Latino Marketing Experts

Retailers and marketers share insights on serving the needs of the growing Latino market.

LAS VEGAS — With more than $1 trillion in spending power up for grabs, retailers and marketers didn't let the current poor economy dissuade them from attending this year's Hispanic Retail Summit, held here Aug. 9 to 11.

For the more than 350 attendees, the Hispanic Retail 360 Summit offered an opportunity to tour four stores that target Latino customers, hear major retailers like Best Buy, Ace Hardware, and SuperValu discuss the development of their Hispanic initiatives, and participate in smaller concurrent sessions featuring leading authors, consultants and researchers on multicultural markets.

The Summit also featured a Product Showcase room with 22 exhibitors of products and services for the Latino market.

On the first day of the conference, attendees viewed four leading Hispanic-focused retailers in the Las Vegas market—grocer La Bonita, Mariana's Supermarket, electronics retailer Best Buy and value grocer Food 4 Less, a Kroger chain. Led by the Summit's Master of Ceremonies Armando Martin, managing partner of XLEdge, his partner, Manny Fields, and Barbara Soto of api plus, the tour-goers saw two authentic Latino grocers, an example of a major grocery chain (Kroger) that does a great job of matching its footprint to the local community, and a giant superstore chain (Best Buy) staffed with young, bright and enthusiastic young people steeped in the language and culture of their community.

BEST BUY KEYNOTE

Later that day, Best Buy employees took the stage for the keynote presentation, showing their efforts to connect with Hispanic consumers both at the store and in their homes. Teresa Iglesias-Solomon, vice president, Hispanic Initiative for Best Buy, began the presentation by highlighting Best Buy's three-step process to connect with Latino customers and build relationships. "Invite Latinos into stores through efforts such as community events and involvement, and social networking; engage the customer with a passion to understand their needs; and, fulfill their experience with services such as its Geek Squad technical team and bilingual signage and store associates," said Iglesias-Solomon.

Following Best Buy, Cindy Nunez-Hasman spoke about how she came to Ace Hardware from multicultural marketing leader Sears to champion the Hispanic segment for 4.400 stores in the 85-year-old, retailer-owned cooperative. "At Ace, we started at ground zero and the biggest struggle I've had has been educating my peers," said Nunez-Hasman. She then joined with Jose Gonzalez, chief strategist of Revolution, to present the results of Ace's recent Hispanic market program in Denver where sales in Hispanic designated stores saw a 7 percent sales lift while other non-Hispanic stores reported a 5 percent decline.

The first day concluded with a $5,000 check presentation from Anheuser-Busch to the Hispanic Scholarship Fund. Jena Focht, NRS Senior Key Account Manager for Anheuser-Busch presented the check to Molly Vitorte, Director of Outreach and Non-Profit Alliances for the charity.

HISPANICS AND THE ECONOMY
Day two started by with an examination of the effects of the recession on Hispanic consumers and their shopping habits.

Because Hispanic consumers tend to carry less debt and pay for items with cash, one theory is Hispanics may actually be less affected by the downturn in the economy, said Daniel Aversano, product leadership, Nielsen Consumer Panel Services for The Nielsen Co., during the first general session of the day. Conversely, because Latino customers also are being impacted by high unemployment and the downturn in the construction industry, and generally have lower incomes than non-Hispanic customers, they could be impacted to a greater degree than the general market, he noted.

However, the picture is not that simple, Aversano explained, because the consumer is in the middle of the picture, and is influenced by the media, which has painted a gloomy picture of the economy. What really matters is consumer perceptions of the economy and their resulting actions, he said, noting purchasing power is increasing for some consumer groups, while July retail sales grew, and less jobs were lost in July than in previous months. "It's starting to look like recovery," he said.

Following the Nielsen Company presentation, which included data from Nielsen's new national Hispanic consumer panel, Terry Soto, president and CEO of about marketing solutions, inc., provided examples of how Hispanics in America were coping with the new economic conditions. While many Latinos are redefining their notion of the American dream, according to Soto, it is more important than ever for marketers to provide transparency in all their communications with this segment, which is no longer as trusting as before the economic meltdown.

SUPPLIER DIVERSITY
The next general session centered on supplier diversity, and was presented by Michael Byron, vice president of supplier diversity for grocer Supervalu.

Supplier diversity is "educating people to think differently," on how it can connect companies to its communities, he explained, noting the "true meaning of supplier diversity is how we enrich lives of people in the community, and create jobs in its areas."

If done properly, supplier diversity allows a company to differentiate its business model, along with supporting sales, gaining access to new markets and surviving the changing economy.

Indeed, the current economic crisis means that marketers have to prove their value every day, according to Reinaldo Padua, assistant vice president, Hispanic Marketing for Coca-Cola North America. In a presentation enlivened with videos showing how Coke connects on a cultural, emotional and functional level with the Hispanic consumer, Padua showed how the giant soft drink brand stays relevant to its customers even in the current economic environment.

"We're in more than 200 countries — that's more than the number of countries that belong to the United Nations," said Padua, who emphasized that Coke's success is heavily reliant on its retail partners.

One TV commercial that wowed the audience showed a blue-collar Hispanic father visiting his surgeon daughter. "It doesn't matter if you are from Cuba or Mexico, or if you're first generation or second generation, we are all looking for a better future," said Padua, after showing the "dreams" commercial. While the dreams campaign appeals to all Hispanics, Coke also developed special programs tied to World Cup soccer and Spanish-language TV telenovellas, as well. Padua noted that in 2010, Coke will take the World Cup (the first ever held in Africa) to new heights.

Following the general session programs, Hispanic Retail Excellence Awards were presented to Walmart for its Supermercado de Walmart, and Mi Pueblo Food Centers. In presenting the awards, Convenience Store News Editor-in-Chief Don Longo said the goal of the awards is to "recognize leadership of serving the wants and needs of Hispanic shoppers."

Accepting the award for Walmart was Jose Antonio Fernandez, vice president of Supermercado de Walmart, while Mi Pueblo President Juvenal Chavez accepted the award on behalf of his San Jose, Calif.-based grocery chain.

Later that afternoon, Hispanic Retail 360 attendees split up to attend several concurrent sessions on three tracks—advertising and marketing, consumer insights and retailing.

RESEARCH PRESENTATIONS
During the session titled "Seeking Growth via Hispanic Segments in a Down Economy," Cesar M. Melgoza, co-founder and president of Miami-based Geoscape, an analytics firm and sponsor of Hispanic Retail 360, showed data on the spending power of Latino customers over their lifetime.

Geoscape looks at a consumer base's "lifetime profit margin contribution," or what impact consumers can have on a company's bottom line over the course of their lifetime.

Hispanic spending power at various retail channels was the focus of the "Hispanics and the Retail Experience" concurrent session, presented by Leylha Ahuile, multicultural reports editor and senior analyst for Mintel International Group.

Latino consumers' purchasing power will reach more than $1.4 trillion next year, primarily through the group's population growth, said Ahuile, noting there are more Hispanics born in the U.S. annually than those who immigrate to the U.S. In 2008, Hispanic babies made up 24 percent of all babies born in the U.S., while 62.7 percent of Hispanics were younger than 34. And because there are more Hispanic children growing up in the U.S., they will likely learn how to speak English, receive higher education levels than previous generations and be able to earn higher incomes, she explained.

INNOVATION KEY
The final day of the Summit was highlighted by a dynamic panel of retailers discussing best practices and innovation in addressing the needs of Hispanic shoppers.

Led by business strategist Art Turock, the panel included representatives from three major regional grocery chains, an award-winning independent and the largest electronics superstore chain in the nation.

Daniel Herrera, marketing manager for North Carolina-based regional supermarket Food Lion, spoke about the retailer's five-year planning process that has resulted in undertaking a major remerchandising program turning 59 of Food Lion's 1,200 supermarkets into Hispanic stores. For something of this magnitude, "it has to be a corporate initiative," said Herrera. The company also visited Hispanic supermarkets in several markets, including Houston, Atlanta, Raleigh-Durham, N.C., Richmond, Virg., among others.

Marco Orozco, who spoke earlier in the program as part of the Best Buy keynote, pointed out that it's "all about foundation and fundamentals." And, those fundamentals start at the store level, he noted, pointing out that the idea to create an experience for Latino mothers around a cultural relevant holiday like Mother's Day. "That was an initiative that was instigated by employees," said Orozco.

Jose Amaya, director of diversity at Midwest-based Hy-Vee supermarkets, observed that he was the only academic on the panel. "I was told to go out and get the best and the brightest to work for Hy-Vee," said the former Ohio State professor. Amaya acknowledged that like Food Lion, Hy-Vee is a late entry into Hispanic retailing. But, he said the Midwest grocer found itself in the "eye of a perfect storm" between the growth of the Latino population and the company's ability to address the health and wellness concerns of the Hispanic community.

Tracy Krogstie, marketing and promotions manager for Jewel/Osco, spoke about four ways the Chicago-area grocer brings its "Cosa Buenas a la Vuelta de la Esquina" ("Good Things are just Around the Corner") campaign to life. The first is through direct mail piece. "Hispanics actually respond well to direct mail about grand openings," said Krogstie, who noted that coupon redemption rates are much higher when the offers are positioned as a "gift" rather than a discount. Buy-one, get-one-free, 10 to $10, or 99 cents promotions are also very effective.

Juvenal Chavez, founder and president of San Jose, Calif.-based Mi Pueblo Food Center, showed a video of his stores, after which Turock asked audience members to describe what they saw. Responses included "authentic," "relevant," "spacious," "friendly," "home," "colorful," "clean."

Chavez, who earlier in the conference accepted a 2009 Hispanic Retail Excellence Award, said, "At Mi Pueblo, we make you feel at home."

The 2009 Hispanic Retail 360 Summit was hosted by Convenience Store News, Progressive Grocer and Nielsen Business Media. Presenting sponsor Coca-Cola was joined by other sponsors including Geoscape, Café Bustelo, Anheuser-Busch and Western Union. For more on the Hispanic Retail 360 Summit, go to www.hispanicretail360.com.