01 February 2023 10:44

ADVERTISING

WPP study reveals how brands can unlock £16.7 trillion spending power of Minority Ethnic consumers

WPP today publishes The Consumer Equality Equation, the most comprehensive study into the relationship between ethnicity, the consumer experience in the UK and potential business growth opportunities.

Supported by WPP’s Racial Equity Programme – which funds inclusion projects that advance racial justice across the world – the report reveals ways in which businesses can address what matters most to these consumer groups to both unlock commercial opportunities and create positive societal impact.

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).

Mark Read, CEO of WPP, said: “We know that brands who invest come out stronger in times of economic uncertainty. As people look to prioritise their expenditure and change their habits, businesses need to rethink any previous assumptions about Minority Ethnic spending. The consumer experience – good or bad – directly shapes and influences people’s daily lives, meaning business leaders play a pivotal role in helping to build a more equal and thriving society.”

Karen Blackett OBE, President of WPP in the UK, said: “Missed or seemingly small consumer opportunities all add up. Engaging just 1% of Minority Ethnic groups now will have an immediate effect for brands which multiplies over time to bring medium and long-term commercial growth. By taking time to understand the varied and nuanced consumer experiences of people from different ethnic groups, brands have the opportunity to make a positive and lasting impact both on society and their bottom line.”

The report features data from 8,300+ participants from six ethnic groups: Black (2,000+), East and South East Asian (700+), Middle Eastern (600+), Mixed Ethnicity (1,000+), South Asian (2,000+), and White (2,000+). The study was a two year-long collaboration between WPP, GroupM and Ogilvy Consulting with original research from Kantar, BAV and Choreograph. It explores in detail different aspects and categories that make up a person’s consumer experience: health, employment, finance, retail, clothing and fashion, beauty and personal care, food and beverage, luxury, and the high street.

Shelina Janmohamed, VP of Islamic Marketing at Ogilvy Consulting, and lead author of The Consumer Equality Equation, said: “We set out to ask a simple but infrequently asked question that is fundamental to future brand success: what does it mean to stand in the shoes of Minority Ethnic consumers? Our research has helped us create a transformative framework for our clients and their customers that addresses systemic consumer inequality and leads to business growth through holistic engagement. This relationship – ‘The Consumer Equality Equation’ – is an important and game-changing milestone in laying the groundwork for tangible change in everyone’s consumer experiences.”

The report’s insights include:

Brands have an important role to play in society and all consumers’ lives, irrespective of ethnicity:

82% of all respondents say that brands play an important role in shaping Britain’s culture.
80% of all respondents agree brands have a responsibility to reflect modern Britain.
70% of all respondents believe that the actions, products and services of brands can affect their wellbeing.
83% of all respondents believe brands should make more of an effort in understanding different ethnic groups.

People want their brands to step up and be part of the conversation:

77% of people from Minority Ethnic groups say that they actively choose to buy brands that have a strong social purpose and try to do good, compared to 56% of White respondents.
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.

Diversifying the consumer experience and leaning into the needs of some groups doesn’t mean alienating others:

Out-of-Home is a trusted broadcast medium across people from all Minority Ethnic groups due to its community-oriented and based nature which can achieve personalisation for different groups through strategic planning of both location and creative messaging.

Every Minority Ethnic group considers Fenty as the most ‘courageous’ brand, while White respondents also ranked it highly in second place.

Brands need to challenge any previous assumptions:

More than 5 in 6 people from Minority Ethnic groups purchase luxury goods compared to less than 4 in 6 of White respondents.
The business opportunity of consumers from Minority Ethnic groups within beauty and personal care is expected to rise to £10.5 billion annually by 2061.
28% of people from Minority Ethnic groups aged 18-54 say they were investing money to increase their wealth, compared to 17% of the same age group of White people.

Read 1414 times Last modified on Tuesday, 15 November 2022 02:02
Share this article

About author

Editor

Leave a comment

Make sure you enter the (*) required information where indicated. HTML code is not allowed.

Powered By MAXIMESS

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…