Black Boom in the 'Burbs

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The May issue of Savoy magazine is filled with ads for upscale vehicles such as the Audi A6 and the Lincoln Navigator. The magazine features a column on estate planning and an article that explains how to find the best caterers and florists. But this is not yet another glossy lifestyle publication targeting the white and affluent.

Launched in February, the magazine targets well-heeled blacks, in contrast to such established magazines as Essence and Ebony, which target the urban middle class. By focusing specifically on black professionals who often reside in the suburbs, the magazine promises to offer its advertisers an opportunity to reach “an increasingly viable and largely under-served market.�

Executives at Savoy may be on to something. Census 2000 data reveals that the share of blacks who live in the suburbs jumped by 5 percentage points, to nearly 14 million people, between 1990 and 2000. That comes to 39 percent of all blacks. Meanwhile, the share of whites living in the suburbs increased by just 2 percentage points to 71 percent. And contrary to the theories of some academics, blacks who move out of the city are adopting more affluent suburban lifestyles. In fact, blacks who move to the tree-lined streets of suburbia tend to experience a steeper jump in income than people of other races do.

Why has the black population started to flee the city in the past decade? Because they can, says Ben Wattenberg, a senior fellow at the American Enterprise Institute in Washington, D.C. “You get a better job, you move to the suburbs,� he says. “Everybody wants a single-family home with a backyard.� As with all races, suburbanization follows increased black professional success, he adds.

More blacks can afford to move to the suburbs today because they are rapidly becoming more educated and affluent. The 2000 Current Population Survey counted the highest share of blacks with a college degree ever — 17 percent, up from 15 percent in just one year. Blacks also registered a record high median income. A 51 percent majority of African American households had incomes of $50,000 or more, up 4 percentage points in just one year.

Like whites, affluent blacks head off to the suburbs with their good fortunes. Today, 10 percent of suburban blacks have incomes of $100,000 or more, compared with less than 5 percent of blacks in the city.

But unlike whites and members of other ethnic groups, blacks who live in the suburbs are far wealthier than their city brethren. On average, black suburban households have a median income of more than $37,000 — 44 percent more than their city counterparts. In comparison, suburban non-Hispanic whites earn only 20 percent more than their city counterparts, and suburban Hispanics earn 28 percent more. According to Wattenberg, this is because blacks have the lowest incomes of any racial group in the central cities. For blacks, the jump to an income that can support a suburban lifestyle is greater than for people in other ethnic groups. This adds up to a growing market for companies with upscale products to sell.

Hennessy Cognac is one company that targets upscale black consumers. According to Hennessy's brand manager Sumindi Peiris, it's important to understand that many affluent blacks share certain psychographic characteristics. On one hand, they are aware of their ethnic identity and maintain an urban attitude that drives their buying decisions. But on the other hand, as they grow more affluent, their urban tastes are diluted by more mainstream white suburban tastes. “Marketing [to affluent blacks] requires an understanding of this nuance,� says Peiris. Roy Johnson of Savoy, agrees. He refers to his readers as affluent urbanites, even if they live in the suburbs. Why? “We have an urban mentality and our cultural hub is still the city,� he says.

Affluent blacks are heavy consumers of luxury goods, particularly as they climb the pay scale. Because this is the first generation of African Americans to truly “make it� to middle-class status in large numbers, they tend to want to show this success with top-shelf liquors and expensive clothing, says Peiris. As the children of today's affluent blacks grow up, they will feel less of a need to display the image of success, Peiris believes. This will ultimately change Hennessy's advertising strategy, but for now, the company is still stressing images of luxury and affluence to black suburban consumers.

Yet not all luxury marketers are paying attention to the growing number of affluent black suburbanites. It is a segment that many upscale marketers are missing, says Veon Sussewell, research director at television station WB36 in Atlanta. “The market is hot, hot, hot for upscale African Americans,� she says. But marketers “don't understand the potential buying power,� she says. In her region, it's still lower-ticket items, like fast food and sneakers, which are targeted to blacks. Luxury marketers have told her that they are not interested in placing ads targeting blacks. “Here it is, 2001, and I'm still fighting the same battles,� she says. “Marketers should open their minds.�

New Cribs

Blacks moved to the suburbs more often than others over the past decade.

1990 2000 % INCREASE
Total 61.2% 62.2% 1.0%
Black 34.2% 38.9% 4.7%
Asian 50.2% 54.3% 4.1%
Hispanic 45.7% 48.8% 3.1%
White 68.6% 70.6% 2.0%
Source: U.S. Census Bureau, American Demographics analysis

Cash Flows

Blacks who move to the suburbs receive the largest increase in household income.

ALL AREAS CENTRAL CITIES SUBURBS SUBURBAN BUMP
Total $40,816 $35,573 $47,708 34.1%
White $42,504 $38,668 $48,598 25.7%
White Non-Hispanic $44,366 $41,901 $50,306 20.1%
Black $27,910 $25,865 $37,113 43.5%
Hispanic $30,735 $27,762 $35,462 27.7%
Source: U.S. Census Bureau, American Demographics analysis

Raking It In

Black suburbanites are more likely to have an income greater than $100,000 than those living elsewhere.

ALL AREAS CENTRAL CITIES SUBURBS
Total 12.3% 10.6% 15.8%
White 12.9% 12.1% 16.0%
White Non-Hispanic 13.8% 14.0% 16.8%
Black 6.1% 4.5% 10.0%
Hispanic 5.2% 3.6% 7.7%
Source: U.S. Census Bureau
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