• by Richard Whitman , Columnist, November 16, 2022

WPP is out with a new study this week that examines the relationship between ethnicity, the consumer experience and potential business growth opportunities for brands.

The report specifically examines this relationship in the UK, although such work would be just as relevant in the U.S. or any number of countries with growing minority ethnic groups. While the methodology could be applied to similar research in other countries no plans are in place to do that, yet.

The report, titled The Consumer Equality Equation, found that people from minority ethnic groups will account for almost a third of the UK adult population and have a projected cumulative disposable income of 16.7 trillion GBP ($19.9 trillion), or 575 billion GPB ($685 billion) annually, by 2061.

The bottom line: Brands will miss out on spending by those growing minority groups unless they invest in ways to connect with those consumers more meaningfully.

And the report finds that UK brands could generate billions in additional sales over the next year by engaging just 1% of people from minority ethnic groups to change their spending habits across a handful of sectors.

Supporting research found that 77% of people from minority ethnic groups say that they actively choose to buy brands that have a strong social purpose and try to do good, compared to 56% of White respondents.

And 73% of respondents from Black and mixed ethnic groups believe that “brands should be in conversations about climate change and sustainability” compared to 63% of White respondents.

More than 5 in 6 people from minority ethnic groups purchase luxury goods compared to less than 4 in 6 of White respondents.

Also, per the report, the business opportunity of consumers from minority ethnic groups within beauty and personal care is expected to rise to £10.5 billion annually by 2061.

And 28% of people from Minority Ethnic groups aged 18-54 say they were investing money to increase their wealth, compared to 17% of the same age group of White people.

The report found that consumers from minority ethnic groups tend to have a more negative in-store experience, including a lack of relevant product ranges and experiencing worse customer service.

“Identity is complicated,” the report concludes. “And that’s okay. In fact, it’s exactly the way people from minority ethnic groups feel about all the many parts of who they are. What came through loud and clear in the research is that they appreciate consumer experiences that reflect that complexity.”

The report, which can be accessed here, was funded by WPP’s racial equity program, a multimillion-dollar effort that was developed in 2020. It lays out a detailed framework to help businesses move toward what it calls “greater consumer equality.”