Marketers have been talking about the growing clout of the Latino market for decades, yet it’s still one of the least understood demographics. If American Latinos were a country, they’d have a gross domestic product of $3.2 trillion, up from $2.8 trillion last year. That makes them the fifth largest economy in the world, behind the U.S., China, Germany and Japan. Ana Valdez, president and chief executive officer of the Latino Donor Collaborative, tells Retail Insider more about the new realities of this fast-changing segment.
Retail Insider: The LDC has just published its annual analysis, and so many details are staggering, especially the speed of change. Few people understand this is the third-fastest growing economy, rivaling China’s growth rates. And Latinos make up 78% of the workforce growth. What’s the biggest misconception?
Ana Valdez: We continue to see the media portraying Latinos as if they're jumping over the border, that they are underserved and suffering. And it is true that 15% live in poverty. But nobody talks much about the 85% reflected in this report who are not poor.
Retail Insider: What are some of the most notable ways they prosper?
Valdez: When you look at income growth, educational attainment or entrepreneurship, they do better than other cohorts. Take home buying. Latinos account for more than 55% of all the new homes bought, yet we're only 19% of the population.
Retail Insider: Was there anything in this year’s data that surprised you?
Valdez: Yes. We keep saying that Latinos are very young and that we haven’t even begun to see how that will impact the workforce in the future. But this year’s numbers surprised me: The most common age group among Latinos is 10 to 14, compared to 58 among non-Latino Anglo-Americans.
Retail Insider: In the overall U.S. population, the birth rate is the lowest in decades. And young mothers have been hit especially hard, with hundreds of thousands leaving the workplace since the pandemic. Tell us what life is like for young Latina moms.
Valdez: Latinos give a great deal of importance to family and kids' education. Latino immigrants (and I am one of them), focus 100% on the opportunity for education in this country. And so when you had COVID bringing kids home, that felt like a big tragedy. Many mothers stay home and aren’t returning to work because they are finding new ways to help kids in their education. They’re also founding new businesses much faster than other groups to make up some of that income while prioritizing their kids. And they’re apprehensive about their children’s mental health.
Retail Insider: Which risks, particularly?
Valdez: We recently did some research with the Society of Latino Engineers and found that 17% of engineering students are Latino, which is good. That’s up from 4% in 2010. What’s not good is that at least 60% of them say they had one or various mental health issues as they got through college. Many are first-generation, so they don’t have as many resources or role models. They don't see themselves reflected in the media.
Retail Insider: What do most national brands get wrong about the Latino market?
Valdez: Latinos are careful to buy from brands that represent them well and are aware of brands that don't. Target is the best example. Target has flourished, not just because of its messaging but even with product development. Other companies think they can use some “diverse” effort, and Latinos will come.
Media is a good example. Even though we are just 20% of the population, we consume 25% of the box office. And it’s easy for movie marketers to think, "We don’t need to cater to them—they are coming to us anyway." But now, the box office is shrinking because Latinos and other non-represented groups are going to places like TikTok and YouTube. Broadcast and cable used to be a big thing, and now those platforms are also shrinking.
Retail Insider: What about the messaging and programming aimed at Latino and Hispanic audiences?
Valdez: Authenticity is so important. To get to that, you need to have Latinos making decisions at every level. Latinos are very sensitive to their culture.
Retail Insider: As we head into the general election next year, the Latino vote is already getting a lot of consideration. Any predictions?
Valdez: Latino youth is integrating into the voting bloc. And they are different. Older Latinos, we were raised to lower our heads, work hard and be humble and grateful. Our kids are much more outspoken. They were born here, and for 90%, English is their first language. They know their power.
Both parties will have to be very careful because they are underestimating the power of Latinos. We saw a lot of switching in the last presidential election. Look at what happened in Georgia, Arizona, New Mexico, Colorado, Washington and Nevada. And Voto Latino is registering millions of new voters. They will have a significant impact. Latinos will be the biggest surprise in this election, and I think people are energized.