Building Incremental Retail Sales and Profits with the Hispanic Market

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Building Incremental Retail Sales and Profits with the Hispanic Market

By Ray Garza

Earlier this year, I was invited to what was a very lovely business luncheon with some very bright business executives from a very prominent retail organization.

The reason for the invitation was that this retail company not only wanted to ask for some marketing advice about the Hispanic market, it also wanted to share some very personal information about its organization specifically as it pertained to its Hispanic customers or better yet, as it pertained to its lack of Hispanic customers.

What was the personal information the company wanted to share? It was having some very difficult financial struggles as a retailer in what became key Hispanic neighborhoods, and realized not only was the company not attracting any significant number of Hispanics to patronize its stores, it wasn't developing new customers at all.

Knowing a little bit about this retailer's presence in the marketplace, and doing a study after our meeting, I came back to the company to tell it the reason it didn't have much of a Hispanic customer base is because the company didn't do what was the very obvious, which was to:

Welcome Them!

The reason it wasn't generating new customers (specifically, the mainstream market) was because this market was not growing, and unlike the Hispanic shopper, consumers were buying from other sources -- online, organic farms and boutique shops.

This retailer, like most companies that have not yet taken the Hispanic market seriously, never seem to have a budget to sincerely, strategically and successfully target this market. And if they desire to, always seem to use the same words, "We don't have much of a budget." To which I say: "Then don't spend any of it as you can't tap a market this viable if you don't invest the necessary funds to successfully win this customer."

My rule of thumb for marketing to the Hispanic market is as follows:

If the Hispanic market in your city is 50 percent of the population, then allocate 50 percent of your marketing budget towards it. If it's 30 percent of the market, then allocate 30 percent of your marketing budget towards it, and so forth.

If that seems a little high, try increasing it to a reputable amount vs. the average 3 percent to 5 percent budget most retailers use to try and tap a market that is not only continuing to be the fastest-growing population in our great nation, it's also a market that is pushing 50 million strong, and supported with an annual U.S. purchasing power of nearly $1 trillion! A trillion dollars a year!

My advice to the retailer, or to anyone desiring to win this very viable segment of the population and win it big, is to invest in it. In fact, I know of mainstream retail stores that have larger retail space, yet are earning millions less than what a small Hispanic retail store is doing in annual sales.

So What Is a Retailer to Do?

To increase your retail sales and profits, here's a few marketing vehicles to consider when marketing to Hispanics:

Don't just join your local Latin Chamber of Commerce, get involved by participating in luncheons, fairs, expos, festivals, educational/scholarships and other community activities! In other words, get involved with your Hispanic community.

Provide a festive environment in your store that specifically appeals to the Hispanic market in your neighborhood -- from bright colors and the smell of 'pan dulce' or baked goods, to the voiceovers and elevator music that you play in your store.

Remember, when it comes to the Hispanic market, it's families that you're catering to, so have some type of activities for the children (i.e. coloring contests, miniature amusement rides in front of your store, free cookies at the bakery counter, etc.); and don't forget about the new Hispanic shopper -- the Hispanic teen market who more and more are shopping for papa and mama!

Don't just promote the 'típico' Cinco de Mayo and Sept. 16, events, because Hispanics do celebrate other things -- like every week! Learn all the holidays (and other Hispanic/cultural celebrations) Hispanics celebrate such as Quinceaneras (Sweet 15 for girls), Bodas (weddings), barbecues/picnics, dia de los muertos (Halloween), Dia de dar gracias (Thanksiving) and Christmas events (i.e. Posadas, Three Kings Day), just to name a few.

And don't forget soccer, boxing, baseball events and American football to win your Hispanic men as customers.

Provide the right foods, beverages, candies, breads, fruits, vegetables and cuts of meats, among other things your customers want if you were to only ask them. We may be assimilated, but our bellies and minds are still cultured to crave what our abuelitas y mamas cooked for us!

Are you ready for this one? Provide pinatas for children's birthday parties -- even non-Mexicans love pinatas!

Provide bilingual signage -- especially if you want to communicate with your customers about your retail specials and other in-store promotions and services. In fact, try going into a Chinese retail store and read the packaging. Unless you speak Cantonese or Mandarin, chances are you won't buy something that you don't understand. The same goes with the Spanish-speaking consumer, so be sure to provide information and/or direction for your customers to read, understand and follow. And please be sure to be accurate with your Spanish when you translate your English copy.

Provide Hispanic customers with international transfers of money to their native lands, and check cashing services for little to no charge. In fact, if you offer free check cashing, watch what will happen in your store -- especially every pay day! You'll not only drive your regular customers, you'll begin to attract many new customers to your store because people do still talk! Have you ever heard of a loss leader? This is one marketing vehicle that you may want to consider!

Have a bilingual staff or management to communicate to your Spanish-speaking customers.

Provide attractive and colorful point of sale materials that are both descriptive and depictive. Remember, a picture is greater than a thousand words!

Advertise in local Spanish and bilingual media -- radio, newspaper, television, direct mail, transit advertising, billboards and the Internet.

Provide Spanish or bilingual circulars to promote your specials, hours of operation, other stores, addresses and most important, telephone numbers!

Sample products -- cut fruit, pour beverages in one-ounce cups and sample anything else you or your suppliers have to encourage Hispanic customers to sample, as unless consumers try something new, chances are they won't buy it unless you first give them a sample.

Coupons -- specifically, to educate your customers on how to use coupons.

If you are a mainstream retailer near or in the Hispanic neighborhoods, offer better prices than the Hispanic bodegas, supermercados and tiendas that are already catering to this market. Unfortunately, Hispanic customers in these bodegas seem to pay more for their common commodities simply because they want what they want, and if you don't follow some or all of the vehicles that I've just shared, then like the retailer who came to see me for advice, you too may need to seek consul -- before it's too late!

In closing, begin to realize it is becoming inevitable that the Hispanic market will continue to grow throughout this nation, and if you, as a retailer, do not cater to this ever-burgeoning Hispanic market, others will. It will be those retailers who will see incremental sales and profits. In fact, when a mainstream retailer does not welcome this most essential segment of the population (which have a very healthy residual value for generations to come), this market will even go to the extreme of building their own retail stores, bakeries and supermarkets in your neighborhood, and Hispanics will no longer need a mainstream retailer to shop at.

So if you don't want to find yourself asking why sales aren't growing in your store or why your Hispanic customer base is little to nil, try using the one word that truly attracts Hispanics to shop at your store:


Ray Garza is one of the pioneers in Hispanic marketing and a specialist in Hispanic advertising, marketing, media promotions, public relations and viral marketing.

For more information, e-mail [email protected] or call (702) 795-4711.