Bernanke: U.S. is engine of growth
Ben Bernanke with Rite Aid chairman and CEO, and new NACDS chairman, John Standley, pictured above
BOSTON — The slow and uneven pace of recovery following the 2008 economic collapse notwithstanding, the United States remains a fundamentally strong engine of economic growth, Ben Bernanke, former Federal Reserve chairman, said on Sunday during the business session.
Bernanke defended the Fed’s decision-making during and after the subprime mortgage and banking debacle six years ago, and called for increased legislative action to empower the Fed and “make sure this doesn’t
“We remain enormously powerful from a technological standpoint,” Bernanke said, with “strong, free markets,” a tradition of entrepreneurship and a young, diverse and growing work force.
Reaching Hispanic consumer critical for growth
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.”
Hispanic surge bodes well for retail pharmacy
The U.S. Hispanic population is projected to reach 128.8 million by 2060, or more than 30% of the U.S. population. This could bode especially well for purveyors of health products and services in the pharmacy setting. According to PricewaterhouseCoopers’ Health Research Institute, perhaps more than any other consumer group, Hispanics are cost-conscious, mobile savvy and do not necessarily seek health care within the traditional $2.8 trillion U.S. healthcare system.
In fact, Hispanics are less likely than other consumers to use a doctor as their primary caregiver when facing a non-emergency condition (66% vs. 76%). The key attribute that makes the Hispanic demographic so critical to retail pharmacy operators is the fact that Hispanic health consumers are open to means of care that are an alternative to seeing a doctor. This means they’re not only shopping the OTC aisles more often, but Hispanic consumers also are more likely to frequent retail clinics.
According to the HRI Hispanic consumer survey, 57% of Hispanic consumers have utilized a retail clinic at least once, vs. 45% of non-Hispanics. “They may postpone or delay going to see a physician, but they may be open to seeking alternatives or alternative sources of care, whether it’s at a retail clinic or at a pharmacy,” said Frank Lemmon, strategy and operations principal for PricewaterhouseCoopers. There could be a number of factors driving that decision, Lemmon said, such as the value associated with the healthcare visit or the credence associated with pharmacy. “Because pharmacies are so prevalent in many Latin American countries, there’s more trust in the pharmacy and the pharmacist to treat their condition than there is in any sort of medical institution.”
On average, cost is most important to Hispanics when it comes to care, while quality is most important for non-Hispanics. Approximately 46% of Hispanics vs. 35% of non-Hispanics consider cost most important; 53% of non-Hispanics vs. 42% of Hispanics consider quality most important.
Hispanics also are more likely with download coupons to a phone than other consumers (25% compared with 17%). PwC suggested this might be an opportunity for pharmaceutical companies and retail pharmacies to improve medication adherence by making prescription discounts accessible by mobile devices.
Overall, more Hispanics than non-Hispanics use social media, mobile apps and Internet searches to find information about their medical care, and Hispanics are more likely to be influenced by the information when making decisions about care.
According to PwC research, nearly one-fifth of Hispanics said they are already using an app or the Internet to make medical appointments. Another 31% said they would be very willing to. “For many of them, mobile is their only access to the Internet, so it’s the way they’re using technology to connect [to] social groups,” Lemmon said.