LGBT Community Untapped Market Consumer Brands - Business ...

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Rick and Liam wanted recognition of their commitment to each other, so they did what many gay couples are doing these days.

They boarded a plane to New York where marriage between same-sex partners is legal. After hearing about the couple?s plans, the JetBlue crew on their flight showered them with special attention including free drinks and best wishes.

When Rick and Liam realized they lacked a witness for the wedding, one of the flight attendants accompanied the men to city hall to serve in that role, showing up at the nuptials only after stopping to get a special dessert for the occasion. The newly married men penned a heartfelt ?thank you? letter to JetBlue. The airline proudly posted the story on their blog and distributed it to the press.

JetBlue is not alone in its desire to shine a light on its support of its gay consumers. Many brands are waking up to the opportunity that the LGBT market today represents for their business.

Brands from Apple to Budweiser to JCPenney are becoming more interested in gay consumers, with many brands making concerted efforts to target the LGBT market. ?

Why? What is really at stake? Here are just a few numbers surrounding LGBT consumers and the differences in spending power of gay households vs. the American general market:

• 23% higher median household income¹

• 24% more equity in their homes¹

• 26% of gay men say they will pay more for top quality brands²

• 30% have taken a major vacation in the past year²

• 40% bought a new smart phone in the past year²

Estimates put the buying power of the LGBT community at over $800 billion annually. Some marketers are realizing that they may need to adjust their plans to accommodate this segment, or at least make sure that their marketing spending is inclusive of this valuable target. But many brands have been slow to pick up on the impact of the gay and lesbian consumer on their sales. Some are content to let their general market messages do the job of reaching everyone, and see no reason to pay special attention to LGBT consumers.

Are gay consumers? spending habits and brand loyalties really all that different? In some categories, maybe not. But in others, the impact of gay consumer spending is more profound. Here are a few differences between the purchasing habits of gay consumers and everyone else.

Gay Shopping Habits Pay Off For Brands ? Same-sex households spend at rates fairly similar to other households, when it comes to shopping for consumer packaged goods. However, gay and lesbian households make 16% more shopping trips than the average U.S. household ? 173 vs. 149 per year.3 The impact on total spending equates to about 25% more for same-sex households. Male same-sex households are especially likely to spend more frequently, shopping nearly 30% more often than the average household. On average, that?s $2,045 more per year spent on packaged goods in male same-sex households.3 This means that brands have more opportunities to reach LGBT consumers at retail to influence their purchase behaviors and brand preferences.

Gay Consumer Brand Loyalties ? Are the factors that influence the brand selection of gay consumers really that different? They are more likely to pay for quality brands and to influence others as well. When asked if it is worth paying extra for top-of-line or cutting edge products, 26% of gay men agreed, considerably higher than the average American?s answer to that question. And LGBT consumers are a source of word-of-mouth marketing for brands. Gay men (64%) and women (65%) agreed that when they find a brand they like, they are likely to make a point of telling their friends about it. That?s well above the average of all U.S. consumers.²

Gay Consumers and Finances ? Although there is some disagreement about income of gay consumers compared to the average American, most sources indicate LGBT consumers have more disposable income. According to a survey done by Prudential in 2012, gay consumers reported annual household incomes around $61,500, significantly higher than the national median of just over $50,000.1 Gays were more likely to have higher educations, to carry less debt, to have more savings and were less likely to be jobless with an unemployment rate of almost a point below the national percentage. Additionally, LGBT homeowners in the survey had significantly more equity in their homes and were better financially set for retirement.¹

But are gay consumers open to brand marketing messages tailored to them? With a constant media-driven debate reminding gay Americans of inequities including workplace discrimination, marriage inequality, and cultural clashes, on an almost daily basis, gays and lesbians are paying attention to brands that appear to be allies.

And even for brands that do not have any plan to market directly to LGBT consumers, the shift in America?s attitudes about the issue is requiring a new sensitivity. Brands from beer to candy bars have found themselves the subjects of consumer or industry criticism when they used ??harmless? jokes in ads that inadvertently seemed to show same-sex relationships in a bad light. And the concerns are not always coming from gay groups. More and more progressive general market consumers are expressing their support of gay issues and holding brands accountable as well.

With billions in spending at stake, it?s more important than ever that brands, even those who have no interest in marketing to gay Americans, become sensitive to these issues. This loyal group of consumers is ready to reward brands that really speak their language.

¹Prudential 2012 Survey of more than 1,000 LGBT respondents

²Community Marketing, Inc., July 2012 survey of 13,000 Gay & Lesbian Americans

³Nielsen, January 2013

Source: http://www.businessinsider.com/lgbt-community-untapped-market-consumer-brands-2013-6

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