Powerful and growing

Asian-Americans represent a powerful consumer base with $718 billion in buying power – expected to reach $1 trillion in just five years. And having increased in size by 51 percent since 2000, the group is experiencing the highest growth rate of any multicultural segment, slightly outpacing that of Hispanics.

Retailers cannot afford to keep Asian-Americans under their radar any longer. In addition to making up the fastest-growing multicultural segment, the population boasts a large number of affluent and educated people. In fact, the median income for Asian-American households was 28 percent higher than the for total U.S. households in 2012.

As Asian-Americans acculturate, they embrace traditions to help them stay connected to their culture and cuisine. Their basket sizes tend to be smaller than those of the average shopper, but they visit stores more frequently. One reason for their more-frequent shopping trips is they tend to purchase and consume fresh produce regularly.

Asian-Americans also tend to live in households with more members than Caucasian households. Therefore, they are more likely to frequent warehouse clubs.

To attract Asian-Americans, retailers need to offer items such as fresh produce, healthful choices and products for growing families. Offering products with significant value also is critical, as many Asian-American shoppers buy on \"deal.\"

Retailers also need to consider how to integrate technology into the in-store experience to appeal to Asian-American shoppers. The emergence and growth of tablet technology is revolutionizing the retail experience and providing new experiences for consumers. Consider integrating tablets into retail point-of-sale and loyalty-card systems to provide recipe ideas, cross-purchase suggestions and health and beauty tips.

Speaking of the in-store experience, Asian-Americans are less likely than their Caucasian counterparts to clip coupons and create a shopping list in preparation for their shopping trips. Once in the store, however, the purchase-decision process may be swayed by product assortment, signage and deals. In fact, almost one-third of Asian-American grocery dollars is spent on deals, versus one-quarter of non-Hispanic Caucasian dollars (32 percent vs. 26 percent). Studies have shown that when coupons are in-language or inserted in Asian newspapers, however, there is a much higher redemption rate.

But Asian-Americans dont seem to show as much interest in store brand products as members of other ethnic groups. We found that their rate of purchase for private label goods is 25 percent below that of Caucasians. In comparison, African-Americans post a rate that is 23 percent below that of Caucasians, and Hispanics post a rate that is only 9 percent below.

Market to win them over
To properly market store brand items to Asian-Americans, retailers need to understand that even though these consumers hail from many nations with their own distinct cultures, the community has developed shared values as a whole.

Still, it is difficult to neatly package these values for retailers to use when developing marketing strategies. Retailers could resonate with Asian-Americans through shared, culturally relevant themes such as family. They also will need to demonstrate a strong understanding of the dynamics and unique diversities within the Asian-American market to win these consumers over.

By cultivating a deeper understanding of Asian-Americans, retailers could tap into this attractive, expanding and – likely – financially rewarding opportunity. And by doing so, retailers also would have an opportunity to offset the growth decline in the Caucasian population.

Todd Hale is the senior vice president, consumer & shopper insights for Nielsen, New York. He can be reached at [email protected].