With a purchasing power expected to reach an unprecedented $1.2 trillion dollars in 2012, and a population already surpassing 50 million, Hispanics are a fast rising consumer force in the United States and perhaps our greatest hope for a sustained economic recovery. In fact, Hispanic growth is fueling an increase in buying power in this country that is yet to be seen in other economies. Put another way, Hispanics are achieving a status as super-consumers that is making other minority groups and even the mainstream consumer look anemic.
Given this knowledge, it's surprising that so few retailers have put much effort into learning about the Hispanic consumer and how to serve their needs. One very prominent exception is Walmart, which has been attracting increasing numbers of Hispanics to their stores by integrating them into all facets of its business, including merchandising, marketing, operations, and community outreach programs. One campaign called "The Best Heritage is a Good Education" addressed the need for higher learning while acknowledging the importance of culture - displaying a genuine understanding of what's important to the community.
Walmart has even challenged its manufacturing partners to provide products specifically designed for Hispanic consumers and their needs. Is it any wonder that Hispanics make up a significant portion of Walmart's U.S. customer base, and that the country's largest retailer stands to capture the lion's share of the fastest growing consumer group?
According to a recent study of Consumer Packaged Goods (CPG) companies and retailers, Walmart was one of seven companies named "best in class" at driving revenue growth through their leadership in the Hispanic market. This is compelling further evidence that business growth and success will come to those most adept at serving the Hispanic market.
Brick and mortar retailers must also acknowledge and act on another important fact: Hispanic online and mobile usage is among the highest of any group and continues to increase faster than the general marketplace. This has led to huge numbers of online shoppers; 62% of Hispanic Internet users have made purchases online.
Research indicates that online consumers, and Hispanics in particular, are influenced by value-added impressions that target them specifically. We need only look at Amazon to see how successful this approach has been with the general population. It is a model that other retailers can follow as they extend their online efforts to target and serve the Hispanic market. As the fastest adopters of new technology, Hispanic consumers provide myriad opportunities to reach them online, via mobile devices, and through social media.
Francisco Bethencourt, a Fortune 500 Multicultural Global Executive and expert at leveraging market trends, consumer insights and brand ideals to grow businesses, explains the paradigm shift in retail branding this way: "Consumers increasingly trust more what their friends have to say about a brand they experienced than what a big corporation communicates in advertising. Advertising effectiveness is then greatly shaped by the social media pulse. Historically, consumer networks have served to spread the word about positives or negatives of a brand. Today, technologies have enabled consumers to be more effective in how they express their opinions. Consumers tend to buy your product not on what you sell, but more on why you do it and how you do it. Emotional engagement is a key component of the game of gaining consumers."
This is why retailers who are first to capitalize on the power and scope of digital technologies - creating a rich user experience that is easy to navigate and transferable to mobile devices - will have a competitive edge. This last point is especially relevant, as Hispanics are projected to spend $17.6B on mobile devices in 2012, and are more likely to research products, compare prices, and make purchases with their phones than other groups.
Mr. Bethencourt also points out that some companies, such as Coca-Cola and PepsiCo in the soft drink industry, are counting on mobile technology to enable the next big wave in selling to Hispanics and other demographic groups, location-based marketing. This will give companies the ability to communicate their brand in the right context, at the right time, to the right group of people. Making your brand more relevant locally is especially important to retailers, who can use location based marketing to drive more business to their physical store locations.
Location based marketing will also fuel the discussion of your brand online. Hispanics are social media enthusiasts, eager to engage with your brand on sites such as Facebook and Twitter, and share their thoughts and opinions with others in the community. Young Hispanics in particular want to change the conversation and seek an online experience that empowers their voice and cultural authenticity.
On the back end, Big Data will play an increasingly important role the more the Hispanic market grows. Data integration and management strategies must be built and/or tweaked to measure Hispanic buying power and trends in their behavior as consumers so that companies can allocate resources properly and measure their return on investment.
As Hispanics rise as consumers, it's inevitable that there will be "tension points" between the community and major retailers who are used to doing things their way. As one recent blog respondent put it: "I have experienced this first hand. Corporations aren't very comfortable with "serving" minorities, however, there are millions of dollars spent on advertising and targeting these minorities each year...from American corporations."
With so much on the line, we must make sure this money is being well spent. A large and diverse market, Hispanics expect and deserve companies they do business with to understand and address their unique needs. The objective now should be to answer those needs by looking through the Hispanic lens to improve communication and build relationships with these super-consumers.
Do you have a long-term strategy, starting with your top leaders, to attract Hispanic consumers who can trust and build your brand? Do you show support for the community and advocate for their issues? Is your organization making the right investments, including bilingual/bi-cultural leaders, at all levels of the company?
Learn more at www.CenterforHispanicLeadership.com or follow us on Twitter @HispanicTalent