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The Supply Side: Unlocking opportunity, winning Hispanic favor

story by Kim Souza

ksouza@thecitywire.com

Editor’s note: The Supply Side section of The City Wire focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by The City Wire and sponsored by Propak Logistics.

Hispanic and 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. That economic power is why Wal-Mart, Home Depot and most major retailers invest in marketing efforts to woo this important demographic.

Experts said consumer packaged goods (CPG) companies and other retail suppliers are just starting to scratch the surface with targeted marketing efforts to Hispanics. McKinsey Group reports that retail spending of Hispanic consumers will nearly double over the next 10 years and account for almost one-fifth of total retail spending.

Hispanics spend money differently from other consumers. For example, they spend at least one and a half times more on children’s apparel, footwear, and fresh food than non-Hispanic consumers do. 

Enedina Vega, publisher of Meredith Hispanic Media, recently said during a Bentonville-Bella Vista Chamber of Commerce meeting that Latino shoppers already number 52 million and their annual incomes are growing at a healthy clip. She outlined three target areas where suppliers and retailers could wield influence with this savvy demographic: beauty; baby registry; and food.

“The Latinos are a younger demographic, two of three are under the age of 35. One in six Americans is a child, but one in four Hispanics is a child,” Vega said, an indication that the Latino families are growing a faster rate than the overall U.S. population.

EXPERT INSIGHTS
Jason Long, CEO of Shift Marketing Group, said retailers understand the importance of reaching Hispanic shoppers and have required bilingual signage in their stores for several years. He said Home Depot publishes a trade magazine geared to Hispanic construction and trades professionals.

He said CocaCola is a brand nailing it with efforts to reach Hispanics, citing the recent SuperBowl ad that featured “America The Beautiful” sung in different languages. A recent survey by the Hispanic local search company YaSabe found it was the favorite commercial of their online Hispanic audience — more than one-third said it was the ad they liked the most. That was more than 20 points above their second-favorite commercial.

Unilever reached out to Hispanics on Facebook in recent years with its ViveMejor page and has garnered nearly 311,000 likes as it continues the conversation, promoting new products as well as offering recipes and other advice for Latino consumers. The site is maintained in Spanish. Unilever also maintains a Twitter page for ViveMejor with 33,500 followers.

Clinique also is a brand that resonates well with the Latina demographic, according to Vega. She said Clinique has a simple three-step process that busy Latina consumers appreciate. Latina shoppers spend more on beauty products such as cosmetics, perfumes and haircare products than the general population, Vega added.

Erin Conrad, senior manager of client services at Collective Bias in Bentonville, works with suppliers and retailers on strategies designed to engage Hispanic consumers. She said CPG companies must connect with the Latina shopper before he or she ever gets to the retail store.

She said connecting through culture and values are the best way to grab the attention of this diverse demographic. Conrad said connecting in Spanish is not as important as it once was given that 50% of Latino shoppers were born in the U.S. and are bilingual. She said connecting with Latinos in the right medium is far more important than the language.

“Hispanics are early adopters in mobile and digital media. They are more social while shopping as they share opinions via Twitter, Facebook and other social platforms. Because they are more apt to share their own opinions to a trusted circle of friends, they also pay more credence to the opinions of their friends and family,” Conrad said.

Three out of four Hispanic shoppers use technology as part of their shopping trip, Conrad said.

"Hispanic shoppers spend significantly more per stock-up shopping trip, $128 versus the average U.S. consumers’ $117. We also found that Hispanics shop more often than the general population," Conrad noted from a study by Univision and AMG Strategic Advisors.

That study also found 40% of Hispanics say they buy higher quality non-grocery products that they know will last them longer versus 27% of total U.S. shoppers.

CPG OPPORTUNITY
Conrad said Hispanic incomes are growing faster than the general population as Latina women are entering the workforce and those with bilingual speaking skills are finding higher paying jobs and employment opportunity in professional roles. For this reason, Conrad said there is opportunity to push the demographic into higher-priced brands. Culturally, Conrad said Latino shoppers naturally gravitate to the brand name they are best able to afford and still provide the best quality possible for the family. She said there is a notion common in the culture translated as, “What is cheap always ends up as more expensive.”

Food companies have huge opportunities if they can win Latino market share because Conrad said they eat at home more often, have bigger families and spend more on groceries than the non-Hispanic consumers. Conrad said unlocking cultural clues have also provided companies with growth opportunities when they marketed toward Hispanics.

Last year, Conrad told The City Wire that Latina moms are more apt to cook dinner for their families during the work week. 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 in 2012.

Aunt Jemima brand heavily marketed toward Latinos, according to the 2012 case study conducted by Chicago-based Aspen Marketing. The 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 children 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.

SOCIALLY CONNECTED
A recent study by Unilever and its media planning agency Mindshare looked at four months of social media data use gleaned from 42 million users and 70 million shares. This research found Hispanic consumers are twice as likely to share content or click on shared content than Americans in general.

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The research also showed Hispanic consumers share via social media five times more often than non-Hispanic users, and content shared by Hispanic consumers is 35% more likely to be clicked on than content shared by the non-Hispanic population. Hispanic consumers were also twice as likely to purchase the kinds of products they share or like online. Non-Hispanic consumers were 1.3 times as likely to make a purchase compared to what they share online.

The categories most talked about by Hispanics in this study were health food, personal care, beverages, sweets and snack categories. Arts and entertainment, family and sports were the most searched content categories, followed by politics and government, food and drink, health and fitness, style and beauty, technology, home and gardens, business, travel and leisure, education and automotive.  

The study found that nearly 20% of Hispanic consumers consume mobile content (6.4% iPhone, 8.1% tablet and 5.1% Android), versus 13.6% of non-Hispanic consumers.

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