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LAS VEGAS -- Catering to the Hispanic market is a challenge, due to its rapidly changing environment. But going after this segment can provide rich rewards to retailers, said Don Longo, editor-in-chief of Hispanic 360, Convenience Store News and Convenience Store News for the Single Store Owner magazines, during yesterday's session titled "The Hispanic Consumer: What Distributors & Manufacturers Need to Know About the Growing Latino Market," at the 2012 American Wholesale Marketers Association (AWMA) Conference & Expo.
Longo moderated a panel discussion that included Armando Martín, co-founder of XL Edge; Jim Hachtel, senior category manager for BP/ ARCO/ampm; and Alexandra Vegas, director, Multi-Cultural Business Development Organization, with Procter & Gamble Co..
Kicking off the session, Longo offered data illustrating why the Hispanic market is well worth the effort for retailers. "The Hispanic population is large and growing fast," he said. "By 2025, 15 percent of families will be multi-ethnic."
He noted that it's important to know from where that growth is coming. "The U.S. Hispanic-born population is outpacing immigration to the U.S. In 2009, for example, more than 60 percent of the Hispanic population was U.S born. And almost 90 percent of U.S. Hispanics were under the age of 18."
That debunks a myth that U.S. Hispanics primarily come from other countries, according to Longo.
Procter & Gamble's Vegas, who joked that neither she nor her family owns the city despite their last name, stated that more than one in every four births in the United States is a Hispanic. "And that number is rapidly growing," she said. "The major difference in the overall Hispanic population is that 10 years ago, growth was concentrated to five states. But that has now changed. Ten states now have large Hispanic populations and that number will continue to go up."
For those retailers not fluent in Spanish, it can be a significant challenge trying to understand the Hispanic market, Vegas continued. Fortunately, 78 percent of U.S. Hispanic consumers speak English, she said. "But a Hispanic consumer wants to know she is understood and respected. So even though she sees a product advertised in English, she also likes to see it in Spanish. You don't have to turn the whole store into Spanish. [The customer] just wants to walk in and say, 'They understand me. They get me and appreciate me as a customer.'"
When Hispanic customers do walk into a store, ensuring the right product mix for them is a significant challenge for retailers, said Martín, who has worked with Western Union, Albertson's and K-Mart. Despite the challenge, though, ethnic markets are something that "proves itself over and over" for retailers who place an emphasis on that market, he said.
"The marketplace has truly changed," said Martin. "If you want to have a sustainable business, you have to dig in and get into ethnic markets. The Hispanic shopper is the poster child for shopping. Hispanics and the entire ethnic population buy products in every category [and] are higher 'indexers' [than many other groups]. At the end of the day, it's about selling more and growing our businesses."
But for those retailers looking to enter the Hispanic market, where do you begin? Hachtel took on that question during his presentation, and explained that discovering the proper product mix is crucial. Tobacco, packaged beverages, milk, chips, salty snacks, alcohol and water, both in smaller sizes and gallon sizes, sell well to Hispanic customers at ampm stores, he pointed out. In addition, the c-store chain has been successful with a line of Hispanic snacks called Mucho Sabor, which is distributed by Core-Mark Holding Co. Inc..
"Foodservice, alcohol and salty snacks are categories you must win when it comes to Hispanic consumers," said Hachtel. "Candy is not quite as important, I've found."
According to the senior category manager, advertising is a great way to get Hispanic customers to the c-stores. IRCs [international reply coupons] written in Spanish and English have worked well, he said. This includes advertisements involving soccer teams, hefty social media efforts and billboards.
"We came up with an ad campaign called 'The Secret of Happiness,'" he said. "The secret is eating before you eat with your girlfriend. It's funny and we've received good feedback. I've done it before when I was dating. I would eat before I went out on a date because I didn't want to look like I was eating a lot when I was with a girl. We feel ads like this really work well with Hispanic customers."
Hachtel concluded his remarks by simply stating that the "Hispanic customer is more important than ever."