Marketing To America’s Hispanic Community
by Rick Rusch/Special to The Shelby Report
America’s Hispanic community is one of the greatest untapped markets ever seen. As the largest minority in the U.S., their numbers continue to grow faster than any other group. Between 2000 and 2010, the Hispanic population grew by 43 percent—four times the 9.7 percent U.S. total growth rate. In real numbers, this was an increase of 15.2 million people of Hispanic descent, accounting for more than half of the total U.S. population increase of 27.3 million during the decade.
At 50.5 million people strong, Hispanics are also one of the most optimistic groups. And while the economy has hit them hard, they remain optimistic about their future. According to a Pew Hispanic Research survey conducted in January 2012, two-thirds of Hispanics expected to improve their financial status in 2012, while just more than half in the general population said the same. If perception leads to reality, Hispanics have much to look forward to.
The emergence of Hispanics as a consumer force is gaining momentum, with a purchasing power expected to reach $1.3 trillion this year. That’s right…$1.3 trillion, right now! When comparing gross products, the Selig Foundation estimated that comparing the purchasing power of U.S. Hispanics to all the nations in the world they would be the ninth-largest country in the world.
Hispanics in the U.S. are blowing past the mainstream and other minority groups in this regard. In fact, the U.S. is seeing an increase in buying power not happening in other countries, and that is primarily because of Hispanic growth here.
Now that you are convinced the Hispanic market is noteworthy, you are likely wondering how to connect with Hispanics in your grocery business.
First, take a look at how Hispanics shop
LatinoShop, a landmark study conducted by Lapiz and Leo Burnett, identified several factors making Hispanics ideal customers for your business.
Hispanics shop with their senses
- Like to touch and feel product before buying—55 percent Hispanic vs. 38 percent non-Hispanic
- Think it’s fun to immerse themselves in the store atmosphere—36 percent Hispanic vs. 13 percent non-Hispanic
- Judge product quality by product packaging—49 percent Hispanic vs. 19 percent non-Hispanic
Social shopping, online and offline
- Use social networking sites—48 percent Hispanic vs. 31 percent non-Hispanic
- Share opinions and write reviews—36 percent Hispanic vs. 18 percent non-Hispanic
- Shop as a family and enjoy shopping with kids—45 percent Hispanic vs. 13 percent non-Hispanic
Next, what Hispanics buy, and where
Hispanic shoppers spend nearly 8 percent more on consumer packaged goods (CPG) than any other population, with particularly strong spending in the mass merchandise and club channels.
Total retail channel data for all CPG categories shows that Hispanics are just as likely to buy name brands and private label as the general market. That said, Hispanic name brand loyalty prevails in three hotbed CPG categories with significant consumption—hair care, baby products, and health and beauty—where Hispanics are more likely to buy name brands than the total market.
In hair care, Hispanic name brand buying is 43 percent higher than the total market, while private label buying levels are comparable. Hispanics spend 15 percent more on branded baby products and 10 percent more on private label, making baby care a win-win for all types of products targeting this segment. In health and beauty, Hispanics spend 10 percent more on name brands and 9 percent less on private label vs. total market.
It should come as no surprise then that Procter & Gamble is tied with Toyota for tops in online marketing share to Hispanics.
Then, consider how to connect with Hispanic consumers
While Hispanics are more likely to respond to radio ads, billboards or infomercials, they own smartphones, go online from a mobile device and use social networking sites at similar—and sometimes higher—rates than do other groups of Americans, according to analysis of three surveys by the Pew Research Center.
- Fully 86 percent of Hispanics say they own a cell phone, a share similar to that of whites (84 percent) and blacks (90 percent)
- Among adults, Hispanics are just as likely as whites or blacks to own a smartphone—49 percent vs. 46 percent and 50 percent, respectively
- Hispanic internet users are more likely than white internet users to say they go online using a mobile device—76 percent vs. 60 percent
- Among internet users, similar shares of Hispanics (68 percent), whites (66 percent) and blacks (69 percent) say they use social networking sites like Twitter and Facebook at least occasionally
Connecting online can be as simple as inserting a targeted Hispanic value-added message and impression to an existing web page in order to establish an association between your business, its products or services, and the Hispanic community. Research shows that the Hispanic consumer in particular is influenced by value-added impressions that target them specifically.
Be aware Hispanics shop differently
Evidence from many sources demonstrates that Hispanic product consumption is indeed unique in many respects, and well differentiated in comparison to other U.S. consumers.
Across all retail channels, Hispanics tend to shop less often, but spend more per trip, and are less likely to buy products at promotional prices.
Fewer shopping trips among Hispanics make it critical for retailers to develop a strong connection to become the destination of choice.
At the same time, Hispanic consumers are also more likely to make spontaneous, “impulse” decisions. This opens up more opportunities for grocers in the Hispanic marketplace, and those capitalizing on the power and scope of digital technologies will have a competitive edge. One example: creating a rich user experience that is easy to navigate and transferable to mobile devices.
Unique opportunity for grocers
Food is a cultural pillar for all groups, but perhaps even more so for Hispanics. Combine that with the fact the Hispanic consumer group is powerful and growing. And it becomes indisputable that Hispanics are a consumer force that should not be ignored by grocers.
Now is the time to tap into the Hispanic market…if you’ve not already.
Rick Rusch is CEO/partner of Denver-based Thought-Tech LLC. Thought-Tech guides clients in branding, marketing and selling. The firm specializes in strategic and innovative solutions in product development, branding, product-launch and online marketing for its clients. Thought-Tech’s MobileBrandLinx product is a custom Quick Response (QR) code service to extend branding connections to consumers. Rusch can be reached at Rick.Rusch@thought-tech.com or 303-396-5123.