Hispanic Retail News

Going All In

Hispanic 360 Summit highlights need for companywide commitment to serve the Latino customer.

By Linda Lisanti

Success in Hispanic retailing comes down to commitment-it's as simple as that.
"Sometimes, marketing to Hispanics is a last-minute effort. Sometimes, we get too segmented. Hispanic marketing can't be done by just one individual or department," said Armando Martin, director of multicultural marketing for SuperValu/Albertsons, where tortilla sales rival bread sales. "It has to be a companywide initiative."

Martin's insights were part of the third annual Hispanic Retail 360 Summit, which took place this summer (2007) in Dallas. The conference, produced by the Nielsen Business Media Retail Group, parent company to Convenience Store News, touched on such topics as Hispanic shopping behavior, Internet retailing, event planning and sports marketing. Other highlights included a store tour of area retailers serving the Hispanic market, and a live focus group with Latino shoppers.

More than 500 attendees gathered during the three-day event to hear from Latino market experts, and top retailer and supplier companies who have made the commitment to serve the needs of Hispanic shoppers and are reaping the benefits.

Consumer electronics retailer Best Buy Co. illustrated its total commitment from store level to corporate office. Kal Patel, executive vice president of emerging business and strategy, said Best Buy has embarked on a journey to answer the question, "How do you invite some people without disinviting others?" Finding the right response has not been easy or quick, but the task is necessary to stay relevant today, Patel told attendees.

Capturing the business of Hispanic shoppers for Best Buy has meant first gaining their trust. Through research, the retailer determined that Latinos want to find someone in the store they can connect with and trust to guide them to the right purchase. So, the company is focused on mirroring its stores' internal and external demographics. This has required bringing in more Spanish-speaking employees and identifying those who are multilingual on their name tags. One Best Buy store has gone so far as to designate a staff member as Hispanic liaison and cross-train that individual in every department.

"The fabric of America is changing," Patel said of the company"s efforts to better serve its Hispanic shoppers. "And that means the fabric of our company must change."

For retailers, taking the right approach to connect with Hispanic consumers requires understanding the "customers' DNA," according to JCPenney executives.

JCPenney has been focused on the Latino shopper for more than a decade, and its ultimate goal is to become "the department store of choice for Latinas and Latinos," said Manny Fernandez, manager of multicultural marketing for the retailer. To attain that status among females, the company debuted marketing campaigns around this year's Academy Awards and the Latin equivalent, Premio Lo Nuestro. The two campaigns were similar, but also addressed the differences between the general and Hispanic markets.

Through research, JCPenney found that Hispanic women seek inspiration to build a better life and find moments in the day that prove they are achieving their dreams, hence the campaign's slogan, "Cada dia Cuenta," or "Every Day Counts," according to Fernandez. But women in the general market seek inspiration to build a better life and find moments in the day that make it better than the one before, so the slogan JCPenney chose to reach them is "Every Day Matters," he explained.

Both campaigns have been well-received and are yielding successful results, he said.

Success through Simplicity
Although Latinos often straddle two worlds, Hispanic retailing doesn't have to be complicated. In virtually every culture, individuals strive to follow the so-called golden rule of "do unto others as you would have them do unto you," which means simply, treat others as you would like to be treated.

"We need to treat our [Hispanic] customers the same way we would like to be treated if we were to relocate to another place," Jeff Morris, president and CEO of Alon USA ' owner of 7-Eleven licensee Southwest Convenience Stores, ' said in a presentation he titled "Back to Basics." "Sometimes, we tend to forget the obvious."

Morris explained how his chain addresses the differences among Hispanic consumers based on acculturation. With first generation, he said it's critical to provide a variety of products from their home countries, and for clerks to speak Spanish, rather than English, as their first language. In comparison, stores serving second and third generations must supply a broader array of iconic American products, while also offering some imported products and an employee who can communicate in the customers' first language.

"If we attempt to treat first, second and third generations the same, we will miss the mark," Morris noted. "The basics of marketing to the Latino ' or any culture ' are based in the fundamental recognition that there are no silver bullets, and one size does not fit all."

Simplicity was a topic that Jose Espinoza, senior brand manager, Hispanic customer market for Coca-Cola North America, touched upon in his session as well. "Coke's secret formula is to keep it simple, but avoid being simplistic," he said.

As an example of this formula in action, Espinoza cited Coke's latest version of its Full Throttle energy drink, Blue Demon, named after the legendary Mexican wrestler. The new drink, targeted at Hispanic males, ages 19 to 45, is the first Coke product with fully bilingual packaging, including labeling and nutritional information.

Coke developed two slogans for the product: "Energy for the Every Day Fight" for the Hispanic market and "16 Ounces of Tijuana" for the general market.

Like Coke, Anheuser-Busch Inc. (A-B) also markets separately to Hispanics; however, the company does consider Latinos in its general-market initiatives as well. "There will always be a need to market in Spanish," noted Henry Dominguez, A-B's vice president of Latino marketing, "but we also keep Latinos in mind when creating our English language advertisements, and do English language spots specifically for Latinos."

A-B's main objective in Latino marketing is to "be where the consumers are and associate ourselves with things that interest them," Dominguez added. An example is the brewer's sponsorship of Mexican National Soccer.

Another part of the company's strategy is community relations, specifically to create partnerships that enrich the Latino community and enhance A-B's reputation.A-B is the longest-standing sponsor of the Hispanic Scholarship Fund, which has awarded $22 million and 18,000 scholarships to date.

No Investment, No Return
The bottom line is "don't expect a return if you're not investing in Hispanic," said Robert Ortiz, vice president of sales and marketing for Bashas' Food City, a 62-store Hispanic grocery format and the winner of the Summit's 2007 Hispanic Retail Excellence Award.

Food City caters to Latinos by offering them the products they know and love. Ortiz said by treating imported products as mainstream instead of specialties ' as Food City does ' it unlocks their power. "Think about if you were relocated to a different country. Wouldn't you look for the products you know?" he said.

To connect with its customers on a deeper level as well, the award-winning grocer gets involved in its communities in grassroots ways, such as hosting local soccer tournaments and holding Parking Lot Fiestas at a different Food City store every Sunday.