The Beauty Retailer's Guide to the Growing Hispanic Market

With a population positioned to comprise one-third of nation by 2060, Hispanic beauty consumers are more important than ever to beauty retailing.
Hispanic Market

The Hispanic population is the fastest-growing group in the United States, accounting for 56.6 million of the U.S. population, as of 2015. Hispanics are projected to comprise nearly one-third of the nation’s population by 2060, as researched by the United States Census Bureau. When it comes to buying power, the Hispanic market is a notable force. According to consumer-insights agency Nielsen, U.S.-based Hispanics commanded $1.3 trillion in buying power in 2015 and are expected to reach $1.7 trillion by 2020. As a recent Nielsen article entitled, “Hispanics Transforming the Consumer Landscape,” put it, “If U.S. Hispanics were their own country, they would have the 14th largest economy in the world.” For the beauty industry, this means that Hispanic consumer beauty trends and buying influences should be an integral part of any retailing strategy. After all, Hispanic consumers spent $27.7 billion on beauty products in 2014, according to Liz Sanderson, vice president of strategy and insights for Univision Communications, which specializes in the Hispanic market. Sanderson adds that a 34-percent growth in this spend is expected over the next five years, versus 17 percent for non-Hispanics.

Hispanic-American consumers are a diverse group, representing numerous Spanish-speaking countries, ranging from Puerto Rico and Cuba to Guatemala, Mexico, Argentina and more. As a result, one of the first things a beauty retailer must do to serve this burgeoning group is to offer beauty products that appeal to the culture of the distinct countries of origin and ancestry of its particular Hispanic beauty customers.

Eddie Jhin, president of Jinny Beauty Supply, recommends that retailers offer the “best mix possible” to support the diversity within the Hispanic population. “It is necessary [that you] identify the Hispanic consumers that shop in [your store],” says Jhin. “Hispanics differ. They come from different countries, cultures and traditions. They are constantly looking for products—either those that come from their country of origin or products that are made here in the United States, but [that] are understandable for them, suit their needs, can be related to and/or have brand recognition.”

Although diverse, experts have found some commonalities among Hispanic consumers when it comes to beauty product preferences. One commonality experts agree on is the strong tradition of beauty that exists within Hispanic culture. Beauty is a major part of the Hispanic cultural experience—a factor that is underscored by the continued growth in beauty sales among American Hispanics, even as it faltered among non-Hispanics, in recent years, according to the Nielsen article: “Hispanic Consumers Are the Foundation for Beauty Category Sales.”

“Hispanics have a strong culture of beauty. Personal appearance is essential for Latinos, both women and men. In fact, seven of Hispanics’ Top 10 non-edible categories come from cosmetics, health, beauty departments, fragrances, hair care and men’s toiletries,” says Monica Gil, senior vice president of multicultural growth and strategy at Nielsen. “For many consumers, beauty products are considered discretionary expenditures. While sales have declined overall across several categories in recent years, on the contrary, these same categories grew within Hispanic households (cosmetics, hair care, personal-care appliances and shaving needs).” Gil adds that “across total beauty care, Hispanics spend on average 34 percent more than the general population.” That’s a number that beauty retailers can’t afford to ignore.

“Across total beauty care, Hispanics spend on average 34 percent more than the general population.”

—Monica Gil, Nielsen

Hispanic consumers may spend $46 versus $30 (non-Hispanics) on cosmetics, $44 versus $31 (non-Hispanics) on skin care and $47 versus $29 (non-Hispanics) on hair care each month, says Sanderson. She adds that Univision’s research shows that Hispanics have more positive emotions attached to their buying experiences than non-Hispanics. “When asked about how they feel about shopping, Hispanics are more likely to say they feel confident, happy, excited and pampered—all positive emotions,” explains Sanderson. “Whereas non-Hispanics report feeling frustration, boredom and confusion. This may be one of the reasons why Hispanics shop almost twice as much per month for beauty products compared to non-Hispanics (14 times per months compared to 8 for non-Hispanics).” She adds that Hispanic consumers often shop at a leisurely pace and with no specific product in mind. “In fact, 72 percent say they always walk the beauty aisle, even if they don’t need anything.”

HIGH-DEMAND BEAUTY CATEGORIES
Research shows that hair care, skin care and cosmetics are the top beauty categories sought by Hispanic beauty shoppers. However, nail care and fragrance purchases are also popular. Demand for organic and natural products, as well as men’s grooming options, is also on the rise, giving retailers a variety of beauty categories with which to appeal to and meet the needs of their expanding consumer base.
Sanderson notes that within skin care, Univision has found that Hispanics use more specialized products, including face masks, body oils and scrubs, than their non-Hispanic counterparts. Furthermore, their contribution to total sales is particularly high in the categories of false eyelashes, permanent hair coloring, hair styling, lip liner and lipstick. She adds that these categories are growing faster among Hispanics. “Eighty-four percent of Hispanic women say they use cosmetics to enhance their features, while non-Hispanics are more likely to use products that aim to cover flaws (39 percent),” explains Sanderson. Experts concur that Hispanic beauty consumers gravitate to more visible cosmetics, such as lipstick, mascara, eyeliner and eyeshadow—essentially, products that provide color.

“Hispanics shop almost twice as much per month for beauty products compared to non-Hispanics (14 times per month compared to 8 for non-Hispanics).”

—Liz Sanderson, Univision Communications

At the other end of the spectrum, Hispanic beauty consumers show a strong preference for natural and organic products. Gil notes that this trend is especially prevalent among millennials, regardless of ethnicity. However, Fabian Lliguin, hairdresser and cofounder (with his wife Anna Ayers) of Rahua hair care and Amazon Beauty, which use Amazonian ingredients, sees natural and organic products as trending specifically within Hispanic culture. “One of the new things I’m seeing in [Hispanic] purchasing habits is that women are more interested in having natural products and organic products; and they want them to be effective. They are [seeing] a relationship between organic and natural ingredients, and their heritage. Essentially, [natural and organic products remind them of] what their mothers and grandmothers used to do—such as using chamomile and quinoa [creatively]. They find natural and organic products familiar; but they want performers as well.”

A notable trend within Hispanic beauty consumption is the men’s grooming category. As it turns out, Hispanic Men “outspend their non-Hispanic counterparts in many beauty categories,” notes Gil. This makes men’s grooming another category that retailers must be vigilant in as they seek to interest Hispanic beauty customers. In other beauty categories, Jhin has found that synthetic hair extensions are popular among Jinny Beauty Supply’s Hispanic beauty customers. And Naturally Curly’s content and marketing manager Devri Velázquez has observed that “a universally pleasant fragrance that the entire family can use matters.”

Looking forward, Gil says the Hispanic beauty consumer will also add to the growth in the baby and antiaging categories—something retailers ought to keep in mind. “In the short- and long-term, Latinos are a very promising consumer for the business,” says Gil.

THE RETAIL RESPONSE
Engaging Hispanic beauty customers on a cultural level is key to meeting their needs and interests as consumers. In the Google article “New Research Shows How to Connect With U.S. Hispanics Online,” food, family, holidays and tradition ranked highest in terms of Hispanic market appeal—suggesting the type of messaging and imagery that resonates with them. Experts agree that reaching Hispanic consumers through cultural connections far outweighs any marketing efforts using bilingual or Spanish language.

“Retailers can send signals Hispanic shoppers will pick up on very quickly,” says Sanderson.

“For example, if their lifestyle images have relatable talent, and approach beauty with a Hispanic sensibility, Hispanic shoppers will notice and think ‘this is a store for me.’ Once you have signaled that you are inviting the Hispanic consumer in, you must have the right assortment and the right experience to win their hearts. In the beauty space, Hispanics like to explore, feel, smell and try things on their skin. Retailers that allow for such exploration will win with Hispanics. Additionally, they need to have a range of colors for foundation, concealers and bronzers that will appeal; as well as colors that pop for lip and eyes.”

Luis Izquierdo, marketing and sales manager for TCN, a distributor of Hispanic beauty products, suggests that retailers partner with distributors and vendors that specialize in the Hispanic market and demographic. “Most of our customer base comprises first-generation Hispanics. They tend to consume imported brands (from Latin America) and U.S. brands that are specifically designed for the Hispanic population.

“In general, first-generation Hispanics tend to use nostalgic brands or brands they already knew or used in their countries. Some of those brands belong to international corporations; but they tend to prefer the Latin American version versus the American one,” continues Izquierdo. “U.S.-born Hispanics, generally, have been more exposed to other U.S. and international brands, and therefore are more inclined to use brands that are considered more mainstream and easier to access. Both generations look for a good value in price versus quality. But according to our experience, first-generation Hispanics are willing to spend a little more (for imported products) for a brand they knew before moving to the United States.”

“While a lot of these customers are already shopping in our stores, their full buying potential has not [yet] been reached.”

—Eddie Jhin, Jinny Beauty Supply

Speaking of price, it’s one of the chief influences in Hispanic beauty-buying decisions, as are accessibility and brand knowledge. Whatever the case, Gil concurs with Jhin that retailers must discover what motivates their particular shoppers’ product and brand choices. In her experience, predominantly Spanish-Speaking beauty consumers tend to spend more on hair coloring, hair growth and personal care while English-speaking Hispanics tend to spend more on hair spray and powders. Generationally, there are also differences. “Older generations place greater emphasis on skin care while younger Latinos are more easily influenced by celebrity endorsements,” explains Gil. “Younger Hispanics are more likely to buy in the moment than older Latinos. So, for marketers, it is important to understand that this is not a one-size-fits-all approach. Differences exist among Hispanic consumers, [including] by age, gender and preferred languages spoken at home.”

The current and projected population growth and collective buying power of Hispanic beauty consumers makes it a worthwhile endeavor for beauty retailers to stock their stores, accordingly. Jhin sums up the opportunity with the following: “What does this multicultural-market opportunity mean for our beauty stores? While a lot of these customers are already shopping in our stores, their full buying potential has not [yet] been reached. [Therefore], Jinny Beauty Supply is creating new sales by offering the assortment of products [Hispanic] customers are looking for.”

[Photo by Jon Feingersh/gettyimages.com]