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How Brands Are Capitalizing on the Lucrative LGBTQ Dollar

Brands are doubling down on their pursuit of the ever growing—and increasingly lucrative—LGBTQ market

by Todd Plummer

June 17, 2024

LGBTQ_Carlos De Toro Photo: Unsplash

It’s often thought that a gay person in possession of disposable income must be looking for ways to spend it. That’s the mindset that marketers have employed, at least. By some accounts, LGBTQ people now control $3.9 trillion of spending power globally, and according to 2021 United States census data, queer dollars—often referred to as “pink money”—are the fastest-growing minority segment in the country.

Basic economics would assume that businesses would be smart to try to capture a share of that market to increase their revenue and profitability. But as this segment grows and develops, speaking to it has grown complicated. Pink money has proven to be anything but straightforward. Consider what happened to Target last year, when widespread backlash against its Pride collection led to removal of some of the merchandise from all of its stores, and a painful 15-percent drop in its stock price.

2023 was rough for Bud Light, too. After a social-media partnership with trans activist Dylan Mulvaney, Anheuser-Busch found itself embroiled in controversy arising from its more conservative client base. The ordeal, in part, cost Bud Light its long-standing position as America’s number-one beer to Modelo Especial. CEO Brendan Whitworth stated in a CBS interview that “the conversation surrounding Bud Light has moved away from beer…and Bud Light really doesn’t belong there.”

But doesn’t it? According to Gallup, LGBTQ self-identification in America clocks in at 7.6 percent, up from 3.7 percent a decade ago. Not addressing this segment isn’t just bad business—it could be a trillion-dollar blind spot. For every Bud Light fiasco, there are numerous companies and campaigns getting it right. In an increasingly complex marketplace, here is what businesses and destinations are doing to attract the gay dollar.

Different Consumers, Different Habits

A threshold to understanding LGBTQ consumers is acknowledging that queer experience is anything but monolithic. Today, marketers are still uncovering the many layers of how to effectively engage this segment. The community encompasses an endless variety of lived experiences, preferences and nuances: Some are single, some are in couples, some are in polyamorous multi-partner relationships; a trans individual’s consumer characteristics may not be aligned with a lesbian’s; a queer family with children has a very different profile from a DINK household (“Dual Income, No Kids”); and so forth.

Pink money’s combined buying power is currently on par with that of other minority groups, including Asian, Black and Hispanic Americans, and there are numerous categories in which LGBTQ households outspend their non-LGBTQ counterparts—including bookstores, liquor stores, personal care products and travel. Marketers are starting to catch on. A study published in the Journal of Public Policy & Marketing confirmed there has been a global trend away from understanding LGBTQ consumers through “the sociological construct of master status, where a social characteristic or position dominates an individual’s identity,” and toward “a more holistic understanding of these consumers and their intersectional identity characteristics.” The way forward, in that case, would involve complex, carefully constructed strategies to speak to the LGBTQ community’s numerous subsegments, as opposed to a blanket approach.

Financial Equality

JPMorgan Chase & Co. has been a supporter of LGBTQ rights since the ’90s / Photo: Richard Levine/Alamy Stock Photo

While marketers love to focus on the LGBTQ segment’s ability to spend on such things as travel and consumer goods, roadblocks to true financial equality remain. LGBTQ people experience significantly higher rates of unemployment, food insecurity and poverty, lower rates of home ownership, and on average, earnings of 89 cents on the dollar relative to non-LGBTQ people. That gap becomes more pronounced for LGBTQ people of color, and for those identifying as women.

So while it appears that the culture is becoming more accepting of LGBTQ people generally, there remain numerous issues on the path to true equality that the world of financial services is only just starting to uncover. For example, trans people who change their name often lose their entire credit history, and only a few institutions like Mastercard allow individuals to use their chosen names, as opposed to legal names, on credit cards. Financial planners aren’t always understanding of the significant costs borne by queer people in pursuing fertility and surrogacy treatments, or that generational wealth transfers don’t necessarily happen from parent to child as in traditional straight lineages.

Institutions are tackling these issues in their own way. JPMorgan Chase & Co. has operated a Pride business resource group since 1996, and currently has an entire Office of LGBTQ+ Affairs dedicated to advancing equality and inclusion for the queer community. And BMO has organized Rainbow Deposits, a social media campaign to raise funds for Rainbow Railroad, a nonprofit helping LGBTQ people find safety around the world.

But when it comes to closing the LGBTQ community’s financial literacy gap, there is still work to be done. Activist Nick Wolny, finance columnist for Out magazine, is outspoken on how global financial systems need to evolve to meet the unique needs of LGBTQ people. “These financial systems were not built for us, or for someone changing the gender on their birth certificate, or whatever the case may be,” says Wolny. “We need to be loud and active about how these systems don’t work for us. We need to broaden the aperture of how financial services impact people’s lives.”

When It Comes to Travel

One market where queer consumers stand out is travel. LGBTQ travelers spend significantly more on leisure travel than other segments, and according to Reports and Insights, the annual LGBTQ tourism market is expected to swell to $610 billion over the next eight years.

Destination marketers around the world are doubling down on efforts to capture their slice of that pie, targeting the LGBTQ community with gay-themed festivals and events. These range from gay ski weeks in Whistler, Canada, and Arosa, Switzerland, to Mardi Gras in Sydney and One Magical Weekend in Orlando, Florida. This growing global appetite for LGBTQ events is having quantifiable effects on the market—Airbnb has reported that bookings made for the purpose of traveling to Pride celebrations generate more than $77 million globally.

And it’s not just destinations. Airlines, too, are working to reach more LGBTQ audiences than ever. Not only is United the first airline to offer nonbinary gender booking options, but last year the airline also started providing nameplates that, if desired, display the crew member’s first name and preferred pronouns. And that’s just a more recent example of airlines creating accepting environments for diverse audiences—in the 1990s, American Airlines formed a task force specifically for marketing to the LGBTQ community.

Mykonos, Greece, a longtime destination for the LGBTQ community / Photo: Michal Krakowiak/E+/Getty Images

As the global LGBTQ tourism market expands, the concept of “gay travel” itself is also growing in complexity. LGBTQ travel is not just about the “where” of visiting “classically gay” destinations such as Fire Island, Provincetown or Mykonos—it’s becoming about the “why,” too. Travel experts are pinpointing new microtrends within the LGBTQ segment, including queer family-friendly travel and holidays designed for polyamorous relationships. As social acceptance of the LGBTQ community continues to grow and diversity continues to flourish, so will the supply-and-demand dynamics of its correlated travel market.

Whistler Pride ski festival / Photo: Courtesy of Tourism Whistler/Mike Crane

Pride: A Year-Round Proposition

Engaging LGBTQ consumers takes more than a rainbow flag—and it is no longer enough for marketers to activate during Pride month and not support LGBTQ people the rest of the year. That’s partially because of social media, and the availability of information on the Internet. Millennial and Gen Z consumers are more in tune than ever to which corporations support LGBTQ people year-round. “The big change in recent years is that if you have a Pride float one month but you’re donating to Greg Abbott’s campaign the next, Internet sleuths are going to notice,” says Wolny. “Large corporations are going to try to play both sides of the fence as much as they can, but it’s not what consumers want anymore, especially with queer issues.” For that reason, effective resonance with LGBTQ consumers requires companies to not only market effectively, but also to embody the values of understanding, support and genuine engagement.

It begins with messaging. LGBTQ consumers have long faced discrimination in society and are therefore acutely attuned to the subtleties of communication. Companies that show respect for gender-neutral language, chosen pronouns and authentic representation of LGBTQ people in advertising will resonate more genuinely with this community than those who don’t. According to a recent GLAAD and Edelman Trust Institute study, Americans are twice as likely to use a brand that demonstrates a public commitment to LGBTQ rights.

Gucci ad for its perfume Guilty, featuring Elliot in Canada Page, Julia Garner and A$AP Rocky / Photo: Courtesy of Glen Luchford/Gucci Beauty

Companies on all ends of the consumer spectrum are hopping on board. Last year, Gucci unveiled a new campaign for its perfume Guilty featuring actor and trans activist Elliot Page, calling the campaign “an ode to self-acceptance, friendship and love in all its forms.” According to GLAAD’s Visibility Project, which tracks LGBTQ representation in advertising, this year’s Super Bowl included ten ads that explicitly included LGBTQ people, up from just four in 2023.

Yet buying ads is not enough. Consumers expect brands to connect with the LGBTQ community year-round, not just during the month of June. American Express, for instance, offers cardholders experiences in partnership with LGBTQ-friendly organizations throughout the year, from sponsoring LGBTQ film festivals to offering LGBTQ-themed promotions with Barry’s Bootcamp. Men’s apparel brand Chubbies offers a year-round Pride Collection—a portion of sales benefit Foundation 43, a nonprofit founded by Chubbies to provide access to effective mental health care and suicide prevention for LGBTQ youth.

Beyond the public-facing efforts, however, it also matters how companies conduct themselves internally. The Human Rights Campaign’s Corporate Equality Index (CEI) is a widely accepted metric for measuring a company’s policies, practices and benefits pertinent to LGBTQ employees. According to a study published in Accounting & Finance, LGBTQ friendliness has quantitative effects on a company’s bottom line: Researchers measured various firms’ CEI against stock market valuations and profitability, and found that LGBTQ-friendly corporate policies enhance firm performance.

When considering the chase for pink money, there has been a complete sea change over the last ten years. As social attitudes change and acceptance of LGBTQ people becomes more widespread, companies feel empowered to take more action.

It no longer seems like the business world is playing catch-up or dipping its toes into the LGBTQ pond. Results have been decidedly mixed—consider the Targets and Bud Lights of the world—but determination for capturing the gay dollar has never felt stronger.