University of Houston study examines increased purchasing power of Latino millennials

The University of Houston (UH) released a market study in December that showed the increasing purchasing power of Latino millennials, a crucial element for the consumer segment that demands attention from retailers and creators.

Olivia Johnson, an assistant professor in the Department of Human Development and Consumer Sciences of UH's College of Technology, led the study. Johnson collaborated with Hyojung Cho, a lecturer in the School of Family and Consumer Sciences at Texas State University, as well as UH post-doctoral researcher Sarif Patwary. 

The study involved 378 participants and delved into the distinct shopping preferences and behaviors exhibited by the subgroup. Johnson's research was published in the Journal of Consumer Behavior and showed the overlooked potential of Latino consumers and their importance in the target market. 

U.S. Latinos have the second largest population in the nation, and have a buying power of about $1.72 trillion. Millennials currently have more money to spend than ever, and Latino millennials make up 22% of the total population of U.S. Latinos, the study noted.

“Brands are always looking for new target markets. I think they overlook Latino consumers, and more research there is needed,” Johnson said.

She argues that more research is needed, however, to better understand this particular consumer segment.  

The study focused specifically on Latino millennial online shoppers and put them into three age groups: younger millennials ages 18 to 23; medium millennials 24 to 30; and older millennials 31 to 37. 

An extensive survey looked into the nuanced preferences and views on quality by each age group. A key finding was the considerable variation among the groups. Younger millennials showed a strong inclination toward well-known name brands and high-fashion logos and were more impulsive. 

However, distinctions stemming from different U.S. Latino cultures influenced shopping choices and product preferences. The level of biculturalism, comparing acculturation with dominant U.S. cultures to identification with the lifestyles of their family homeland, was another main element.

Johnson suggests that businesses go beyond offering identical products and focus, instead, on providing additional value to succeed in the competitive market. This includes incorporating social proofing elements, such as customer reviews, social media influencer endorsements, celebrity partnerships or loyal programs to sway potential buyers. 

She added that it is important to treat customers like people, acknowledging their preferences and offer tailored recommendations.

The study also found points of cohesiveness among the Latino millennials. As Latino millennials age, they become more brand conscious, which contrasts the trend found with white consumers. 

Johnson expressed enthusiasm for further studying of consumer differences and helping retailers gain a deeper understanding of the motivating elements for potential customers.