Ethnic Hair, Beauty and Cosmetics Products in the U.S., 7th Edition

No market is an island -- but why do many marketers and retailers still consider the ethnic HBC aisle as separate from the rest of the store, sleepy and low-end? In reality, ethnic haircare, makeup, and skincare products are a vibrant $2.7 billion business that reflects the upscaling of the parent HBC market.



Photo: ethnicbeautycentral.com



In 2010, African-American, Asian, Hispanic, and other folks of color already account for over a third of U.S. population; as of 2013, their spending power will have surpassed $4.2 trillion. Marketers have thus ventured beyond the usual hair relaxers, the few darker tints of makeup and heavy moisturizers, to offer premium-to-high-end beauty and grooming regimens sold through pop-prestige outlets such as Sephora, as well as through TV home shopping networks HSN, QVC, and others. Organic formulations are driving ethnic HBC sales, too -- because Americans of color actually skew more green-minded than Whites.

Yet ethnic HBC’s sell-through in the prestige, natural grocery, and TV home shopping channels, is still small in relation to its fabulous potential. As for the effect of the struggling U.S. economy, this market achieved mid-single-digit increases during the global recession of 2008-2009, and is expected to return to double-digit progress as the recovery proceeds.

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Gay and Lesbian Consumers Gateway to Post-recession Business Success

The expanding gay and lesbian population is providing marketers the opportunity to pick up some post-recession business, a new market research study from Packaged Facts says. The study, titled The Gay and Lesbian Market in the U.S., shows that today's 15.7 million gay and lesbian consumers are more optimistic than other consumers about the overall direction of the country, future economic growth, the job market and their own personal financial condition. This basic sense of optimism prevailing among gay and lesbian consumers suggests that they are more willing than other consumers to spend on products and services in the wake of the most severe economic downturn in 70 years.

The report currently estimates the purchasing power of gay and lesbian consumers at $743 billion but is expecting this market to grow 23% to $900 billion as the population grows to 16.4 million in 2014.Retailers in major metropolitan areas, such as New York, will see much of this good fortune due to higher number of gays and lesbians living in the area. For example, New York currently ranks first among the top fifteen gay and lesbian metro areas and claims $52 billion of this cohort's disposable income.

Metropolitan or otherwise, marketers will be interested to know that when deciding whether to stick or switch from a product or service, gay and lesbian consumers are highly alert to the perceived gay-friendliness of companies. Survey data from the report shows 32% gay men and 25% of lesbians have switched products or service providers because they found a competing company that supports causes that benefit the LGBT community. Furthermore, nearly 60% in this cohort report being 'more likely' to purchase everyday household products and services from companies that market directly to gays and lesbians.

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