Friday, July 27, 2012

Online Expenditures in the Multicultural Marketplace

How much money do members of different cultural groups spend online in an average month? What percentage of their purchases does that represent? These are two of the questions addressed with culturally diverse consumers in the 2012 multicultural marketing study of the Center for Hispanic Marketing Communication of Florida State University in cooperation with Research Now.

Monthly expenditures online differ in a somewhat predictable and interesting way as can be seen in the chart below.

Asians in the US indicate they spend about $125 dollars making purchases online and this mean is statistically different from that of all other groups. There was not a statistically significant difference among Non Hispanic Whites, African Americans and Hispanics. The affluence of US Asians and their proclivity for online shopping may account for this difference. Still the amount of money of the three other cultural groups is substantive as well.

Interestingly, the proportion of purchases reported did not differ statistically among most groups as seen in the chart below, except that non Hispanic Whites reported a somewhat lower proportion of monthly online purchases than the other three groups..

The overall trends are notable because many marketers have not realized that once online consumers of all groups tend to spend about the same amount on online purchases. Thus, online marketing should be directed to each of these groups emphasizing the unique cultural relevance of the product or service.  Basically, once online there does not seem to be a dominant group to whom messages need to be directed.  In the average, all these consumers are spending similar amounts. Notably, Asians tend to stand out as online shoppers because of their affluence, and non Hispanic Whites by being somewhat less eager to purchase online. This latter finding is counterintuitive because the expectation has generally been that non Hispanic Whites would be more likely to be active online. Things are changing as we can see.

We also asked respondents to tell us about how many miles they would be willing to drive to make an ordinary purchase at a physical store. Below are the results.

As we can see Asians are least willing to drive/travel to make purchases in a physical store, while African Americans indicate they are willing to drive the longest distances. Hispanics and non Hispanic Whites are statistically intermediate in terms of the distances they are willing to drive. As shopping online becomes more prevalent, the convenience of not having to drive long distances to make a purchase is becoming prevalent among all cultural groups and more pronouncedly for Asians.

Are those less willing to drive more likely to find the tax advantage still available online more appealing?  I computed the correlations between the willingness to drive to make purchases and the data for the question “I purchase products online to save the money I would have to pay for State taxes.”  The correlation was -.032 or basically “zero,” meaning that lack of willingness to drive and the motivation to save State tax money are unrelated. People seem to make their purchases online because of convenience, regardless of cultural group. On a six point scale from zero to 5, respondents in this study gave an overall 3.62 to the statement “I shop online for the convenience of it” and there were no statistical differences among the cultural groups.

The moral of the story being told by these data is that online shopping takes an important part in our multicultural society and that marketers need to pay attention by vesting cultural attention in their emerging online clientele.

The data for this study was collected by Research Now of Dallas, Texas, thanks to the generous initiative of Ms. Melanie Courtright. Research Now contributed these data to the research efforts of the Center for Hispanic Marketing Communication at Florida State University. This online survey included the responses of 936 Asians, 458 African Americans, 833 Hispanics, and 456 non Hispanic Whites. This national sample had quotas for US region, age, and gender to increase representativeness.

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