today in black history

August 20, 2017

In 1619 twenty Africans arrive in Jamestown, Virginia aboard a Dutch ship,forced into involuntary servitude.

Black Buying Power

POSTED: October 23, 2013, 9:00 am

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By most measures, African-Americans, native born and immigrants still lag their white counterparts in a number of indices and fare far worse on many social and health related indicators. With the Civil War only 150 years past, and the legal structure of Jim Crow struck down just five decades ago, Blacks are still playing catch-up. Despite some progress, most notably the attainment of college and graduate degrees and some penetration into the middle class, there still exists a number of obstacles that frustrate the achievement of racial parity. However, a recent Nielsen report suggests Blacks have an incredible tool in their arsenal that if used properly, could transform their current status.

The report - Resilient, Receptive and Relevant: The African-American Consumer - by the media measurement firm, and the National Newspaper Publishers Association (NNPA), the nation’s Black press, illustrate the incredible buying power of African-Americans. Much like latent political power that was unleashed in the aftermath of the Voting Rights Act of 1965, the economic power of Blacks sits unused in their wallets. The Nielsen/NNPA report pinpoints Black buying power at $1 trillion and cites data that projects it will increase to $1.3 trillion by 2017. If African-Americans were a nation they would rank in the top 20 in terms of economic power. The depth of Black consumer power is in stark contrast to the characterizations of African-Americans as economically deprived. While there still remain gross racial disparities in the labor market, and obvious income inequality based on race and class, the report does make clear that African-Americans are still purchasing goods and services, albeit without a clear strategy on how to make those purchases pay off in social dividends.

One of the most compelling findings of the report is the emergence of the south as a dominant region for Black consumer power and the dominant position of Black women consumers. With the reverse migration of African-Americans to southern states they abandoned during the Great Migration, ten markets in the South stand out as key power centers for Blacks. They are Jackson, Mississippi; Memphis, Tennessee; Columbia, South Carolina; Atlanta, Georgia; Baltimore, Maryland; Raleigh, North Carolina; Washington, DC; Miami/Ft. Lauderdale, Florida; and Houston and Dallas, Texas. The new Black migrants to these areas are young – 40% between ages 21 and 40 – and one in four newcomers hold a four year college degree. Each of these markets has a minimum Black population of 400,000 and half exceed over one million. The report notes that 55% of African-Americans now live in the South.

Black women are the economic drivers for the African-American community. They comprise 54% of the adult Black population and women-headed households represent 29% of all Black households compared to 20% for the overall population. A greater proportion of Black women than Black men have earned a Bachelor’s Degree or higher and this translates into 23% working full-time and earning incomes of $50,000 or higher. Women represent 52% of Blacks employed overall and own the majority of Black businesses. The data clearly paints Black women as a key target for advertisers and consumer product companies.

Just as striking in the findings of the Nielsen/NNPA study are the consumer preferences of African-American consumers. The research notes that Blacks use 18% of their annual retail dollars on store brands and spend nine times more than other groups on hair and beauty aids. Blacks also watch 37% more television than other groups but primarily view entertainment and sports related programming. Despite African-American’s TV viewing habits the report notes that of the $75 billion spent on media advertising, only $2.24 billion is spent on media focused on Black audiences; meaning Black radio, newspapers, TV and internet sites are not receiving a proportionate share of ad dollars. However, as African-Americans migrate to new media like other groups, they are using their time on social media for more serious pursuits. The report notes that Blacks spend 44% more time on education and career-oriented websites than the total consumer market.

These statistics suggest that if Black buying power is used in a more strategic manner it could yield more specialized product offerings and even better pricing if Black consumers target their purchasing. Given the degree to which business engages the political process, Black spending power could also influence the political decisions of corporations that support candidates and causes. As a steady and growing segment of the total consumer market, African-Americans can convert their spending into tangible benefits given the extent of their market footprint as depicted in the Nielsen/NNPA study.

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