Consumers' Diversity Offers Untapped Potential

5/24/2011

By Barbara Grondin Francella, Senior Editor

But retailers' employees and marketing strategies don't always reflect the new customer

Diverse communities are the fastest-growing segments of the country's consumer purchasing power, but retailers' and product makers' marketing and workforce strategies aren't effectively tapping into those consumer preferences.

As purchasing power of women, Hispanics, African Americans and the lesbian, gay, bisexual and transgender community grows — and changes in the workforce accelerate — retailers and manufacturers must find new ways to connect with their consumers, according to "The Changing Consumer and The Workforce Imperative," a new report by The Network of Executive Women, which works to advance women in the consumer products and retail industry.

The convenience store industry, with its 90,000 independent operators concentrating on hyper-local business, and its diverse store manager community, may have a leg up on creating that consumer connection. But retailers and product makers must not only have a diverse employee base, but capitalize on that diversity in their idea generation and decision making, according to the report.

"Retailers and manufacturers cannot serve the changing consumer without better understanding them. To build market share and loyalty in diverse markets, retailers must offer products, pricing, marketing and in-store experiences that appeal to these customers and meet their needs," said NEW President and CEO Joan Toth. "On a strategic level, the multiple perspectives of a fully diverse team lead to the fresh and original ideas necessary to propel a business forward."

With the best consumer insights coming from those who share a consumer's cultural experience, recruiting, retaining and advancing a diverse workforce are integral to creating a brand-consumer connection, she noted. "Consumers feel most comfortable doing business with companies whose employees mirror their communities and this leads to brand-loyal behavior."

How crucial is understanding the preferences of women, Hispanics, African Americans and the LGBT communities? Consider this: Women control $4.3 trillion of the $5.9 trillion in U.S. consumer spending, making them the largest single economic force in the world, according to the U.S. Women's Chamber of Commerce. Their buying clout is being pushed by increased rates of higher education, greater levels of entry into and advancement within the workforce and more small business ownership.

While purchasing dollars among whites increased 139 percent between 1990-2008, growth was 187 percent among African Americans and 349 percent among Hispanics, a group that is expanding in size more rapidly than other demographic groups, according to the Selig Center for Economic Growth.

At San Jose, Calif.-based Robinson Oil Corp., dba Rotten Robbie, marketing and merchandise manager Kris Kingsbury has been searching for information and advice that would help her better reach the Asian Americans living near a new store that opened adjacent to Cupertino in late March. Between 1990 and 2008, research shows, purchasing dollars grew 337 percent among Asians.

"I've been asking vendors for any data they have that would help me key in on flavors and other factors that would make a difference to the Asian community," Kingsbury said, noting she's having difficulty getting answers about Chinese-specific consumer preferences. "When we go into a community, it's important to know what it's all about. After years of talking about diversity in retail companies, we aren't there yet. I'd love to have the store employees reflect the face and language of those in the community."

For comments, please contact Barbara Grondin Francella, Senior Editor, [email protected].

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