The Supply Side: Hispanics provide growth potential for suppliers, retailers

In the highly competitive retail climate suppliers and retailers that reach out to Latina shoppers stand to reap huge rewards among this growing demographic, according to Enedina Vega, publisher of Meredith Hispanic Media.

Vega shared internal research about the Latina demographic to a room full of suppliers at the Bentonville Chamber of Commerce WalStreet Partnership Series held Monday (Jan. 27).

With retailers facing stagnant sales growth, one of the more immediate opportunities on the horizon involves capturing market share from the burgeoning Hispanic population. The U.S. Census estimates by 2050, Hispanics will number 133 million — 30% of the U.S. population. By 2015, Hispanics will control $1.5 trillion in annual spending.

Vega said Latino shoppers already number 52 million and their annual incomes are growing at a healthy clip. She outlined three target areas where suppliers and retailers could wield influence with this savvy demographic: beauty; baby registry; and food.

“The Latinos are a younger demographic, two of three are under the age of 35. One in six Americans is a child, but one in four Hispanics is a child,” Vega said, an indication that the Latino families are growing a faster rate than the overall U.S. population.

BEAUTY SALES
Vega said Latina shoppers spend more on beauty products — cosmetics, perfumes and  haircare — than the general population. She said they are typically brand loyal, but also outlined a couple of opportunities for suppliers who want get marketshare in this category.

“It’s important that suppliers understand the way Latinas view seasonal changes with their make-up, color pallets as well as fragrances,” Vega said.

They also have distinctly different needs for day and night, two other opportunities that suppliers have to market specific products.

While celebrity endorsements do go over well with the Latina demographic, Vega said they also appreciate simplification which is why the Clinique brand — and it’s three step process — resonates so well with Latinas.

The appeal of in-store displays matter to the Latina demographic, which is another opportunity for suppliers to work with big box retailers to present cosmetics in more of a department store setting.

But perhaps the most important aspect of marketing beauty products to Latina shoppers is a combination of coupons and free samples.

“They love buy-and-try propositions, and suppliers who furnish those opportunities along with educational tips will likely be rewarded,” Vega said.

BABY REGISTRY
One in four children born today are Hispanic, and that will become one in three by 2030, so marketing to Latina moms offers huge upside potential, according to Meredith’s research.

Vega said 37% of the Latina shoppers surveyed by Meredith with kids under 2 years old, used a baby registry, and 54% said they plan to use one. One interesting dynamic to the Latino’s use of baby registries is that they tend to register much later — third trimester or even post natal. This is uncharacteristic of the general population who tends to register in the first trimester.

Vega said this delayed reaction is cultural in nature as many Latino households don’t wish to bring baby items into the home before the baby arrives because it can be considered bad luck.

“Knowing this, and marketing to the Latina mom with a congratulations note early in the pregnancy but then continuing to speak to her through the third trimester is key,” she added.

Sears, Wal-Mart, Target and Baby’s R Us ranked as top tier physical store retailers where Latina moms said they typically register. However, Walmart.com fell to the bottom tier against diapers.com, Amazon and other purely online players. Vega said this is an opportunity for Walmart.com and its suppliers to reach out to the Latina moms with products, coupons and free samples late in the third trimester and even post natal.

FOOD CATEGORIES
Meredith research found that 45% of Hispanics are shopping for food at supercenters like Wal-Mart. Also, 70% said they shopped at Wal-Mart, with a higher average basket purchase given the larger families.

Vega said Latina shoppers appreciate value and read the food labels just like the general population. She said 50% are purchasing organic products. Pasta, whole-wheat versions, brown rice and whole grain options are very much in demand by Latina shoppers, according to Vega.

“The Latina consumer is still cooking dinner and she appreciates and uses recipes. This is a departure from previous generations who didn’t write specific instructions, rather using a little of this and a pinch of that,” Vega said.

She said Latina shoppers are very much “foodies” and 58% of their food purchases center around pleasing children and husband. They shop for all types of products, seeking to diversify away from traditional ethnic foods more often, favoring items like Greek yogurt, energy drinks, bottled water, ice cream, fruit  and soy milk.

One other important marketing element for the Latina shopper is reaching her in Spanish, while she is likely bilingual, Vega said there is are retrospective movement in place among Latino families.

“They will speak English almost exclusively until they have children of their own, then we see them reverting to speaking Spanish at home, trying to ensure that future generations don’t lose the language. Latina moms see that as something they can give their children, an advantage for them. More so than perhaps any other large ethnic group in the U.S., the Hispanics are holding on to their culture longer,” Vega said.