African-American Purchasing Behavior Examined in Nielsen Report

The purchasing behavior of African-Americans has some distinct characteristics that retailers and marketers should identify and use to establish effective market position, according to a new report by the Nielsen Co., “The State of the African-American Consumer.”

The report notes that this population has a buying power of nearly $1 trillion.African-Americans shop more often than all other groups, but spend less money per trip and overall. This behavior reflects their propensity to make quicker/smaller purchases based on short-term needs, and less on deal availability or the desire to “stock up.” This shopping behavior partly explains why African-Americans are more likely to frequent convenience stores than non-African-American consumers.

According to Schaumburg, Ill.-based Nielsen, African-Americans made 165.7 shopping trips per household over the past year, compared with 153 trips for non-African-Americans. However, African-Americans’ average basket ring per household was $37 per trip, compared with $45 for non-African-American households. Overall, Aftrican-Americans spent $6,138 per household per year, versus. $6,883 for non-African-Americans.

When it comes to channel shopping frequency, African-Americans made 17.4 shopping trips per household to convenience stores, compared with 12.7 trips for non-African-Americans. African-Americans also shopped more frequently than non-African-Americans at dollar stores (20.7 shopping trips vs. 11.4) and drug stores (15.6 trips vs. 13.9).

African-Americans made fewer shopping trips per household than non-African-Americans at grocery stores, supercenters, mass merchandisers and warehouse clubs, according to the Nielsen research.

“A few major factors driving African-Americans’ retail traffic may be access to private transportation and lack of major retail development in some urban areas where a concentration of African-American communities reside,” the report notes.

The report goes on to identify a number of business opportunities, including:

• The number of African-American households earning $75,000 or more has grown by 63.9 percent in the past decade -- a rate greater than that of the overall population. This continued growth in affluence, social influence and household income will continue to impact the community’s economic power, especially with women.
• The percentage of African-Americans attending college or earning a degree has increased to 44 percent for men and 53 percent for women. Higher educational and professional success, along with a lower birth rate, is increasing both the age and affluence of the population, increasing the demand for aging, health care and financial management services.
• African-Americans are heavy users of electronic media, providing marketers with many opportunities to access them with advertising and images that are appealing and highlight their services.
• African-American women tend to be the primary decision-makers for most household buying decisions. Marketers should be employing advertising messages and images that appeal to them.
• Trends in technology adoption and social networking also provide this group with an influence over popular culture beyond the limits of ethnic categorization.

“The State of the African-American Consumer” is the first of three annual reports attempting to provide a fairly complete picture of the African-American consumer. Those interested can get a full copy of the report.