Continuing the Tradition

Debby Garbato, Stagnito Business Information

10/25/2015

Retailers today recognize the value of marketing in ways that appeal not just to a short list of well-recognized ethnic groups, but to a diverse range of cultural and minority perspectives.

In August, the inaugural Multicultural Retail 360 Summit made its debut in Anaheim, Calif., as specialists in African-American and Asian marketing joined the conference’s cadre of Hispanic experts. The event was previously known as the Hispanic Retail 360 Summit.

Held Aug. 12–15, the 11th annual summit was presented by Stagnito Business Information, publisher of Convenience Store News and other leading retail business magazines. Attendance exceeded 450 retailers, suppliers and other marketers that target multicultural consumers.

Presenting companies included such market leaders as Nielsen, Walmart, Walgreens, the National Football League (NFL), Brookshire’s and Kroger. More than 50 speakers discussed subjects ranging from cultural relevancy beyond language, to the importance of independent grocers gaining a better understanding of black consumers.

Topics were so popular that, by the morning of Aug. 13, the conference had become a leading trend topic in Southern California on social media site Twitter.

FROM FÚTBOL TO FOOTBALL

The growth and significance of the multicultural market were underscored by the NFL, which discussed its commitment to growing the Latino fan base. Already, 26 million Hispanics follow the sport and 63 percent of all Latinos like football more than other sports, said Marissa Fernandez, director of fan strategy and marketing, and the summit’s keynote speaker. These consumers represent 14.2 percent of the 188 million NFL fans nationwide.

The NFL is pairing culturally relevant messages with its all-American image. One Spanish-language ad shows kids playing football; a voiceover discusses their hopes for the future. “The NFL represents both the American culture and the American dream,” said Fernandez.

The NFL is also looking to increase Spanish TV football viewership by building Hispanic fans’ understanding of the game. On ESPN Deportes, it provides both in-depth game analysis for veteran fans and “how to” explanations for more novice viewers.

To reach Hispanic women, the NFL ran ads featuring Dominican-born actress Diane Ramirez in Vogue and People en Español during 2014. This year’s ads star Dascha Polanco, another Dominican actress. At the grassroots level, the NFL is targeting underdeveloped markets with youth participation programs designed to foster lifetime enjoyment of football.

BIG NAMES IN RETAIL

On the retailer end, a panel of executives from top chains talked about hindrances to multicultural initiatives, the importance of companywide cooperation, and how diversity can generate additional revenue.

Rona Fourté, Walgreens’ director of supplier diversity, discussed partnering with black entrepreneur Vera Moore to launch a line of African-American cosmetics. The assortment is offered by 35 Duane Reade stores in New York and via Walgreens.com. “It’s a true example of Walgreens’ commitment to diversity,” Fourté said.

Walgreens also launched a bilingual freestanding insert when it began selling Hispanic groceries, said Martha Garnica, manager of multicultural marketing. The dossier is published at the beginning of the month when low-income customers receive government benefits.

Mike Byron, senior director of supplier diversity at Walmart, said the retailer now offers 3,000 products and services from diverse suppliers. In 2011, it committed to sourcing $25 billion from women-owned companies over the next five years. Byron said Walmart has already exceeded that goal by about $1 billion. “We want to imbed supplier diversity into our overall strategic directive. Everyone in charge of negating or awarding a contract touches my office.”

Kroger executives utilize the input of nine associate resource groups, said Reuben Schaffer, chief diversity officer. Each is comprised of people from a specific ethnic or other group. “They tell us what it’s like to be Asian or gay,” said Schaffer. “Diversity is about the mix; inclusion is making it work. With us, it’s in to be out.”

BROOKSHIRE’S NEW STRATEGY

Three executives from Tyler, Texas-based Brookshire’s outlined the grocer’s cross-departmental, multicultural initiative that has increased sales by almost 30 percent over three years.

Efforts involved identifying and serving customers in areas with heavy concentrations of Hispanics or African-Americans. Demographic targets are further segmented by income, lifestyle, acculturation and shopping habits. To do this, the company has relied on extensive research, outside experts and changes that touch everything from products and packaging to staffing and training.

For example, Brookshire’s removed sweet Mexican bread from its packaging and placed it in self-serve cases. And it began offering beans in bulk.

“It’s not just certain products they want, but the way they shop for them,” said Ivette Zavarce, multicultural marketing coordinator for the grocery chain.

Outside of supermarkets, Sean Bunner, vice president of new business development at the Home Shopping Network (HSN), explained how the multi-billion interactive, multichannel retailer is using a Latina host, Ecuadorian Amy Bravo, to help gain Hispanics’ trust.

Bravo came to the United States in 2000 at age 18, spoke only Spanish and was working in a sandwich shop. After being discovered by HSN, she worked as a model before becoming one of the show’s most popular hosts.

“Being a host is hard,” said Bunner. “Most people who become hosts have been with HSN for years. But Amy did so well in six months that she got the attention of executive management — not just as a Latina, but as a host. It’s hard to gain the trust of Hispanics, but once you do, they stay.”

HSN is already well entrenched in the African-American market with cosmetic supplier Carol’s Daughter and other brands that strongly resonate with blacks.

THIRSTING FOR DATA

The Multicultural Retail 360 Summit also featured an impressive roster of research experts.

Eddie Yoon, principal of The Cambridge Group, a wholly owned subsidiary of Nielsen, and Guy Garcia, president of new mainstream initiatives at EthniFacts LLC, presented Nielsen data that uncovered some radical changes and nuances in U.S. demographics:

381 different languages are spoken in the U.S.
One in six newlywed couples is interracial
10,000 baby boomers turn 65 every day
2012 was the first year that mortality exceeded births among the non-Hispanic, U.S.-born white population
Most of the white population’s growth is coming from white immigrants; Asian immigration is also high
One out of six blacks in the U.S. is an immigrant

Yoon also talked about how demographics do not necessarily predict demand. With Korean TV dramas, for example, just 15 percent of viewers are Asian. And despite blacks’ love of football, more African-Americans watched “Empire” than the Super Bowl. “Advertisers could have spent a lot less and reached more blacks [by using “Empire”],” said Yoon.

New data developments also came from the Center for Multicultural Science. By analyzing a first-time National Grocers Association study on independent supermarkets, the Center determined 25 percent of sales ($32 billion) in this $131-billion channel are generated by retailers with a multicultural focus. (The study involved chains with sales of $2 million-plus).

This information demonstrates how vast the multicultural market has become. According to Isabel Valdés, chairperson of the Center, the U.S. Hispanic market is as large as “one of the fifth or sixth largest economies in the world.”

Anheuser-Busch InBev SA and PepsiCo Inc. were title sponsors of the 2015 Multicultural Retail 360 Summit. McIIhenny Co., maker of Tabasco Sauce, sponsored the Cultural Immersion Tour, a first-day conference highlight (see tour recap on page 142).

Hispanic & Asian Retailers Shine in Immersion Tour

Attendees of the Multicultural Retail 360 Summit had the opportunity to sample Thai beer, moon cake, fresh tortillas and other ethnic specialties during the conference’s annual Cultural Immersion Tour on Aug. 12. This year, the Cultural Immersion Tour’s emphasis was on Hispanic and Asian retailers in the highly diverse Los Angeles/Anaheim market.

The goal was to provide guests with a firsthand experience of how these chains market to multicultural consumers. Unified Grocers, a major distributor to independent retail chains, helped organize the event. The tour was sponsored by McIIhenny Co., maker of Tabasco Sauce.

Stops on the tour included:

SUPER KING, Anaheim

This $2-million six-store chain is small in store count but heavy in foot traffic. Super King is one of the highest volume supermarket chains in Southern California. The store visited on the tour was so busy that customers were lined up outside, waiting to enter.

The retailer emphasizes its fresh departments, with many customers loading their shopping carts with several pounds of produce along with large packages of meat. Offal is particularly popular, including such ethnic-centric items as beef lips, tendons and feet — not to mention the usual tripe and pig tongues. Shoppers’ close ties to their home countries were also reflected in self-serve bulk product displays of nuts and other dry foods, as well as spices sold by the bag.

SUPERIOR SUPERMARKETS, Anaheim

The company that opened Southern California’s first warehouse-style store in 1981 today operates 44 locations. The chain’s stores offer a more spacious, modern environment that emphasizes products for Hispanics of various acculturation levels.

Pre-cut fruit, for example, appeals to second- and third-generation Latinos, while the homemade tortillas that greet customers are embraced by Hispanics of multiple acculturation levels. The same is true of Hatch chilis, a coveted produce item with just a six-week season.

Unlike most supermarkets, Superior does not update department locations and adjacencies every few years. The company found this confuses its customers who do not speak English fluently. Superior has also done away with bilingual signage, whose font size was too small and whose overall appearance was cluttered and further confused shoppers.

CURACAO, Anaheim

This retailer specializes in electronics, furniture and fashion. Categories are aimed at Hispanic consumers, particularly South Americans. The retailer’s true claim to fame, however, is its special services, most notably a credit program that targets people who have no traditional credit history. Hence, most items are high ticket, with lower-priced products serving as complementary add-ons.

The company offers money transfers and international ordering and delivery as well. The latter serves remote parts of Latin America in any way it needs to.

“We used to have donkeys on our P&L [profit and loss statement] that allowed us to deliver appliances to remote parts of the world,” noted Mike Azarkman, director of Curacao’s eBusiness Group.

99 RANCH MARKETS, Anaheim

This grocery chain serves various Asian cultures, with the Anaheim location drawing a heavy Filipino clientele, said Teresa Leung, coordinator of marketing and public relations.

This was evidenced by a 25-linear foot-plus assortment of head fish on ice. This display was complemented by an extensive assortment of frozen seafood, including shrimp rolls, marinated milk fish and mushroom squid balls. Tanks of live catfish and crabs, along with Manila clams, were also part of this store’s huge seafood statement.

Other traditional foods included moon cakes, which commemorate the Moon Festival. Each cake contains an egg yolk to represent the full moon. Steamed buns containing chicken, pork, vegetables and red beans also commanded significant space.

99 Ranch was the first Asian format in Southern California to operate as a full-service supermarket. Today, it still offers the largest selection of meat and produce in the 37 stores it operates in California as well as in Nevada, Washington and Texas.