Future Watch: LGBTQ Markets

Future Watch | 11 Sep 2012

Since the 1990s, being lesbian, gay, bisexual, transgender or
questioning (LGBTQ) has gained gradual visibility and acceptance in
countries around the world, the ultimate challenge being for gender
diversity to reach normality. Today, even the most conservative
brand strategists realize that catering to the LGBTQ community is an
opportunity not to be missed as acknowledging consumers who are
still used to being ignored, many with above average disposable
incomes, does wonders for brand loyalty. In many cases, however,
the communication between brands and LGTBQ communities is nonexistent, failing to realize the business opportunity that they
represent.

Future directions
Business and gender issues;
Targeting LGBTQ customers despite controversy;
Demand for retirement homes for the LGBTQ segment grows.

New business openings

LGTBQ communities are very heterogeneous and their newly
acquired right to marry and form families create new
alternatives to the traditional LGTBQ consumer;
The fact that they tend to have more discretionary time means
that they spend more on entertainment, leisure, tourism and
the internet, thus falling in either the SINK (single income no
kids) or DINK (double income no kids) categories;
LGTBQ communities will become more mainstream than niche.
Meanwhile, using LGTBQ role models in non LGTBQ media sends
out a positive message about the community.

The new context

Gradually, most companies appear supportive of LGTBQ demands for
equal rights. However, levels of tolerance vary across and within
countries, forcing companies into a balancing act between different
customers. In some cases, there is the risk of alienating those who
have a different opinion on issues such as same-sex marriage. For
instance, in July 2012, the Jim Henson Company, behind such popular
shows as Fraggle Rock and The Muppets, controversially ended all
business relations with Chick-Fil-A due to the fast food chain's CEO's
statement against same-sex marriage. The production company's
decision was controversial.
In Latin America the LGTBQ community is larger than companies
appear to realize. Thus, research from Out Now Consulting (an
agency offering research-led gay marketing services to companies)
shows that they could account for more than one million new vehicle
sales across the region in 2013, with up to 100,000 in Mexico alone.

The company's CEO, Ian Johnson, believes that, like the auto
industry, there are a broad range of consumer goods and services
with a large, yet untapped, LGTBQ consumer base behind them.
In February 2011, the Mexico-based Minerva microbrewery launched
two new beers aimed at the gay and lesbian community in Japan,
Mexico and Colombia. The beers, described as 'artisan honey-ales',
feature a peel-off sticky label, which can be worn by the drinker as a
symbol of gay and lesbian pride. An initial run of 500 cases sold out
immediately and the company began production of a second batch
after receiving orders from Argentina, Colombia, Ecuador, Chile and
the USA. In Brazil, the Cultural Centre for the Memory and Study of
Sexual Diversity, supported by the Ministry of Culture and the Metro
newspaper, announced that it would open the first museum
dedicated to the city's gay history in So Paulo in 2013.
In India, except in big cities like Mumbai, there is little social
understanding of gender diversity. Yet, Manvendra Singh Gohil, (the
first person of royal descent to have declared his homosexuality in
2006) is developing a retirement home for gay people in Gujarat,
which Oprah promised to inaugurate next year.
Growth of Same-Sex Couple Households in Selected US States
% growth

Source: The 2000-2010 United States Census

Business and gender issues

As the face is considered the mirror of the soul, employees are seen
as the face of brands. As companies compete in a very demanding
environment, executives have begun to recognize the great potential
that their employees and customers have on sales. Thus, adopting
non-discriminatory work and hire policies can have a positive effect
on future revenues.
Meanwhile, in the USA, while some states have passed laws and
ordinances to establish workplace protections for LGBTQ employees,
it remains legal in 29 states to discriminate against job applicants and
employees because of their sexual orientation, and in 34 states
because of their gender identity. Despite this, private employers
have implemented fully inclusive non-discrimination policies at rates
that are ahead of lawmakers. According to the report from Human
Rights Campaign 2012 (HRC) a record 277 of the Fortune 500-ranked
businesses have official Corporate Equality Index ratings based on

submitted surveys with an average rating of 78. While 88 of the

Fortune 500-ranked businesses achieved a 100% rating, with ten of
the top 20 Fortune-ranked businesses at this top score, 86% of them
include sexual orientation in their non-discrimination policies and
50% include gender identity. Also, 60% of the total Fortune 500
offers equivalent medical benefits between spouses and partners and
19% offer transgender-inclusive healthcare benefits, including
surgical procedures.
The report highlights that the buying power of LGBTQ consumers is
around US$743 billion in 2012 in the USA. HRC President Joe
Solmonese said: In this economy, when every dollar counts, it is
particularly important for companies to see that LGBTQ inclusion is
good for the bottom line."

Targeting LGBTQ customers despite controversy

In June 2012, OREO posted a picture of a rainbow sextuple-stacked
cookie to its Facebook page in honour of Pride Month. While the
responses were mainly positive, a considerable number of people
were outraged and called for a boycott of the products. Basil
Maglaris, Kraft's associate director of corporate affairs, said that the
positive responses far outweighed the negative ones.
A May 2012 post on the American Family Association website stated,
"AFA is promoting a boycott of Home Depot until it agrees to remain
neutral in the homosexual culture war." The pledge condemns Home
Depot for giving "financial and corporate support to open displays of
homosexual activism." In response to the pledge, Chairman Blake
responded, "We are, and will remain, committed to a culture that
fosters an inclusive environment for our associates, our customers
and communities in which we exist."
In June 2012, aside from the One Million Mom's boycott of the
department store for choosing openly-gay talk show host Ellen
DeGeneres as its spokesperson, J.C. Penney was under fire after
releasing a Father's Day campaign featuring two gay dads playing
with their children.
In Los Angeles during May 2012, GAP erected a billboard featuring a
same-sex couple embracing while sharing one t-shirt. The
advertisement was part of the apparel brand's 'Be Bright' campaign
and included the tagline 'Be One' alongside an image of actor Rory
O'Malley and his boyfriend. Despite facing criticism from some USbased religious organizations, GAP has held firm in its support of LGBT
equality.

Demand for retirement homes for the LGBTQ

segment grows
A growing challenge as well as business opportunity is the
development of products and services related to old age.
In some cases, people who had to hide their sexual condition in their
youth but could in their adult days express it freely, might feel that
they have to go back inside the closet in their senior days as many
retirement homes do not cater for them. That is the case of Paulina
Blanco and Encarnacin Granjo in Spain. Two devoted Christian
lesbians, who, as they get older, are concerned that they might not
be able to live with dignity without giving up their identity. In Mlaga,
Gaylife, a projected retirement centre for the LGTBQ community was
introduced during October's 2011 International Business Gay tourism

fair, Expogay. According to the president, Javier Checa, despite more

than 700,000 gay people over the age of 65 living in Spain, the
country remains behind in the creation of these services. There is a
gay market for all sorts of possibilities: public residencies, shelter
flats, or like ours, mix residencies with common areas and services
and private housing, he said.
In Palm Spring, in the USA, Boom, a community for gay retirees, is
set to be completed by building firm Boom Communities during 2014.
With eight separate areas, each designed by a different architect
and following a distinct theme. A number of amenities are planned,
including two nightclubs, a gym/spa, open-air market, ten swimming
pools, four restaurants, five performance spaces and a wellness and
sports centre. The development will also feature a boutique hotel in
order to attract visitors to the resort.

Future scenarios
LGBTQ markets are at different levels of development in different
parts of the world. Eventually, communicating with LGTBQ
communities should develop from tolerance to inclusion and normality.
While many LGTBQ couples are forming families and having children,
other still remain childless, allowing them to spend their discretionary
income on non essential items. As older LGBTQ people seek to retire,
there is a growing demand for resorts and residences for them.
For further information please contact Daphne Kasriel-Alexander,
Consumers Editor at Euromonitor International:
daphne.kasriel@euromonitor.com

Euromonitor International 2013