Hispanic or Latino shoppers across the United States wield more than $1.2 trillion of buying power annually with projections of $1.5 trillion by 2015, according to Nielsen.
It comes as no surprise that Wal-Mart Stores plans to focus more on this powerful consumer group.
Stephen Quinn, executive vice president of marketing for Wal-Mart, told suppliers at the beginning year meeting last week in Orlando that the retailer’s marketing focus this year is in step with the merchandising goals of localization, being more competitive locally and more keenly focused on Hispanic shoppers.
Wal-Mart is already the biggest retail spender in the Hispanic market, according to Ad Age, doling out a reported $66.6 million in 2010. The retailer said last year it planned to ramp up that investment by 100% in the next year or so.
The majority of Wal-Mart's Hispanic stores are concentrated in 8 states including 171 in Texas, 126 in California, 50 in Florida, 36 in Arizona and 33 in New Mexico.
Zocalo Marketing Director Erin Conrad of Fayetteville says there is ample opportunity for suppliers of all sizes to get onboard with Wal-Mart in this multicultural initiative.
Conrad works as a consultant with suppliers to better mine the knowledge and gain understanding about how they can best tap this growing market opportunity from brand recognition and loyalty to in-store and at-the-shelf shopper insights. She works in tandem with Dallas-based Richards/Lerma Hispanic Marketing Agency.
For instance, Conrad says she recently worked with a breakfast food supplier to grasp how well their brands are recognized and perceived by the Latino shopper.
“We use a variety of techniques to access the overall market potential for our customers’ brands among Latino shoppers and then work to help them connect and grow sales within this demographic,” Conrad said.
She says understanding the cultural differences is key to unlocking a treasure chest of insights about the ever-changing Latina shopper.
Did you know that Latina moms are more apt to cook breakfast for their families during the work week than non-Hispanic households. Eggs and non-toasted bread are more commonly found on Latinos' breakfast tables than warm cereals which are more popular with non-Hispanic households, according to year long study by the NPD Group which was released early last year.
Aunt Jemima brand is now heavily marketed toward Latinos according to a case study conducted by Chicago-based Aspen Marketing.
The case study revealed that Latino mom’s had reservations about serving breakfast in a box to their families which likely kept them from trying the pancake mix. Aspen and Aunt Jemima set out to win Latinos over by staging a Promotional Pancake Breakfast Tour in top U.S. Hispanic market to give moms and kids a chance to see the convenience and taste of the boxed pancake mix brand.
The results were sweet for retailers and suppliers, according to Aspen, who reported Aunt Jemima saw a 5% sales lift among participating retail customers after the promotional breakfast campaign.
Conrad says tapping the Hispanic market is essential for businesses going forward as by 2015 one in three newborns will be Latino.
The median age of the Latino consumer is 28, almost 10 years younger than the total market age of 37 years, according to Nielsen.
Conrad says while businesses are keenly aware of the magnitude held by the Latino consumer demographic, there is still a wide disconnect about how to best garner loyalty that is closely linked to culture.
“It’s not always about best price, but best value is recognized and appreciated among this demographic. For instance, baby products are one area where brand quality could override price savings,” Conrad said.
She said Hispanics spend 14% more on routine shopping trips and 10% more on stock-up trips. Hispanic median income remains slightly lower but smartphone ownership is nearly dead even with white adults at 50% of the population, according to a study released this month by Pew Research Center.
When it comes to owning a smartphone, going online from a mobile device and using social networking sites, Latinos are just as connected as other Americans, according to the Pew Research.
Conrad says in many Latino households the smartphone is the computer and families will invest in several less expensive devises rather a conventional desktops and pricey laptops. She adds that 56% of Hispanics shop with their mobile devices, versus 33% of Non-Hispanics. Some 43% of Hispanics shop with a tablet compared to 25% Non-Hispanics.
Research conducted last year by LatinoShop found several differences in Latino consumer behaviors compared to other consumers.
Hispanics shop with their senses
55% Hispanics vs. 38% Non-Hispanics – like to touch and feel a product
49% Hispanics vs. 19% Non-Hispanics – judge product quality by product packaging
41% Hispanics vs. 18% Non-Hispanics – follow the trends
31% Hispanics vs. 14% Non-Hispanics – like to try new products first
30% Hispanics vs. 13% Non-Hispanics – like to be first to share with friends
Social shopping (online and offline)
37% Hispanics vs. 17% Non-Hispanics – reach out to friends and family
36% Hispanics vs. 18% Non-Hispanics – share opinions and write reviews
48% Hispanics vs. 31% Non-Hispanics – use social networking sites
Conrad says Latinos are out-spending total market households by 40% or better in several product categories: Hair care, cooking oil, baby food, diapers, grooming aids and women’s fragrances. Other important categories are breakfast cereals, automotive, electronics, carbonated beverages and beer.
“Wal-Mart clearly recognizes the importance of the Latino demographic. Many of their top performing stores are deemed Hispanic. Originally there were 550 Walmart Stores grouped as Hispanic, that number grew to 800 this year, including Store No. 1 in Rogers,” Conrad said.
Suppliers vying for important shelf space will need to woo this growing shopper demographic in the years to come, and Conrad says there’s no time like the present to put a comprehensive plan into action.