$300 billion revenue opportunity by serving the Black consumer
“For decades, Black consumers have been regularly overlooked by companies that don’t see them as a priority demographic. Black consumers continue to be underserved in areas such as food, housing, healthcare, broadband, and banking” [McKinsey Aug'21 Report]
Despite being 13.4% of the US population, Black households accounted for just under 10% of the nation’s total spending on goods and services in 2019 of around $835B a year.
“There’s a big market to be unearthed if companies meet the real needs of Black consumers”
A big issue (and hence opportunity) is that Black consumers are significantly dissatisfied with their spend across almost all categories compared to other populations.
"Black consumers are more open to switching what and how they buy than other demographic groups. They are less likely than others to be satisfied with the current offerings available to them, and 25% more likely to change buying behavior. Yet even after they switch, Black consumers are less likely to be satisfied with a new product. Clearly, they are not being offered the products and services they need"
McKinsey estimates "Black consumers are willing to shift approx $260B—about 30% of current total spending—to companies that can better deliver what they need, and pay up to 1.2 X more for offerings better suited to their needs and preferences. This could unlock another estimated $25B to $40B in net new spending. Together, these add up to $300B in unmet demand."
Innovative companies have an opportunity to build their businesses by better meeting the needs of Black consumers by:
1- expanding local access to goods and services and
2- creating offerings that are better tailored to the needs and preferences of Black households.