With the Hispanic population in the United States hovering around 55 million and estimates predicting that they’ll soon make up nearly one-third of the population, it’s becoming imperative to reach this group of consumers.
(For the full report, including charts, click here.)
In an effort to offer more information into this key demographic, IRI Worldwide recently hosted the webinar, “Winning with the Hispanic Consumer Today.” Joy Joseph, IRI’s global analytics and consulting principal, and Andy Hasselwander, VP product development and professional services for Latinum Network, walked through potential strategies for businesses looking to expand their Hispanic reach.
Joseph emphasized the importance of the Hispanic demographic, not just because of its size, but also because of its purchasing power and makeup. As a whole, Hispanics are about 10 years younger, on average, than many other demographics, and already possess a purchasing power of about $1 trillion. That purchasing power will only grow as the population gets older, he said.
In fact, Joseph said that companies with higher brand development index in largely Hispanic markets did better and grew faster overall.
“If you have a portion of your consumers that are increasing in size, increasing also in their earning power, … as you increase the proportion of those consumers, you’re going to see the total brand lift up as well,” he said.
Using data from a 2012 Ipsos diversity markets report, Joseph said that the place to target Hispanic consumers is in places where they shop more on average than any other demographics. Some 53% percent of Hispanic shoppers prefer drug stores, compared with 46% of the general market. There’s a similar difference between the general market and Hispanics when it comes to stores like Target and Walmart, where 74% prefer to shop, compared with 61% among other shoppers.
The difference between Hispanic buyers and the general market is most apparent when it comes to dollar stores, where nearly twice as many Hispanics prefer to shop compared with other shoppers — 56% compared with 30%. They also out-index the general market when it comes to warehouse clubs like Costco, as well as convenience stores.
With these types of businesses, the key — according to Hasselwander — is to eschew the traditional view of a total market approach as focusing on the general market, with ethnic groups as satellites.
“I think if you asked certain people, they would say total market just means not doing multicultural,” Hasselwander said. “It’s actually the opposite of that. It means putting multicultural in the driver’s seat from the beginning.”
One way to do this is to design marketing and social media campaigns on the assumption that consumers are bilingual.
“Don’t just rely on English,” Hasselwander said. “You’ve got to be open to all available consumers to drive your products. If you cut off parts of the U.S. consumer base and over-segment and over-target, you can get to the point where you don’t have any growth engine anymore. “
These will make a bigger impact on a group that’s already open to suggestion. According to a 2012 Mintel study, the biggest thing that influences Hispanic shoppers’ choices are recommendations by family and friends, followed by advertising. Also important are recommendations from friends on social media.
Other advice Joseph and Hasselwander gave was to invest in multicultural markets. The return on investment is typically worth the upfront cost. Finally, interest in diversity has to come from the inside.
“The chief diversity officer is not nice to have; it’s actually a strategic imperative,” Hasselwander said. “This won’t work if the organization doesn’t look at all like the customers it’s trying to reach.”