Moreover, also according to the same projections, what starts with our younger population is a trend that will continue over the next two decades, age group by age group, culminating at some point between 2040 and 2050, when the entire nation will become a so-called minority-majority country.
Not surprisingly, driven by this significant demographic transformation, we have also been witnessing a backlash to the idea of a multicultural America with probably its most visible face being the attacks on the value immigrants bring to this country. This couldn’t be more ironic, given the fact that this country was shaped by immigration, whose values of resilience, hard work, perseverance, optimism, and the search for a better life to their families, permeates the fabric of our society for many centuries to come.
Today In: Leadership
In my experience as a business leader and multicultural marketing expert, I am frequently asked how corporations should navigate the balance between catering to the new demographic changes in the marketplace while avoiding getting caught up in the heated political debate and the divisiveness we are experiencing in our society. My answer is that as business leaders, while we must pay attention to what’s happening in the short term, it is imperative that we look and plan for the next five, ten, twenty years and that the demographic changes we are experiencing today won’t change in the next two decades, no matter which political party is in power.
The demographic forces shaping the changes we are facing today are less driven by immigration policies, as they are more impacted by the organic population growth, mostly from Latinos and Asian-Americans residents. While we expect that the population growth rate from minority groups to slow down over the next few decades, their growth rate it will still be significantly higher than the white Caucasian population growth rate, which may even be facing negative population growth, following a pattern seen in some countries in Western Europe and in Japan.
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In my opinion, not recognizing the transformational power of these demographic changes in almost every aspect of our society and, most importantly, the impact they will have on business is what I call “Multicultural Myopia,” to paraphrase an expression coined by Professor Theodore Levitt’s work to explain a short-sided approach to marketing that doesn’t focus on consumers.
Research has shown that multicultural consumers have demonstrated slightly different behaviors, preferences and attitudes towards brands and services in a vast array of industries, including consumer goods, healthcare and financial services, to name a few. These behaviors may offer opportunities for different products and services, changes in packaging, sales channels, customer services, distribution, pricing, to name a few.
Moreover, significant studies conducted by industry leaders like Nielsen, Kantar, Simmons have all confirmed that the new generation of multicultural consumers does not adhere to the old assumption of “natural assimilation,” fully adopting a monolithic Anglo culture as seen by many early 20th century immigrants. As a matter of fact, we are seeing signs of the opposite trend: not only younger, U.S.-born, multicultural consumers seek to retain important aspects of their cultural heritage like language and culture, but are also exerting a significant influence power into shaping America’s mainstream culture. This can be seen in their choices of food, music, fashion and sports, for instance. The number one music genre watched on YouTube? Latino Music.
Why is this discussion meaningful? Similar to changes in our business environment driven by technological advances, the changes we are witnessing – and will continue to observe at a faster rate in the years to come – will create a fertile environment for growth, innovation and, most importantly, changes in the current competitive positioning of several corporations and brands in America. In short, leading corporations and brands may see significant shifts in their market share positioning, and sales growth trajectory. These movements will be tracked closely by Wall Street, and analysts will start to assess a brand’s value based on their ability to navigate these new demographic changes.
How to prepare for this new multicultural marketplace? Leading companies have been successful by following a few useful strategies: getting alignment at the senior leadership level on a plan that addresses the opportunity; investing consistently over the years versus approaching the opportunity as a tactical short-term project, recognizing the need for a holistic approach that includes investing in consumers; having community engagement; and building a strong recruitment, retention and advancement program for minority employees and suppliers.
As a friend of mine, the author and business expert Rishad Tobaccowala, recently stated when discussing the topic of America’s demographic changes, “If you don’t like change, you may not like irrelevancy either.” The stakes are high, and this is the time for corporate America, and the time has come to consider multicultural marketing as a growth strategy has come. Victors will reap the benefits of a young, loyal and vibrant set of new consumers; the markets will penalize the losers. This is a long-overdue conversation that board of directors and C-suites across our country should have. Who’s taking the lead on the race for market leadership in the decades to come?