Ethnic Assortment and Merchandising Still Present Significant Challenges

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May 19, 2004
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By Terry Soto

Supermarkets are still challenged with creating store environments that connect with ethnic consumers. Most chains’ environments still have a sterile feel, regardless of location
and customer base. My experience has taught me that, when it comes to retail, people develop relationships with people, not supermarket brands. And yet, in chain service departments,
such as service meat, bakery and produce, where ethnic consumers typically connect with store personnel and where relationships are formed, bilingual signage and staffing are
still lacking.

Contrary to what some might imagine, to create an environment of comfort, it isn’t necessary to change the look of a store by painting the walls bright colors or by hanging piñatas
from the ceiling. However, it is important to implement the service and social experience aspects of grocery shopping. These things are desired by all customers, and these customers
are no exception. The reality is that, beyond the assortment, ethnic groups continue to go to ethnic stores because they can communicate with fellow shoppers and the store personnel.
This is what makes them feel like they belong.

The recent ADVO, FMI and New American Dimensions study cited in this space a couple of weeks ago indicated that, as Hispanics acculturate, they start shopping in chain supermarkets.
On the other hand, it also says that they continue to have an appreciation for bilingual signage and employees; so again, the need to create an environment that connects with
this consumer exists even after they’ve learned English.

It is important to recognize that, among immigrants, language serves a functional purpose; it allows them to navigate the mainstream environment. However, native culture is still
at the heart of these consumers, so the languages they speak and the language with which they are comfortable may be two different things. A colleague used to say, “It is sometimes
about the language, but it is always about the culture.”

The big improvement opportunity for retailers is in learning about their ethnic consumers. Too many retailers rely on their vendors to fill in the knowledge gap, or they relegate
the duty to an “ethnic” buyer who is expected to “know it all” by virtue of being ethnic (a concept which is comparable to saying that, because one is Anglo, one will innately
know about the various segments that make up the mainstream shopper base). In the case of Hispanics, being Puerto Rican or Cuban does not make one an expert on the varied food
preferences, brands and cooking behaviors of Mexicans or Central Americans or South Americans. The process for learning about one’s customers still requires the rigor and discipline
of research and analysis.

Moderator’s Comment: How do retailers best face the huge challenge of effectively serving their evolving ethnic customer
base?

All of this goes back to corporate culture. Unless retail organizations take time to define the values that will drive how they will serve their evolving
customer base, they will continue to run ethnic initiatives tactically rather than a strategically and will continue to be challenged in their ability to deliver a shopping experience
and product assortments that are relevant and authentic.

Terry Soto – Moderator

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