Hispanic Shoppers Not Satisfied
By George Anderson
Retailers have a long way to go if they are going to take advantage of the Hispanic market opportunity that so many say they are targeting.
According to research from Unilever (a RetailWire sponsor), Hispanic shoppers are less satisfied than the general population when it comes to supermarkets, drugstores and other frequently shopped retail locations.
Mike Twitty, senior group research manager for shopper insights at Unilever, said, “Only 35 percent of Hispanic shoppers are completely satisfied with their shopping experience today. In the general market, that number is 58 percent.”
Food, said Mr. Twitty, is especially important when trying to connect with Hispanic consumers.
“From family to community, food for Hispanic Americans has an emotional and cultural significance that extends beyond eating. Hence, the Hispanic shopper thinks about every aspect of food shopping and preparation,” he said. “She plans her trips carefully — apparently more so than the general market shopper — and not only around what she has at home and what she needs, but around the value she can obtain.”
Shopping for the best value is a priority among Hispanic women. According to press release announcing the top line of Unilever’s findings, “Hispanic women are significantly more aware (by a 48 percent to 36 percent margin) of ‘specials’ before going to the store than are general market shoppers. Even within the store, Hispanics’ awareness of specials is higher than the general markets.”
One area where Hispanics seem to find less value than other members of the consumer population is with frequent shopper or loyalty cards. According to Unilever’s Research, 51 percent of Hispanic consumers said they have at least one card but only 44 percent of those actually use them.
One finding of the Unilever research supports the widely held position that what Hispanic consumers buy is directly related to their country-of-origin. What makes this area interesting
is that, according to the research, while the demands for certain types of product vary, how Hispanic consumers shop is much the same regardless of where their ancestral home
is.
Moderator’s Comment: How can retailers make use of Unilever’s research to improve their Hispanic marketing efforts?
Mike Twitty identified what makes Unilever’s research valuable.
“It’s the first time anybody really has measured Hispanic shopping behavior,” he told Ad Age. Most of the other research out there in the marketplace is
based on what shoppers said they did. But people have a tendency to overstate their behaviors.” –
George Anderson – Moderator
The Unilever study seems to compare Hispanic shoppers to average shoppers. But it appears that the Hispanic shoppers studied have much lower incomes than average shoppers. Would Hispanic behavior and opinions, as measured by the study, be very similar to average shoppers of the same income?
Another study I’ve seen reported that Hispanics shop more often than average shoppers in the U.S. – that’s good news for grocery stores. However, the study also went on to say that Hispanics shop LESS often in traditional grocery stores. They are more likely to shop in alternative outlets such as specialty stores that carry Hispanic items. Obviously average grocery stores are not carrying the items that Hispanic shoppers want to buy. While promotions may be targeting the Hispanic population, they won’t frequent the stores unless the products they want to buy are there.
GMDC recently completed a very extensive study on Multicultural Marketing, which includes some very detailed and fact based information on how to more closely connect with this fast growing and very differentiated consumer. The study was supported by suppliers such as J&J, Unilever, Schick, Fuji, and others, and included retailer insights and sales information from key retailers such as Albertsons, Basha’s, Rite Aid, Stop & Shop, Pueblo, United Supermarkets, etc. All of this information was quantified and filtered by ACNielsen, so the level of detail is substantial.
If you don’t think the Hispanic influence is BIG, consider this fact. Hispanic shoppers drove $686 Billion in buying power in 2004, and that # will jump to $992 Billion by 2009; a 45% increase.
If you don’t have this study get a copy and read it cover to cover and you will understand what’s at stake for retailers…
I have conducted enough grocery store research among Hispanic consumers to come to the following conclusions:
1) The grocery shopping behavior and consumer likes and dislikes in this regard vary widely — sometimes at opposite ends of the spectrum — when you segment the Hispanic consumer population by acculturation and socio-economic levels.
2) What grocers think Hispanic consumers like usually does not match what Hispanic consumers actually like. For instance, the customer experience is not limited to product offerings.
3) When it comes to shopping for authentic Latin American, Mexican, Caribbean, and Spanish dishes: Regardless of the consumer’s country of origin — General market stores fail to provide an adequate assortment (if any) of the ingredients required to prepare these dishes.
Having lived in urban and suburban areas (L.A.) populated with Hispanics, I’ve always noticed for years the smaller Mexican and Central American stores were much more frequented than standard super markets. It was nothing to see a Vons or Ralphs close up and either made into smaller stores including a Hispanic market or someone like Gigante would move in.
This does explain somewhat why Hispanic shoppers in the U.S. aren’t as satisfied, when not offered their own style of store. Due to a lack of assimilation, this trend will continue and I’m not sure the major markets can do much about it, although the simple answer is to dramatically change over stores (including name?) in these Hispanic markets.
I read an article that stated 799 Hispanics took part in the study and that nearly 9 out of every 10 respondents were born outside of the U.S. This is a wonderful representation of first-generation Hispanic consumers but this also does not account for second, third, and fourth (Acculturated and Assimilated demographic groups) generation Hispanics. My research used to create the Top 50 Hispanic Markets Report indicates these two other groups have a considerably higher household income and have significantly different shopping preferences and behaviors compared to first-generation Hispanics. Camille’s point about Hispanics shopping less often in traditional grocery stores is well taken. To expand on her point, first-generation Hispanics shop less often in traditional grocery stores while acculturated and assimilated (second, third, fourth generation) Hispanics prefer traditional grocery. Country of origin as well as acculturation level must be carefully taken into consideration when targeting the Hispanic consumer. These differences cannot be ignored.
I’m only surprised that anyone can be surprised by these results. In far too many instances manufacturers and retailers (obviously not all by any means but possibly too many) sell what they want consumers to consume rather than paying attention to what is actually being purchased. Perhaps now that such a large company with a perception of authority behind it has said so more notice will be taken.
Where grocery retailers miss the mark is their lack of Latino preferred fruits and vegetables (i.e.. cassava, plantain, coconut, etc.) Latinos are not monolithic, how a Dominican cooks is nowhere the same how a Mexican cooks food. Latinos use more fresh fruits and vegetables than the general population and that’s where the frustration lies.
Self-reported shopping habits are a reflection of many factors, including country of origin, tenure in the U.S., language preference, acculturation and media consumption. Making a general reference to “Hispanics” can be myopic, whether we’re addressing retail shopping for groceries, electronics or financial services. With the “Hispanic” market comprised of consumers from 22 countries around the world, cultural needs can vary as dramatically as the different socio-political-economic reasons that Hispanics emigrated to the U.S. to begin with. Given the importance of building relationships with Latino consumers, in order to earn their trust and confidence, PRIOR to asking for their business, will have a direct impact on the Hispanic shopper’s first impression of the retailer. The first impression drives the shopping experience, which then determines “self-reporting responses,” not to mention word-of-mouth “advertising.” I have not yet read the Unilever study, but as previously mentioned, I don’t expect surprises in the content…only in what retailers actually put into practice with the required discipline, investment and commitment to serving the Latino community.