Hispanic Retail 360: Retail Industry Needs to Embrace Diversity Inside and Out

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Hispanic Retail 360: Retail Industry Needs to Embrace Diversity Inside and Out

By Melissa Kress, Convenience Store News - 08/11/2011

SAN DIEGO -- In the span of one year -- from 2009 to 2010 -- Hispanics accounted for 47 percent of U.S. consumer spending growth. It's that data from Geoscape that brought about 600 attendees to the Hispanic Retail 360 Summit in San Diego this week.

However, to be successful in this rapidly growing market, retailers and manufacturers need to pull back the curtain and look beyond the numbers, according to presenters at the three-day event, which kicked off yesterday.

"The business case is so important, but it's not all in the data," said Armando Martin, president of XL Edge and columnist for Progressive Grocer. "Hispanics and non-Hispanics need to come together and ask how can we help our leaders understand the changes in America."

He further explained that as long as the United States shares a border with Mexico, the business community will have opportunities and all segments of that business community need to align themselves, regardless of competition.

According to Cesar Melgoza, founder and CEO of Geoscape, Latinos are the new "growth majority" and make up 56 percent of the population growth since 2000, adding that the number is only going to increase. Currently, he said, Hispanics total more than 50 million people in the United States.

The changing face of the population is reflected in what is considered "mainstream." In 1960, mainstream was The Beach Boys, "Ozzie & Harriet," hamburgers and hot dogs, and only 4 percent of players in Major League Baseball were minorities. Now, Melgoza explained, mainstream is Shakira, "Modern Family," tacos and burritos, and 28 percent of players swinging a bat in the majors are Hispanic. In addition, in 1960, Hispanics were "a fringe opportunity" but in 2011, they make up the majority of spending growth.

Coupled with the fact that the Hispanic population represents 12 percent of all U.S. households, there is real potential for retailers and manufacturers to make their mark in the community. In order to do that, companies need to embrace diversity from the inside out.

Over the past 20 to 30 years, companies have moved from diversity as a way to mitigate legal liability toward the end goal of diversity as a strategic advantage, Melgoza said.

A key to seizing that advantage is having a multicultural workforce, explained Alison Paul, vice chairman, U.S. retail leader and principal at Deloitte Consulting LLP. "Consumer insights come from those who share the consumer's cultural experience," she said.

According to a joint study by Deloitte and the Network of Executive Women, Hispanic buying power stood at $212 billion in 1990 and is projected to jump 513 percent by 2014 to $1.3 trillion. "It is no longer about compliance or EEOC (Equal Employment Opportunity Commission)," Paul said. "It is about an integrated approach to the potential you have with a diverse workforce."

Dian Emerson, vice president, diversity and inclusion at Safeway, agreed, explaining the company is focused on making sure its employees reflect the community it serves. "From a retailer's point of view, if you don't have a diverse workforce you have a lot of work to do," she said. "You need to ask yourself why."

The retailer-vendor partnership is also a key to success. As Annie Zipfel, director, Target owned brands, Target Stores, explained, vendors need to let retailers now if they have the right products on the shelves.

Marie Quintana, senior vice president, multicultural sales, PepsiCo, echoed the importance of the retailer-vendor partnership and the diversity of a company's workforce, but added the road to success in the Hispanic retail arena does not have to be a difficult one.

"Sometimes we make it harder than it needs to be," she told attendees. "It's not a niche market; it is an integrated strategy."