money is a clear necessity or a luxury item they can justify to themselves and their families.

“Today, consumers are so busy trying to make sure they keep or find a job in today’s troubling economy, that buying any good or service is a serious decision,” said Robert A. Bowser, president and CEO of Firstline Manufacturing. “That’s why it is even more important today that our products speak directly to the African-American consumers’ needs. Money is tight now, but it won’t be that way in the long term. We are focused on positioning Firstline for the projected increase in our community’s buying power by offering fashionable hairstyling aids that positively reflect our customers – today and tomorrow.”

Even though the economy is causing most consumers to tighten their purse strings, African Americans – especially African-American women – continue to make a significant investment in hair care services and products, including hair relaxers, hair extensions and hair care accessories.

Actor Chris Rock’s recent documentary “Good Hair” humorously educates viewers about the lengths African-American women and teens are willing to go to everyday to ensure their hairstyles enhance their self-image, increase their self-esteem and express their individual style preferences.

Fashion and trends are strong influencers of household purchases and a valuable tool for businesses. Marketing experts agree that one of the best ways to make the purchasing decision easy for buyers and to benefit from the Black community’s increased buying power in the coming years, is for businesses to market their services and products to African Americans’ sense of fashion, style and trend.

That means positioning products and services effectively now so that they appeal to buyers in the future. It also could mean deciding to change the product or service, advertising differently, or improving the customer guarantee to attract African Americans with increased buying power in the future.

Bowser said, “Firstline’s best marketing strategy is simple. We ensure we speak directly to our target customer in a way that shows we understand their wants, needs, problems and concerns. For example, our Evolve product line is designed to make African-American female consumers feel and look good and fashionable, while also protecting their healthy hair. By staying abreast of our customers’ needs and wants, we stay on top of the latest trends in the community and can create new items based on where the market needs are.”

Firstline is also committed to staying on the cutting edge to be well positioned to appeal to consumers when the economy turns around and African-American’s projected buying power kicks up a notch in the next two to three years.

The assumption is consumers will decide to exert their collective buying power with companies that make a concerted effort to appeal to fashion and trends in the African-American community; create brand loyalty by offering high-quality services and products; and present buyers with a really compelling item for them to buy.