How Are Wealthy Latinos Spending Their Money? The Spending Habits of Affluent Hispanics and Their Preference of Luxury Brands
Earning $100K+ annually, affluent Hispanic are growing in numbers and their economic worth is tipping the scales.
While only 12.2 percent of Hispanic earners are affluent, that fact has not stopped the small segment from quietly wielding that wealth and influencing both the non-Hispanic affluent market and non-affluent Hispanic spenders, contributing to overall spending and the uplifting of local and national economy.
The four categories where affluent Hispanic spenders are most influential are in the areas of family activities, vacations, brands and sporting events -- whether that means the Big 3 (NFL, MLB and the NBA), FIFA soccer and/or NASCAR.
With a household income of $100,000, affluent Latinos annually spend a bulk of their wealth on family activities that include anything from gambling to golfing. Also, they expend as much money as affluent non-Hispanics on wine, books, shopping and food. And affluent Hispanics, who are on average seven years younger than non-Hispanics in that income bracket, outspend their non-Hispanic counterparts, in time and money, where live music events and having gym memberships are concerned. At the same, non-Hispanics rated higher than Hispanics when it came to visiting museums and clipping coupons.
High on the priority list for affluent Hispanics is traveling. As a matter of fact, 23 percent of affluent Hispanics take five or more vacations each year, compared to nine percent for non-Hispanics. And when international travel is concerned, 44 percent of Hispanics travel abroad annually, which is nine percent more than non-Hispanics.
But, not only are Hispanics traveling more and traveling farther, but they're spending more on their vacations than non-Hispanics; spending 29.7 percent more on domestic travel and 25 percent more on international travel. That said, the increase in spending could be attributed to the fact that Hispanics tend to have larger families.
These larger-than-life affluent Hispanic families not only capitalize when it comes to dollars and activity, but also specific brands, which acts as a "psychographic measure." Hispanics are attracted to top-tier brands, seeing them as a sign of status. Wealthy Hispanics own luxury brands at a much higher rate than non-Hispanics, even to the point where they may take on the role of the "True Luxe shopper," who has the means to purchase luxury items at will without financial concern.
To connect to this smart and savvy segment, agencies are tasked to dig deep to understand Latinos' spending motivation. Are affluent Hispanics spending at such high levels because, unlike their parents, they are positioned to do so, even out-spending non-Hispanics? Or, do they spend money on vacations and sporting events to celebrate their culture and customs, and encourage family togetherness? Answering these questions means that you'll win the wealth of the segment.
Roughly 50 percent of luxury brands' top customers are lost annually because brands routinely misidentify clientele, misjudging demographic and economic profiles and failing to create a personalized sales experience for particular audiences, according to research and consulting firm The Luxury Institute.
Findings dictated that luxury brands have mistakenly identified their typical customer base to be a 45-year old female with a net worth of over $1 million.
However, research tells a different story, showing that 57.5 percent of luxury spenders are male, likely to be of Asian and Middle Eastern descent, and worth over $500,000. Nearly 14 percent of shoppers (13.8 percent) who have a net worth of over $1 million invest mostly in contemporary décor and gifts, rather than high-ticket apparel items. Also, affluent Hispanic shoppers who tend to over-index in technology and high-end items, also over-index in luxury brands. Therefore, some sound advice is to offer each potential customer respect and personalized experience.
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