LGBT spending power in US estimated to be worth $917billion (€834billion), according to the latest, annual analysis by LGBT marketing firm Witeck Communications.
Witeck’s founder and President, Bob Witeck has been monitoring the spending power of the LGBT market in the US over the past two decades. The new figure
is drawn from 2015 statistics. It represents a rise from $884billion (€804billion) in 2014.
The number represents the buying power of the US LGBT community; the disposable personal income that LGBT people have after paying tax and government pension contributions.
‘There is no evidence that same-sex households or LGBT people are more affluent’
‘Buying power – also known as disposable personal income (DPI) – is not the same as wealth,’ said Witeck in a statement. ‘It is a practical tool for economists and marketers, in particular, to signal the increasingly visible contributions made to our economy by America’s diverse gay, lesbian, bisexual and/or transgender individuals and households.’
‘To understand this estimate, it’s important to underscore that there is no evidence that same-sex households or LGBT people are more affluent or, on average, earn more than others.
‘That is a stereotype, long debunked by economists and policy experts.’
Witeck puts the increasing spending power down to greater LGBT equality, but says that there remains a long way to go – with the lack of a federal non-discrimination law being the most obvious example.
He also said that market behaviors are being favorably shaped by millennials, which other research has indicated to be the most LGBT-inclusive generation yet. A recent study by Pew Research found that three-quarters of millennials supported same-sex marriage.
‘I call this the PFLAG effect – which helps explain the familiar and loyal experiences of younger non-LGBT people towards their LGBT friends, family members and co-workers,’ said Witeck.
‘Brands today recognize a growing proportion of younger consumers whose attitudes and buying behaviors are directly shaped by LGBT-friendly policies, campaigns and messages.’
Witeck’s analysis is backed up by the large number of brands who are now keen to promote their LGBT-friendly credentials. On the most recent Human Rights Foundation’s Corporate Equality Index, which ranks companies on their LGBT-friendly policies and procedures, a record 407 scored the top mark of 100.
Many Fortune1000 companies now routinely mark Pride month in the US each year, with household name brands such as American Airlines and Target producing rainbow-colored variations of their logos, and companies such as Converse and Adidas releasing Pride-edition products.
Witeck calculates his figure by using national aggregate disposable income data; a similar approach as the one adopted by the Selig Center for Economic Growth at the University of Georgia in its research into the buying power of Hispanic, Asian American and African American communities.
It’s based on 6-7% of the US population identifying as LGBT; 16 million-plus adults 18 years of age and older.
The 2015 figure represents a rise of $33billion on the 2014 figure ($884billion), which itself was up $54billion on the 2013 figure of $830billion.
Commenting on the slight slowdown in growth, Witeck told Gay Star Business, ‘This year’s projection mirrors the US economy’s pace, which is reflecting somewhat slower growth.
‘The best news, of course, is that with changing attitudes, business leaders today should welcome the warm halo that LGBT inclusion and messaging has for millennials and younger generations.’
‘It’s helped further the progress of our fight for equality by placing emphasis on the financial strength of the LGBT community’
The figure was welcomed by Matt Skallerud, of LGBT marketing group Pink Banana Media.
‘The research and findings are solid,’ he told Gay Star Business, saying that the annual figure, ‘helped further the progress of our fight for equality by placing emphasis on the financial strength of the LGBT community.’
Todd Evans, President and CEO of media planning agency Rivendell Media said, ‘The estimate follows excellent research and should be taken very seriously by companies looking to increase market share.
‘What is most interesting to me is that still, with all the research available now, very few national companies have yet to capitalize on it.
‘For instance, with LGBT media being so relatively inexpensive, I can’t think of one company in the last few years that has decided to own it – meaning to be in all of it and really get noticed.
‘The last company that really dominated LGBT media was the famous Absolut Vodka campaigns. While they still maintain a presence in LGBT media, those campaigns where they bought up every back cover in LGBT print must be the best return on their dollar ever. Absolut still ranks as the top vodka of choice in the LGBT market and those dominating campaigns were many years ago.’