Still Making Sense: Timeless Ethnic Merchandising Best Practices

Jun 09, 2004

By Terry Soto

The immense buying power of the nation’s Hispanic consumers will energize the U.S. consumer market as never before. Selig Center projections reveal that this group alone controlled about $653 billion in spending power in 2003.

The Hispanic population grew by 58 percent between 1990 and 2000. Close to 11 million more Hispanics are expected to arrive in the U.S. within the next ten years, and by 2020, about one in five Americans will be of Hispanic descent. Want your store to get a piece of the action? You’ll fail if your thinking ends with a marketing presence only during Hispanic holidays or by making a few cosmetic changes to your shelf set and calling it an “ethnic section.”

However, an approach that takes into account how Hispanics shop and use different products — and which food products complement each other in Hispanic cultures — will get you noticed. Among Hispanics, these behaviors differ from “mainstream America.”

Five “best practices” should drive your approach. They’re outlined in the study Grow with America – Best Practices in Ethnic Merchandising and Marketing sponsored
by the Coca Cola Retailing Research Council. (Click here to download the study results – PDF format.)

1. Learn about Hispanic consumers so you can serve them better.

2. Define your Hispanic merchandising “look” and organize to executive it.

3. Tailor your offering to appeal to your target consumers.

4. Make your brand authentic to connect with the Hispanic community.

5. Develop a marketing plan that communicates value at all “touchpoints.”

In this discussion, we’ll start by addressing Best Practice #1. (Other points to be covered in future discussions.)

Learn about your ethnic consumers to serve them better

First, it is critical that you have complete buy-in from everyone on the team, and that goes all the way up to senior management. Then start by requiring that your team commit to learning about cultural differences in cultural backgrounds. Consider that the body of 32.5 million people in the United States who are generically lumped under “Hispanic” come from richly diversified subcultures representing more than 20 countries in Central and South America, the Caribbean and Spain.

Marketing successfully to them can be complex, but easily implemented if you do your homework. They will see right through any superficial attempt to target them.

You can learn a lot about Hispanic buying preferences by going into their homes. Watch how they cook. Their food-preparation preferences give you clues about their decision-making process in the store. For example, Hispanics cook extensively from scratch. They tend to buy few canned, frozen or fully or partially cooked foods.

When they do buy, they choose products they can use as ingredients, but which don’t alter the traditional flavor of a dish. To many Hispanics, convenience is defined very differently than among mainstream consumers; it means using a blender rather than grinding by hand to make a sauce versus opening a can or jar to make a sauce.

When merchandising to Hispanics or any other immigrant group, think of the family. Hispanics often have large families, and they consider shopping a family experience where kids assist in the buying decisions and are specifically responsible for introducing many unfamiliar products into the household. Some manufacturers create advertising strategies that focus on kid appeal, but which are targeted to moms in Spanish so they will be more receptive to new products when facing a request from their children at the shelf.

Scott McClelland, Chief Merchandising Officer, H.E. Butt Grocery Co., San Antonio, makes this observation: “The ethnic community is bringing in large, young families. There’s a whole new opportunity out there.” HEB is considered among the leading “mainstream” grocers in courting the Hispanic community.

Food preparation and ingredients also vary widely by country among Hispanics. In Mexico, popular foods include flavored tomato sauces, tangy tomatillo salsas and rich chili bases used for flavoring. Hispanics from Central America and the Caribbean favor sweet-and-salty flavor combinations using chocolate, cinnamon and chili and/or citric combinations that incorporate fruits.

Best practice retailers visit ethnic supermarkets and other retailers where Hispanics shop. Pay attention to the products on the shelf and how they’re cross-merchandised and packaged to appeal to both Hispanics and non-Hispanics. Often, a product can appear in two or more sections in the store with other products that reflect preparation styles of these different consumer segments.

Talk to Hispanic consumers who frequent these stores. Purchase products that they buy for packaging analysis among your team members. Then, share your fact-finding among your manufacturers and distributors and make time to walk your stores with them so you find optimal ethnic merchandising solutions that will work for you and your customers.

Moderator’s Comment: What are other specific ways retailers can learn about their ethnic customers’ food needs and
preferences? What challenges do they face internally in trying to do so and how can they overcome them?

Terry Soto – Moderator

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