[Image of: RetailWire Logo and Tagline (for print)]

BUSINESS TIPS

ChannelAdvisor:
Online Selling Strategies
RR Donnelley:
In-Store Marketing
LoyaltyOne:
Enriching Customer Relationships
 
[18 comments]

Hispanics - A demographic retailers can't ignore

March 11, 2014

Through a special arrangement, what follows is an excerpt of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.

In the recent shopper study, "Amazon Can't Do That — Consumer Desire and the Store of the Future," a key finding was Hispanic consumers' strong preference for community-driven environments and emotionally satisfying in-store experiences.

As the Hispanic population expands from 17 percent of the country's total in 2012 to a projected 31 percent by 2060, such insights will be crucial for retailers to attract and gain the loyalty of Hispanic shoppers.

Four key ideas to consider:

1. Take a field trip.
Executives at mass-market neighborhood chains could learn a thing or two by visiting their Hispanic grocer. Color. Music. Beautiful displays of produce and flags of the world. This is a shopping experience not only bold in emotion and energy, but rich in human connection and top-rate customer service. Mass-market retailers need to step it up.

2. Be ready to build a relationship.
This is where strong customer service comes into play. Focus on winning their hearts and minds. Be prepared to answer questions and slowly build the sale. "Latinos interact in a more personal manner," Juan Tornoe of Cultural Strategies told The New York Times recently. "We want to be recognized as a person. Connect with me on a personal level before you start selling me."

3. Engage in social media.
There are more than 33 million U.S. Hispanic internet users, and more than half of them use mobile devices to access the web. According to a 2012 study by Experian Simmons, Hispanic consumers were more likely than non-Hispanics to use social network sites to learn about companies and products they like — as well as purchase products seen on them, and post ratings or reviews for others to see.

4. Understand the cultural differences between Latinos.
Think all Hispanics love soccer? Many Puerto Ricans prefer baseball and basketball. Be sure to understand the composition of local Latino markets and adjust messages and campaigns accordingly. While it's true that Mexican Americans represent the highest number of Latinos in the U.S. (around 65 percent), large pockets of Hondurans and other nationalities should not be overlooked. Be aware of individual national holidays and other opportunities for promotions that draw them into your store.

5. Create dynamic, social spaces.
A major takeaway from the Amazon study is as applicable to Hispanic consumers (maybe more so) as the U.S. population at large: environments that encourage engagement will be a place customers want to visit again and again. Encourage customers to touch and learn about new products. Stylize your associates' wardrobes so they're easy to identify when wanting to start a conversation. Create that "third space" where people want to spend time away from home.

Discussion Questions:

How should stores be adjusting to meet the needs of the country's fast-growing Hispanic population? What's the best way to learn what changes may or may not be necessary? What notable or surprising changes may be ahead for retail marketing and in-store strategies?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Do you agree or disagree with the view that retailers can appeal to Hispanic shoppers without alienating their core customers?

Comments:

I would say that whether you're Caucasian or Hispanic, or any nationality, people do want to have a relationship. Customers do want to feel part of a community that cares. And in an increasingly impersonal world — the one big data is promising — people do want to be seen as a person first.

[Image of: View Braintrust Panelist button]
Bob Phibbs, President/CEO, The Retail Doctor

Here's problem #1 - not all Hispanics are the same. I've sat and listened to people talk about "The Hispanic Market" at several different events over the past 3 years. I've also looked at clothing assortments tailored to "The Hispanic Market."

I live in South Florida and grew up in New York, so I can speak fairly objectively about this. Not all Hispanics are the same. It's like saying "How can we cater to the Caucasian market?" We'd roll our eyes if someone asked us that.

So, there are really multiple questions here: How can we cater to the Puerto Rican market? How can we cater to the Mexican market? How can we cater to the Cuban market? How can we cater to the Venezuelan market? How can we cater to the Brazilian market? I'm not even sure Brazilians, who speak Portuguese should even be included.

I worry that the author and others don't follow their own advice and take field trips. You have to take multiple trips to multiple locations. Absent doing that, we're still going to miss the boat.

[Image of: View Braintrust Panelist button]
Paula Rosenblum, Managing Partner, RSR Research

 
10

"Think globally but act locally." That's the essence of what this article tells us. While retailers must recognize the growing Hispanic population, they must be sensitive to cultural differences within this segment.

Lee recommends visiting Hispanic grocery stores. However, I suggest that retailers will better understand the opportunities for building relationships among Hispanics when they visit their homes and experience how they live and what they desire for themselves and their families.

Visiting other stores can lead to copycat behavior. Spending time in the homes of consumers encourages independent creativity in the development of new strategies and tactics. We want to foster satisfying experiences and not limit ourselves to in-store visual impact.

[Image of: View Braintrust Panelist button]
Joan Treistman, President, The Treistman Group LLC

Well, if you lived in AZ — near me — you would probably move away. Wait, back on track...what I meant to say is that in AZ retailers are way ahead of this study. Most shoppers don't wait for all the studies and research that we seem to have done in retail. No, they just shop. We all know how Macy's drove their regional merchandise assortment programs and that the AZ store are not anything like the MN stores — especially in the interior "image."

Here in AZ, we are seeing more of the larger food chains expand their food offerings and, for years, Walmart has expanded signage to support the multilingual needs we have in AZ.

Think AZ FIRST and come on down and visit our stores. We can teach you lots about retail across the Hispanic space.

[Image of: View Braintrust Panelist button]
Tom Redd, Vice President, Strategic Communications, SAP Global Retail Business Unit

If a retailer is interested in targeting the Latino community, they need to take the time to learn about and better understand their needs and wants. The Hispanic community is strong and growing in the US so for retailers to not focus on this market, especially those with operations in the southern half of the country, would be a mistake.

One company that appears to be doing an exceptional job here is The Legaspi Company which was recently recognized by Fast Company as one of the most innovative companies in retail. If retailers aren't sure how to proceed, benchmarking against a leader is a good place to start.

[Image of: View Braintrust Panelist button]
Bill Davis, Director, MB&G Consulting

While there are clear differences in shopping patterns between Hispanic consumers and the more general market, it's important to recognize that Hispanic consumers not only differentiate by nationality, but also by level of acculturation as well. Hispanic consumers who are second and third generation Americans begin to resemble the general market more and more in their behavior.

At the same time, specific approaches, strategies and design elements will always have additional appeal to this marketplace.

[Image of: View Braintrust Panelist button]
Mark Price, Managing Partner, LiftPoint Consulting, Inc.

Having done loads of qualitative research with Hispanic consumers, I would agree that most retailers get caught up in the "oh we need to have a Hispanic strategy" without really taking the time to understand the consumer.

Just look at a few of the characteristics retailers should consider when focusing on the US Hispanic market: country of origin; language of choice; first-, second- or third-generation; bi-cultural vs. multi-cultural vs.Hispanic-only; and level of/interest in acculturation.

Definitely doesn't lend itself to a one size fits all solution!

[Image of: View Braintrust Panelist button]
Kelly Tackett, Research Director, Planet Retail

These findings should not be a surprise; instead a wake up call for all retailers. People like to shop in fun, engaging environments and people like to be recognized and engaged, not sold. Ironically, these two maxims are not limited to Hispanic shoppers.

People like to shop. Take a look at boutique retailers and even QVC, where excitement and interaction abound. They don't like to shop in boring stores in which they don't feel appreciated.

Ironically, the sensory experience is one bricks and mortar retail advantage Amazon has not pursued (at least not yet). The lessons from the WD Partners research should resonate with all bricks and mortar retailers regardless of their target market.

Regarding social media, it is the new digital back yard fence or front stoop for today's consumers. Engage them, listen to them, learn from them, and respect them. We now have the tools to do so.

[Image of: View Braintrust Panelist button]
Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

The most important aspect is to be educated and learn more about Latin cultures and what makes each of them unique. One of my biggest pet peeves is the confusion I constantly see. For example, usually Americans think all things Mexican are the same for all Latins and and all things Latin are Spanish, from Spain. Mexico as well as all Latin countries, have their own music, for example, but whenever a Mexican thing is advertised or referred to, Spanish music is always used.

I am a Puerto Rican raised in Puerto Rico with a lot of exposure to American culture who now lives in North Carolina. As much as most Latin countries in America have influences from Spain, no, we are not all Spaniards or Mexicans. And these confusions are the ones that will appeal or not to Latin shoppers.

Hire educated, well versed Latin key players and see your business bloom.

'PRMKTGSPEC'

Properly apply the marketing discipline.

Avoid outdated axioms and know your consumer, know your product, be relevant. This is the only way to learn what changes may or may not be necessary and meet the needs of the fast growing demographic.

Avoid experts who claim knowledge of a "Hispanic marketing" practice entirely based on their ethnic background, spent time living or working with Hispanic consumers in a non-marketing function, speaking Spanish as a second language, birth, mission, marriage, or peace corps experience. Imagine trusting your mainstream marketing efforts to a social worker because he speaks English and lives in the community? Language and culture are variables in marketing, not the formula.

Keep in mind that the Hispanic consumer segment is fluid and evolving. Keep in mind that the volume and age of the segment will also influence your mainstream consumer. The changes to retail marketing and in-store strategies should be evolutions, not abrupt or radical changes.

The best news for retailers, and one of the few generalities about the Hispanic consumer, is that this consumer is young and in the acquisition stage of their consumer lives.

[Image of: View Braintrust Panelist button]
Carlos Arámbula, Managing Partner, MarcasUSA LLC

I feel the same about "the Hispanic market" as I do talk about "the women's market," "the boomer market," "the gay market," or "the millennial market." There is no such thing, because each group is made up of individuals with widely varying interests, needs, incomes, educational levels and expectations. Let's focus on the all encompassing American market and on in-store, on-line customer service while acknowledging that ethnic food products and textiles (for example) increasingly hold interest for a broad section of melting pot America.

'Liatt'

If I could say it better than "Liatt," I'd attempt it, but I won't repeat what is just right for the topic!

'Scanner'

There is nothing new here. Traditional format stores have struggled to capture significant share of this consumer group for decades. Three words can make this mystery crystal-clear: 1. Community, 2. Community, 3. Community.

Almost 20 years ago, Pfizer Pharmaceuticals installed freestanding kiosks in a few dozen Hispanic churches in Los Angeles. The kiosks offered internet access to those families who needed it. Ads on the kiosks drove revenue through the roof on promoted products. Pfizer is smart enough to know how to reach that demographic.

There are many other ways and channels by which to reach these people, however, the most effective channels typically involve some aspect of community.

[Image of: View Braintrust Panelist button]
Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

If this were not an important topic, we wouldn't revisit it over and over (and over) through the years. In the early 80s I was a member of the Kroger taskforce for Hispanic marketing. In the mid-80s, same deal with Safeway. And, I'm sure there were taskforces that predated my involvement.

We always reached the same conclusions, and today's discussion could be a time capsule from way back when. Nothing new. And that's a good thing, because it underscores the constant threads of truth woven through the tapestry of Hispanic Marketing. I do have one recommendation that may be new to some of us, however. In working with supermarkets all over the country, by far the most indelible store visit I ever made was to Fiesta Mart in Houston. A carnival atmosphere. Outdoor vendors near the entrance. Frozen goat heads in the meat department! It was eye-opening. Today there are Fiesta Marts in other cities, and I have no idea how closely they mirror the one I saw in Houston. But if there is a location near you, I strongly encourage a visit.

[Image of: View Braintrust Panelist button]
M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

All of our proprietary research shows that Hispanic shoppers behave differently throughout the purchase cycle.They shop as a family, they make more decisions in store, have higher trip frequency, give importance to freshness, and yearn for that "authentic Hispanic" store (with my brands). Successful Hispanic retailers (Vallartas, Sedanos, Publix, Cardenas, Mi Pueblo, etc.) cater to these behaviors and are very effective at capturing the hearts and wallets of this target. This is the new majority in places like California, Texas and Florida. If you need to grow you can only grow by focusing your efforts were the growth is. :)

Roberto Siewczynski, EVP, Catapult Marketing

The key points of understanding and optimizing the various segments of the "Hispanic" market, as well as creating human, engaging experiences, are basic fundamentals of today's retail environment. These same points are applicable on attracting Gen Y overall, and in reacting to the various segments of the "Asian" market, and other core ethnicities - even white America! Finally, as the various Hispanic segments continue to grow, they influence all consumers via popular music, sports, and other references, meaning that a much higher percentage will behave in a similar way.

[Image of: View Braintrust Panelist button]
Mike Osorio, Senior VP Organizational Change Management, DFS Group

I can't speak to how the U.S. changed in the 6 years of my absence (I'm returning for good this Summer), but I'll share my experience of moving from Southern California to Indiana in 2005. I and my family missed the strong Hispanic culture, and felt Indiana was rather bland; hard working, nice people, but devoid of outward shows of passion. Of course LA is a great mixing bowl of culture, but the authentic Mexican restaurants, grocers and festivals add a patina to the mosaic. I hope retailers are now focusing more on this demographic.

[Image of: View Braintrust Panelist button]
Jerry Gelsomino, Principal, FutureBest

If you are the owner or in management of a company and want to develop a greater number of Hispanic clients, you must first open up your mind. Treat people the way they want to be treated, not just the way that is most efficient and convenient for your company to serve customers.

Perform your own Hispanic focus groups with the help of an outside facilitator. You will get honest answers and ideas that will set you apart from your competitors. Test the ideas out and stick with the ones that work.

Tom Borg, Business Expert, Tom Borg Consulting, LLC

In addition to understanding levels of acculturation, language preferences, complexity of cultural identity (i.e. bi-cultural, multi-cultural), it is also critical to understand the connection between generations and their cultural self-identification as this can certainly impact in-store expectations and behavior.

Millennials will have a different connection to their 'American' vs. 'Latino' side than their parents or grandparents. So how this translates into a store environment and how this differs by category, brands, area of store, etc, would need to be taken into consideration.

Peter Askew, Exec director of strategy, Clear

Search RetailWire
Follow Us...
[Image of:  Twitter Icon] [Image of:  Facebook Icon] [Image of:  LinkedIn Icon] [Image of:  RSS Icon]

RetailWire's
Getting Started video!

View this quick tutorial and learn all the essentials...

RetailWire Newsletters