WPP has published ‘The Consumer Equality Equation’, a study into the relationship between ethnicity, the consumer experience in the UK and potential business growth opportunities.
According to the agency group, the number of people from minority ethnic groups will double to a third of the UK adult population by 2061, with their estimated annual disposable income rising to £575 billion pounds, more than double what it is today.
Brands will reportedly miss out on a cumulative disposable income of £727 billion in the next 12 months alone, £3.06 trillion by 2031 and £16.7 trillion by 2061, if companies do not invest in ways to connect ‘meaningfully’ with these consumers.
“Despite their collective spending power, the limited amount of data and insight previously available for brands into these consumer groups has resulted in unequal consumer experiences,” WPP added.
WPP claims that in light of the cost of living crisis brands who better understand the diverse needs of their consumers will be able to engage new customers, differentiate themselves and their services, and ‘futureproof’ their business.
According to the ‘big six’ group, encouraging 1% of people from minority ethnic groups to change their spending habits across seven sectors, could allow brands to tap into a £2.34 billion short-term growth opportunity by 2023, £12.3 billion over the next decade (to 2031), and a potential £107 billion over a lifetime (to 2061).
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“As people look to prioritise their expenditure and change their habits, businesses need to rethink any previous assumptions about Minority Ethnic spending,” WPP CEO Mark Read said.
“The consumer experience – good or bad – directly shapes and influences people’s daily lives, meaning business leaders play a pivotal role in helping to build a more equal and thriving society.”
The study was supported by WPP’s Racial Equity Programme – which funds inclusion projects that intend to advance racial justice across the world.
WPP UK president, Karen Blackett OBE, added: “Missed or seemingly small consumer opportunities all add up. By taking time to understand the varied and nuanced consumer experiences of people from different ethnic groups, brands have the opportunity to make a positive and lasting impact both on society and their bottom line.”
The report, which was a two year long collaboration between WPP, GroupM and Ogilvy Consulting, features data from over 8,300 participants from six ethnic groups.
Ogilvy Consulting vice president of islamic marketing, Shelina Janmohamed, concluded: “Our research has helped us create a transformative framework for our clients and their customers that addresses systemic consumer inequality and leads to business growth through holistic engagement. This relationship – ‘The Consumer Equality Equation’ – is an important and game-changing milestone in laying the groundwork for tangible change in everyone’s consumer experiences.”
