States across the country are slowly reopening parts of their economies as impacts of COVID-19 begin to wane in certain local communities. In those states, park systems, many retail businesses and even some close contact establishments like gyms are being allowed to reopen in an effort to revive local economies. While these efforts will certainly make it easier for consumers to buy goods and for retail and service workers to return to the workforce, it remains to be seen how consumers will interact with this slowly-opening economy, and initial results from a national survey from Latino Decisions suggests that Hispanic consumers will be among the most affected consumers with 76% of Hispanics expressing concern that they won’t be able to cover basic expenses in the months ahead. The Hispanic consumer, while usually active when it comes to spending both online and offline, will likely emerge from the COVID-19 era with different priorities, preferences and behaviors that will shape the immediate future of how brands market to Hispanic audiences across the country. And while we don’t yet have enough data to know definitively how the various segments of Hispanic consumers will react to re-opening economies, we can look to other factors that impact the Hispanic market’s belief system to gain initial insights into how they are likely to react to the post-COVID-19 economy.
Hispanics as a group are among the communities worst impacted by the pandemic.
Recent data from the Pew Research Center suggests that the Hispanic market has experienced job losses and pay cuts at rates higher than that of the general US workforce. While this impact is felt least by college-educated and older Hispanics, that leaves nearly 8 million Hispanics who comprise 21% of the workforce of high-risk industries like restaurants, hotels, and other services sectors. Brands should expect that as states reopen their economies, these high-risk industries will be among the last to return to some semblance of normalcy. As a result, we expect Hispanics in these sectors of the economy (mostly younger and/or less acculturated Hispanics) to suffer the negative economic impacts of the pandemic the longest, and spend less than the rest of the population on everyday items as their income is reduced.
Hispanics are early adopters of technology, especially when used as a means for building community.
According to data from Nielsen, Hispanics are early “adopters and adapters” to emerging trends in technology. And although the Hispanic consumer is generally value-conscious, “54%… agree they are willing to pay more for top-quality electronics.” And with interest in food and grocery delivery surging, it wouldn’t be unreasonable to expect that many Hispanics who have learned and adapted to new technologically-driven behaviors necessary during the pandemic will keep those new behaviors as life settles into a new normal.
Hispanics are generally more pessimistic about a recovery than the general market.
Whether because they are losing their jobs or hours at work, or because they have less in savings than their general market peers, Hispanics have a more pessimistic view of an economic recovery post-pandemic. It’s possible that even as the Hispanic workforce returns to their jobs they may emerge from this pandemic more cost-conscious, value-minded, and with a reshuffled list of priorities on which to spend any discretionary income they may have. Given that many Hispanics have still to see their income recover from the Great Recession, it is likely that many Hispanics will be much more cost-conscious as they re-enter an economy that is expected to languish in a recession through at least the first quarter of 2021.
- While younger, less educated Hispanics are most likely to feel longer term negative economic effects due to the pandemic, brands should still target them with smart, culturally appropriate messaging that speaks to their current economic situation without pandering. Use supportive language and help this Hispanic segment find value plays in your product offering that will help them weather the economic challenges they will be facing.
- Be prepared to have to defend your product’s place in the list of purchasing priorities post-pandemic. Emphasize benefits that are consistent with your target market’s values and align your product with those values.
- Find innovative ways to deliver your content, product, or service using technology and leverage the Hispanic consumer’s propensity to be an early adopter of technology to grow your market share.
- Cost-conscious Hispanic consumers should be reminded about the benefits your product brings over the competition. Don’t ignore tried-and-true value plays, but be careful not to devalue your product in the eyes of consumers. Soft-sell tactics still work with cost-conscious consumers, especially if your advertising is geared towards emphasizing the benefits your product brings that should overcome a cost barrier.
The Hispanic consumer, just like most consumers, will no-doubt emerge from the COVID-19 pandemic a changed person. New behaviors Hispanic consumers have learned during their time in quarantine will likely stick around and economic factors will likely drive many purchasing decisions in the short-to-mid term. For example, data from EY projects scenarios where “few consumers expect to go back to their old behaviors any time soon.” While purchasing may be somewhat tighter during this new economy, brands can still position themselves smartly to maintain and even grow market share during this time.
The Hispanic consumer remains a viable, attractive market to reach, even in the current pandemic we’re going through. As history teaches us, brands that continue to invest during tough times typically increase sales and market share. However, as the Hispanic consumer reprioritizes and cuts back on everyday spending, it is imperative for brands to get in front of their Hispanic consumer with culturally-relevant messaging throughout this pandemic. While the dollars will be limited, savvy marketers who enter or maintain their efforts with this market stand to reap the benefits both now and as we enter the post-pandemic economy.
As a matter of practicality, we believe now is the time to plan your strategy for this new reality. If you would like to talk about how we can help your brand thrive in this environment, give us a call.