As Hispanic Population Grows, So Do Challenges for Marketers: 5 Insights

The statistics don’t lie. Hispanics will become 20% of the U.S. population by 2020. This demographic is younger (average age 27 versus 41 for the general market) and they currently have purchasing power of more than $1 trillion dollars. The growth rate for Hispanics outpaces any other group in the U.S. In 2010, 25% of all children born in America were born to Latina mothers. The Latina shopper is a smart, knowledgeable shopper—and it has become even more critical to understand her specific need-states as her shopping behavior is markedly different than the general market shopper.

Here are five insights to better understand this shopper:

1. Multiple Retail Destinations

Whereas one-stop shopping for convenience and time savings is common among the non-Hispanic shopper, the Latina shopper prefers to shop a minimum of five channels regardless of size of household or household income. There is no compromise when it comes to what is best for her family within the family budget. She seeks specific retail destinations for certain categories because of value, variety, selection, mix and a retail environment where she is comfortable shopping.

2. Geographic Proximity to Home

The Latina shopper prefers to shop within a five-mile radius of home, with store routes on the way to other retail destinations. She may be willing to drive beyond the five-mile radius for the monthly stock-up shopping trip, but the weekly fill-in shopping excursions follow predictable, convenient travel routes on the way to or from the furthest destination. This is neighborhood shopping and neighborhood marketing influenced by peers, family and friends.

3. Definition of Family

Shopping for the “family” has a different context for the Latina shopper than the general market shopper. Family is not limited to one’s immediate family of father, mother and children. Shopping for the family includes grandmother, grandfather, an uncle, aunt, or cousins, and often grandchildren. For certain categories, such as breakfast cereal or personal care products, family needs are diverse and require the right variety, selection and mix at the right price. Latina shoppers are deal prone, but they have become more promotion sensitive over the past five years. Across all levels of acculturation, the following promotional tactics have consistently shown growth and sales lifts:

Gift with purchase
Sampling/demos
Handout coupons adjacent to displays
BOGO (buy one, get one free) or BOTO (buy one, try one free)
Frequent Shopper Card
Experiential/Event Marketing
Word of Mouth

For many of these tactics, the driver is the definition of “family needs.”

4. The Myth of Brand Loyalty

Twenty years ago, Hispanics were considered extremely brand loyal. Whereas this may still be true today with some categories, the growth of semi-acculturated and acculturated Latina shoppers has created a new shopping behavior—a willingness to switch to private-label brands and other mainstream brands depending on the category. Marketers must be keenly aware of the sphere of acceptable brands in the eyes of savvy Latina shoppers. Brands without clearly differentiated benefits may be at risk to private label switching.

5. Pre-Store Path to Purchase

There is a perception that Latina shoppers are “technically savvy” because recent surveys show high smart-phone ownership and the pre-shop tendency to compare prices via mobile. Google reports 45% of Hispanics own smart phones compared to 34% for the general market. In 2011, Mintel reported 40% of Hispanic shoppers compare prices via mobile devices. Keep in mind that smart phones may be a more affordable substitute for laptops and smart-phone ownership does not mean we should throw apps at Latina shoppers. The high percentage of smart phone ownership is also likely to be a function of the size of the general market. From a communication and social networking perspective, the Latina shopper maximizes mobile devices; but downloaded applications are still lower than the general market for tools such as QR codes and coupon downloads to FSC.

Unquestionably, the Latina shopper is savvy, younger, seeks value for her family, and is willing to shop at multiple retail outlets for the right categories/brands. She is driven to satisfy the needs of her family and pre-shops when necessary. Marketers need to fully understand the “neighborhood factor” in her selection of stores and retail channels to earn more of the $1 trillion dollars of Hispanic buying power.

Terry Mangano is executive vice president at Catapult Marketing. She is a shopper marketing expert and specializes in Tier 2 retailers. She can be reached at, [email protected].