Affluent, untapped and happy to spend
By Basil Katz
NEW YORK (Reuters) - When Michelle Obama wore a J. Crew outfit on the "Tonight Show" during the presidential campaign, online sales for the clothing retailer went through the roof.
J. Crew, known for a polished and relatively pricey look for young professionals, was happy for the boost from the wife of future President Barack Obama. But when it followed up with an advertising campaign it didn't capitalize on one key segment: affluent African Americans.
That is typical of many marketers and luxury goods companies, who ignore a market segment worth billions of dollars, according to Leonard Burnett and Andrea Hoffman, authors of a new book on the subject.
Although African Americans are less likely to be rich than U.S. Asians and Latinos, they have been disproportionately ignored, say the authors of "Black is the New Green: Marketing to Affluent African Americans" (Palgrave Macmillan, $35).
Part of the problem is that companies and marketers don't know how to market to black people and the residue of decades of racial tension is hard to erase.
Burnett, a marketing consultant based in the Harlem neighborhood of New York, said he routinely dispels bizarre preconceptions. Once he had to explain to a paint company that despite its impression that black people don't buy house paint, they too own houses and paint their walls.
"When you advertise, when you speak, when you promote, affluent African Americans will respond with their dollars," Burnett said. "They're the most loyal consumer, and they overspend."
While 32 percent of Asian households and 23 percent of non-Hispanic whites earn $100,000 or more, only 12 percent of 12 percent of Latinos and 10 percent of blacks are affluent, according to market research company Package Facts. Continued...