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Winter 2005 Viva los Compradores

Each year, thousands of immigrants from Latin America come in search of their American dream. They arrive from more than 20 countries in the Caribbean and Central and South America—Argentina, Costa Rica, Cuba, the Dominican Republic, Panama, Peru, Puerto Rico and all the others, as well as Mexico and even Spain; and they settle in every state in the union.

And they’ll continue to come. They bring the language, foodways, strong family traditions and cultural customs that are an integral part of their lives and still passed down from generation to generation. Estimated to grow to 43.7 million in 2010 and 55.2 million by 2020, they are already the largest minority group in the country. “While the US population as a whole grew 2.5 percent between April 2000—the date of the last census—and July 2002, the number of Hispanics increased by 9.8 percent,” according to a comprehensive report on the US Hispanic market by Packaged Facts (a division of

Although many people dismiss Hispanics as not having significant disposable income, the purchasing power of this group is estimated at $700 billion. “It’s a common misconception that Hispanic consumers are poor, [that] they don’t have any money,” says David Perez, CEO of Latin Force, a market research firm in New York, and chairman of Cultural Access Group. “Even if a guy looks like he’s a laborer, he’s got a lot of money to spend on things he really wants.”

Plus, many in the Hispanic category no longer fit the “recent immigrant” profile. They are second- and third-generation who speak excellent English, hold white-collar jobs, and live in middle-class neighborhoods, yet retain strong ties to the language, culture, values and traditions of their grandparents’ home country. “They’re an incredibly powerful group with huge spending power,” says Esther Novak, founder and president of Vanguard Communications in New Jersey. “Their incomes are growing, they have more money to spend, and they’re spending a higher proportion of it than the general market [spends],” she says.

But is it accurate to put all Spanish-speakers into one group labeled “Hispanic?” No. Retailers and marketers can’t assume that the needs of all Hispanic consumers are identical just because they speak the same language.

Hispanics identify with their respective homelands. The three largest groups are Mexican, Cuban and Puerto Rican; the others come from a number of other countries, and they want this acknowledged. According to RetailWire, the country of origin is very important to them, and for that reason, Spanish-speaking people here don’t refer to themselves as generic “Hispanic.” They identify themselves by their home country: “I’m Guatemalan,” or “We’re Puerto Rican.”

“It would be convenient to lump them together, but things that appeal to a Mexican-American can be completely different from what appeals to a Cuban-American,” says Denise Blaya, supervisor of Multicultural Marketing at Ketchum PR (New York City). The biggest mistake marketers make is to rely on and perpetuate stereotypes: for example, assuming someone from any Latin-American background prefers super-spicy food and very bright colors, and doesn’t speak English well. Not so. Consider the mellow flavors of Cuba’s ropa vieja, or the paella handed down from Spain to the New World; and the rich, subtle colors of Peruvian and Colombian textiles, just to name a few of countless examples.

That said, this diverse consumer group does share certain characteristics, which retailers can use to identify the best approach for reaching this lucrative market. The first and most important task is to demonstrate that you care about the customer’s specific culture and heritage. That means recognizing the general similarities, understanding that there are specific differences—that one size (or color or flavor) doesn’t fit all Spanish-speaking consumers—and meeting their buying needs accordingly.

La familia

In the Hispanic community, life revolves around home and family, even in second- and third-generation households that are more assimilated into American culture. Much of Hispanic culture centers on food and entertainment. In a survey by Gourmet Retailer magazine, they don’t eat out as much as “Americans” do. They prefer to cook and eat dinner at home more than five nights a week on average; seven nights a week for 53 percent of respondents. Most family celebrations (holidays, etc.) take place at home, as well.

Many Hispanics live in multigenerational households: grandparents, parents and children under one roof. According to the Packaged Facts report, family is the number-one priority for all Hispanic consumers. They marry and have children earlier than any other ethnic group; they have larger families; and they provide for and offer everything in their power to their children. Rochelle Newman-Carrasco, president and co-founder of Enlace Communications (Los Angeles), explains that in the Hispanic value system, the main focus is family: family will always come before career and individual success. “It’s not that non-Hispanics aren’t interested in family values,” she says. “But for Hispanic consumers, the extended family is a very important part of all sorts of decision-making processes.” Regardless of their country of origin, approximately three out of four strongly agree that relatives are more important than friends.

imageHispanic families spend a lot of time together, not just on special occasions but every day. For them, going shopping is a fun, social event. “Among Spanish-speaking households, shopping is a family event—an outing scheduled for a leisurely Sunday,” says a recent AC Nielsen Homescan Panel survey. They plan the day and look forward to it, even if it’s just a trip to Kmart or the grocery store. “There’s a very strong family tradition of going shopping together,” says Perez. “Shopping—even grocery shopping—is a social outing, [and] never viewed as a chore.” Novak says these family shopping trips often include not just mom, dad and the kids but also extended family members (aunts, uncles, cousins, grandparents), especially among recent immigrant families. Because Hispanic consumers have larger families, they spend more money than average in many categories of consumer products, especially food, things for the home, and baby products.

Hispanic mothers enjoy shopping with their kids, and while they’re there, first-generation Hispanic mothers (and fathers) tend to indulge their kids—though they don’t always want to—much more than their white American counterparts do. In one survey, Hispanic parents who speak mainly or only Spanish at home were more likely to say they don’t like the kids asking for gifts on impulse, “but [those parents] find it difficult to resist their kids’ requests or postpone purchases until special occasions.”

In any event, Novak advises retailers “to make sure your store is a family-friendly place, with plenty of space to create the ‘You’re welcome to browse’ ambience… Sell goods that appeal to a range of ages—the diversity of products is very important.” This way, grandma—abuela—might choose something for herself and, at the same time, pick out a gift for her nephew’s upcoming birthday. Furthermore, special promotions and in-store displays for family-oriented holidays such as Mother’s Day, Valentine’s Day or birthdays are a perfect opportunity to tap into this market.

Home is where the heart is, and for the family-oriented Hispanic culture, owning a home “is a milestone… a mark of accomplishment and a place for family and financial stability,” writes Alex Lopez Negrete, president of Lopez Negrete Communications (Houston). “More than 50 percent of Hispanic middle-class heads of household own, or are in the process of [owning], or are considering buying their home.” And as any home-owner knows, a house also creates buying opportunities.

It goes without saying that in terms of product categories, this market buys what everyone else does, and for most of the same reasons—baby things, toys, apparel and accessories, home and garden, auto, entertainment, and all the rest. Here’s a look at a few of those categories, and some of the cultural forces that drive spending.

Bebé, bebé

Hispanics in America have the highest birth rates of all ethnic groups. There’s a huge baby boom of Hispanic children in the US, and because “being a mother is reported to be the greatest life achievement by [Hispanic] moms and their family members” (, these new mothers are perhaps the most dynamic segment of the Hispanic consumer market.

Baby-related buying is big, and it starts early. Because this culture exults in motherhood, the expectant mom buys items that tell the world she’s expecting—like form-fitting, even belly-baring maternity fashions—more than non-Hispanic women do. Then comes baby. “We spend a tremendous amount of money on baby products and baby gifts because kids are the center of the household,” says Perez. New mothers and their immediate and extended families buy baby gifts, soaps and lotions, toys and apparel for the new arrival—and not just during babyhood. According to Market, Hispanic consumers spend nearly twice the amount non-Hispanic households spend for apparel for children under age 2: $141 vs. $76; and substantially more on apparel for kids 2-15: $104 vs. $86 for boys, $172 vs. $109 for girls.

Hispanic mothers like to interact with other mothers to exchange ideas and advice. And although most of them don’t have to struggle with language barriers or financial difficulties, as many of their own mothers did, they nonetheless have the difficult task of passing on family and cultural heritage to kids who grow up surrounded by everything American, says Cathy Areu, editor-in-chief of Catalina magazine. “Second-generation Latina women not only have to retain the culture and language from a country where they weren’t born, but also pass it on to their kids the best way they can,” she says. Marketing efforts that bring these women together—events that feature contests, product demonstrations, etc.—not only draw them to the retailer but also allow for building a personal connection, which is crucially important to Hispanics as a consumer group.

I feel pretty

Hispanic men and women are extremely fashion-conscious. They know the trends and work at looking their best. Perez says that this, too, is part of the culture: “In Latin American countries, the clothes you wear outside the home are always the best you have, clean and pressed. It’s formality, almost a tradition.”

imageAnd Hispanics spend more than average on beauty products and cosmetics, especially lipstick: “They can have a million different shades and are always trying something new,” he says. According to Packaged Facts, “Hispanic women have the highest propensity to use foundation makeup, mascara and eye shadow/liner/eyebrow pencil. They are more likely than black and Asian-American women to use hair spray, and more likely than any other group of women to use hair-coloring products and styling creams and gels.” Men and women also spend more on cologne and perfume. The Hispanic Opinion Tracker 2002 study commissioned by People Magazine reports that 87 percent of Hispanic women wear fragrance (vs. 79 percent of non-Hispanic women), and almost half buy fragrance three or more times a year (vs. 38 percent).

They also value jewelry as a sign of status and wealth. An expensive watch or diamond earrings are seen as investments, not just dazzle, and are passed from husband to wife, wife to daughter, and then to the daughter’s daughter.

And don’t overlook Hispanic teens, the fastest growing group within the market. Everything you know about selling to teens in general will also apply to these kids, as well, although sometimes with a Latin beat.

The radio is “always on” in Hispanic households, says Perez. It should come as no surprise that music is integral to culture in Hispanic communities, and local Spanish stations serve not only as an outlet for Latin music, but also as a companion in the home (and car) for all ages, and the best source of community news. “We [Hispanics] spend a lot of time listening to music, and a lot of money on music and entertainment,” says Novak. In a Recording Industry Association of America (RIAA) survey, listening to music matters to 91 percent of Hispanic consumers: it’s “extremely important” to 50 percent, and “fairly important” to 41 percent. Plus, “the study delivered empirical evidence that young Hispanics have a voracious appetite for a variety of genres,” which it says gives retailers “an incredible opportunity.” The RIAA reports that Hispanic consumers buy all or most of their music at independent stores, “mom-and-pops,” and at the mall.

Even for retailers who have no interest in selling music, this group’s love of the radio makes local Spanish stations a terrific vehicle for communicating with and sending marketing messages—special sales, grand openings, etc.—to Hispanic consumers.

Doing business

According to Novak, retailers who want to reach the Hispanic community need to send a clear message that they’ll hear as: “Ah! You know I’m Hispanic and you want me to come to your store.” But connecting with this group takes much more than translating a few flyers into Spanish or stocking colorful knick-knacks imported from Mexico or Ecuador.

As with any other consumer group, ethnic or otherwise, Hispanics prefer doing business with people they know and like, in places they feel comfortable. But with ethnic consumers, especially those who are new to this country, having a sense of “relationship” is essential. So for retailers, creating a relationship on a personal level is crucially important to selling to them. Marketing experts from Hispanic-oriented firms offer the following advice:

  • Use Spanish on signage, packaging, in-store posters, flyers, brochures, etc. Make sure the translation is right and all of the words are spelled correctly. (That goes for English, too.) “You can damage the store’s image very easily with a bad translation” and spelling mistakes, says Perez.
  • If possible, hire bi-lingual sales staff and have them speak Spanish, but only to customers who clearly want it. Young Hispanics born in the US tend to prefer English.
  • If no one on your staff speaks Spanish, just learn a few basic words and at least greet your Spanish-speaking customers in Spanish. “Chances are, many of your Hispanic customers speak perfect English, but they’ll appreciate the fact that you’re trying to acknowledge their heritage,” says Perez.
  • Is your community mostly Cuban? Dominican? Mexican? Carry authentic products from their specific countr(ies) to signal that you recognize them, want to serve them, and hope to build a relationship.
  • Connect with the community. Sponsor a school fundraiser or a neighborhood clean-up day. “Hispanics tend to be more loyal… to companies that show respect to their culture, [and] sponsor activities in their community. It creates the feeling of camaraderie,” says Blaya.
  • Get to know your shoppers, and ask which products they’d like to see in the store. According to Al McClain of RetailWire, “When [retail] managers really know their shoppers and live in the same community, they have a much better sense of what works and what doesn’t, what the needs of the community are, and what to carry and not.”
  • Avoid stereotypes about preferences.
  • Offer special-occasion promotions for birthdays, new baby, Mother’s Day, etc.
  • Be aware of holidays like Cinco de Mayo, and traditional celebrations like quinceañera, the coming-of-age party on a girl’s 15th (not “Sweet 16″) birthday.
  • Use in-store events and promotions that give parents a chance to showcase their kids, such as baby picture contests or drawing contests for older kids.
  • “Offer personalized, attentive service. Build a personal connection. Your customers want to know they’re appreciated,” says Perez.

Relationship retailing

It’s especially important for retailers to earn and maintain a good business reputation because Hispanics usually live in close-knit communities and depend on referrals to stores and services they can trust. And when they’re happy, they come back time and again—and tell others. “We’re very loyal as consumers and appreciate a personal approach and great service,” says Areu. “Once we find a good product or a great store, we stay true to it and recommend it to friends and family.” Excellent customer service and product selection can win Hispanic consumers and build a referral network of their many friends and family members. “Once you get us, you keep us,” she says.

This obviously works in reverse, though. “We really want respect but don’t necessarily get it all the time,” says Areu. If a retailer plays up stereotypes, or ignores Hispanic consumers entirely, word will spread quickly through the community. That retailer will have lost not just one potential customer but possibly dozens. Treat Hispanic customers—los compradores— with respect, and never patronize.

The point is, the US Hispanic market is a $700 million spending powerhouse—and growing. To reach them, serve them, and reap the benefits of selling to them, specialty retailers must be attuned to the culture, values and preferences of the largest minority.

Kasia Dawidowska

Dawidowska writes frequently for both trade and consumer magazines. She can be reached at .

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