Seeing Opportunity in Hispanic Shopper Behavior
By David Morse and Bill Bishop
During our presentation on Monday at the FMI Conference, we introduced some of the results from a new research study of 1,650 Hispanic shoppers, co-sponsored by ADVO, FMI and
New American Dimensions. The study focused on the shopping habits, advertising preferences, and media consumption of English- and Spanish-speaking Hispanics in the top ten markets
across the U.S. Here are some of the highlights.
- Hispanic shoppers represent a serious opportunity at retail.
- When it comes to the Hispanic shopper, time favors the supermarket.
- Advertising recall is highest when the ads are bilingual.
- A segmentation of Hispanic shoppers based on shopping behavior and acculturation generates some actionable insights.
Compared to non-Hispanics, Hispanics spend more on food — almost $130 a week, versus $91 a week — and they shop for groceries more often. They also spend a much higher percentage
of their total food dollars at non-supermarkets — over 30% versus 18% for all U.S. shoppers — such as butcher shops, bakeries, bodegas, convenience stores, drug stores, specialty
shops and warehouses.
As Hispanics acculturate, e.g., become more comfortable shopping in a mainstream setting, they buy more of their food at supermarkets. They also go to different supermarkets.
In half of the markets studied, the supermarket of choice for less acculturated Hispanics was a store with an Hispanic format. By contrast, more acculturated Hispanics preferred
more mainline supermarkets in nine out of the ten market areas studied.
What is it that the less acculturated consumers are looking for from their supermarkets? Nearly 90% of less acculturated Hispanics said that having Spanish speaking employees
was a very important factor in deciding where to shop, double the number of acculturated Hispanics. Having Spanish language signage, bilingual packaging and Hispanic products
were all rated as very important by about 80% of less acculturated shoppers.
As expected, the less acculturated consumers receive most of their advertising in Spanish, and the more acculturated households receive more of their advertising in English.
Neither “pure” approach yields the high level of ad recall as when the ads are bilingual.
Flyers mailed directly to the home generated by far the highest recall among advertising media, particularly in the grocery category. Sixty-five percent of respondents recalled
grocery ads received in the mail, compared to 40% recall of ads on television, 30% recall of circulars and flyers in the newspaper.
The study divided Hispanic shoppers into four segments based on a combination of demographic, attitudinal and shopping behavior factors. Here are some key takeaways for each
of the segments.
- “Loyalists,” i.e., those most brand loyal, represent 20% of the shoppers. Typically these are the least acculturated shoppers who are looking for familiar brands and
are much less willing to try new ones, even when they’re on sale.
- “Budgeters” represent 25% and are also less acculturated. They typically operate under strict budgets and are very responsive to specials.
- “Impulsives” are the largest segment, representing 30% of Hispanic shoppers. They typically have been in the U.S. longer but still have a strong Hispanic identity.
They enjoy food shopping and use food to pass along their Hispanic heritage to their children.
- “Inquirers” make up 25% of Hispanic consumers and are the most acculturated on many different measures. These shoppers take a “more educated approach” to shopping.
They look carefully at the ads and deals, and are less concerned about traditional Hispanic products. They’re also the most likely to shop across different channels.
Moderator’s Comment: How can grocers win the primary business of Hispanics in their communities?
This begins with knowing where the Hispanic customers in your market are in terms of adapting to life in the U.S., i.e., acculturation. This is easy to
say, but a little harder to do.
Store loyalty is high for less acculturated Hispanics so, for these customers, you have to either give them an Hispanic format store that’s comfortable
to shop, or prove to them that a big, relatively impersonal supermarket deserves to be their store of choice. Which is more realistic?
The needs of Hispanic shoppers seem to be a little harder to interpret because of the question of acculturation. The open issue is, what’s the best way
to efficiently identify and translate Hispanic consumer insights to the store? –
David Morse and Bill
Bishop – Moderators