NEW YORK — Size matters — but it ought not be the primary consideration in fashion marketers’ decision to target Asian- Americans.
Currently, the apparel industry’s attempts to reach the 11.9 million Asian-Americans are minimal, in large part because the effort is considered too complex and costly to reach a scant 4.4 percent of the country’s total population. Too, the group comprises a population whose heritage is spread across 15 countries of origin, cultures and languages, making the task of targeting its members appear daunting, for a payback that at first blush seems small.
Lost in the mix, however, are Asian-Americans’ high median income and education levels; younger-than-average age; sophisticated style sensibilities, and hearty appetite for fashion — and this despite the group’s highly visible influence on pop culture, from the rage for yoga to feng shui, the martial arts and Bollywood.
From such a diverse cultural crucible, Asian-Americans have emerged as the country’s consumers with the fastest-growing purchasing power, an economic force that surged 125 percent to $254 billion in 2001, from $118 billion back in 1990, according to the Selig Center for Economic Growth. The Asian-American population itself grew 48 percent during that span, or four times the rate of all Americans, the Census Bureau found. Americans overall saw their buying power climb 70 percent during that 12-year stretch, to reach $7.1 trillion, up from $4.2 trillion.
Moreover, Asian-American spending power is projected by the Selig Center to increase more than fourfold over its 1990 levels, to hit $526 billion by 2008. That level of buying clout would surpass the $452 billion spent by the country’s 39 million Hispanics in 2001, for instance. (Hispanics’ purchasing ran up 118 percent between 1990 and 2001.)
“It’s not as daunting to reach Asian-Americans as a marketer would think,” insisted Greg Chew, founding creative director at San Francisco-based Dae Advertising, the ninth largest Asian-American ad agency, with estimated billings of $1.6 billion in 2002. “Some of the big research companies, like Nielsen and Arbitron, still aren’t convinced it’s a group worth targeting, on a cost-benefit basis,” continued Chew, whose clients include Wells Fargo, Albertsons and Southwest Airlines. “This makes it hard to attract the major fashion brands, or the Procter & Gambles of the world.”At stake is a chance to connect with Asian-Americans who:
Have median household income of $55,026 annually, versus $42,873 for Americans overall, based on Census data.
Have higher-than-average levels of education: 44 percent have at least a bachelor’s degree, compared with 25 percent of the broader population.
Are younger than the country’s population on average, with 31.6 years the Asian-American’s average age against 35.3 years among the overall populace.
Are more willing to pay full price for apparel than are Hispanic and non-Hispanic white consumers, according to a Textile Consumer survey taken in the fourth quarter of 2002.
Although the statistical portrait seems alluring, marketing executives noted the general lack of awareness of such attributes, let alone Asian-Americans’ rapid population-growth rate. “Ten years ago the urban market was isolated in urban communities,” said Marshal Cohen, chief industry analyst at Port Washington, N.Y.-based NPD Group. “The same thing is true today of the Asian-American market; it’s insulated.
“We’ll see this change in 10 years. By 2010, the Census numbers will spur action,” Cohen added, pointing out the similarity between the dynamic he anticipates and the manner in which Census figures between 1990 and 2000 galvanized marketers’ outreach to Hispanics. (The Asian-American population is expected to roughly double by 2050, totaling around 24 million.)
Clusters of companies in a handful of industries have already caught on, including automotive, telecommunications, banking, insurance, travel and food, said Michael Halberstam, president of Interviewing Services of America, a market researcher based in Van Nuys, Calif. Among the leaders, sources said, have been AT&T, Toyota, Washington Mutual and McDonald’s. For the most part, though, long-term efforts to interest corporate America in catering to Asian-Americans, Halberstam admitted, have been “enormously frustrating.”
“For the fashion world, it’s really a loss,” said Wanla Cheng, president of Asia Link Consulting Group, herself a Chinese-born Asian-American, raised in Japan. “Asians tend to be really fashion-conscious and beauty-conscious. You see an Asian model here or there in an ad, but the marketing is not being done in a targeted way.”In the 12 months ended this May, Asian-Americans spent approximately $709 million on apparel, up 4 percent from the $682 million spent a year earlier, NPD estimated. That marked the biggest spending increase on apparel made by any racial or ethnic group. The only other increase in that 12-month period was the 3.7 percent upswing in spending for apparel by Hispanics, to $6.6 billion. Overall, consumer purchasing of apparel slid 4.2 percent to $81 billion.
As a result of the dearth in targeted marketing, sources said, many Asian-Americans feel they are being overlooked by the business sector.
The most frequently cited exception among the fashion pack, by the dozen or so sources WWD contacted, was Macy’s San Francisco, a regular advertiser on the Bay Area’s KTSF, a TV channel that has broadcast in various Asian languages since 1966. “It’s surprising we haven’t had others, since nearly 20 percent of the Bay Area is Asian- American,” acknowledged KTSF general manager Michael Sherman, a 20-year veteran of the station.
During the first quarter of 2004, KTSF will premiere a 30-minute, weekly, English-language program called “Stir,” reporting on what’s hot among young Asian-Americans, via correspondents in New York, Los Angeles, Seattle and Hawaii. Fashion will be one of the regularly featured topics along with music, technology and automobiles. “The mainstream media haven’t touched on where Asian-American ad imagery needs to be,” asserted Jeannie Mai, fashion editor and an on-air host of “Stir,” who is a former beauty consultant at MAC. “It still tends to be extreme: either the dominating sex object or the submissive lotus blossom. Marketers need to show Asian-American women as empowered people who know what they want from life, including fashion.”
The relative few fashion players known for using Asian-American models in their ads include Ellen Tracy, Kenneth Cole, Prada, J. Jill and J.C. Penney, noted John McKay, president of Tulsa, Okla.-based marketing consultant Multicultural Connection. Other efforts include those of Sears, which has targeted Asian-Americans in trading areas where the group is strongly represented, and Kmart, which has reached out with a specialized magalog.
Beyond the small size of the Asian-American population, the group’s cultural and linguistic diversity is a big hurdle that remains to be cleared. But a big strategic lift could come via marketing agencies’ ongoing efforts to educate brands in the ways Asian-Americans can, in fact, be targeted efficiently.For one thing, there’s a cultural concentration to be capitalized upon: Six sub-segments account for 87 percent of the country’s Asian population — Chinese, 23 percent; Filipinos, 18 percent; Indians, 16 percent; Vietnamese, 11 percent; Koreans, 11 percent, and Japanese, 8 percent.
“We encourage advertisers to prioritize, to aim at one, two or three sub-segments, like Chinese or Filipinos,” Chew said. “We emphasize Asians’ greater inclination to spend on luxury items, electronics, telecommunications. Marketers’ awareness is slowly building, and in the next few years I expect more hotels, airlines, fast-food chains and retailers to start targeting the group.”
In addition, the strong geographic concentration of Asian- Americans means marketers can leverage the cost-efficiency of mining local media and grassroots events. “It’s not always about mass marketing and mass communication,” declared Bill D’Arienzo, chief executive officer of WDA Marketing Solutions, a Princeton, N.J.-based fashion consultant. “More and more, it’s niche markets that are going to make the difference in the fashion community.”
Six states are home to 79 percent of the group, with 4 million Asian-Americans residing in California; 1 million in New York; 600,000 in Texas; 500,000 in New Jersey, and 500,000 in Hawaii. Those half-dozen markets will account for a projected $214 billion in spending this year, the Selig Center has estimated. Emerging Asian-American markets include Boston, Atlanta, Houston, Dallas and Washington, D.C.
Plus, Asian-Americans under age 40 are largely English speaking, observers noted, and the so-called 1.5 generation — Asian-born Americans who emigrated to the U.S. under the age of 18 — form an English-speaking group within the foreign-born contingent. Of course, under-40 consumers remain those most highly sought after by most fashion brands. “Younger Asian-Americans behave more like mainstream Americans,” observed NPD’s Cohen. “So, fashion brands ought to aim at youths. The older generations tend to retain more of their Asian culture.”
Such approaches could help marketers surmount challenges posed by the three-quarters of Asian-Americans who are foreign born, most of whom are said to prefer communications in their native language.
“It’s not as tough as people think and the potential is enormous,” ISA’s Halberstam assured. “As the number of second-, third- and fourth-generation Asian-Americans starts to grow, they will still retain certain cultural nuances — and understanding them now will make it easier for marketers than catching up later.”
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