Marketing To A Multicultural Nation

As the Hispanic market continues to boom, retailers must invest now to ensure their future.

For years, the Hispanic market in the United States has been characterized as a niche market by many American retailers and suppliers. But today, that's hardly the case, considering that Latinos comprise one of out every six people living in the United States, there are more than 50 million steady Hispanic residents in America, and Hispanics account for 52 percent of the overall U.S. population growth between 2000 and 2010.

What all this adds up to is the reality that the multicultural market is now the general market.

"The definition of American culture is changing rapidly. There is no county in the U.S. today that doesn't have at least a few Hispanics [residing there]," said Cesar M. Melgoza, founder and CEO of Geoscape, a market intelligence firm based in Miami. Nevertheless, most companies are still underinvesting in marketing to this booming population, he added.

Melgoza was one of more than 40 presenters at this year's sixth annual Hispanic Retail 360 Summit, the only cross-channel conference providing retailers and suppliers with a 360-degree view of the Hispanic shopper. This year's event, held Aug. 8 through Aug. 10 at San Diego's Hyatt Regency La Jolla at Aventine, featured representatives from the world's largest retailer, the world's largest convenience store chain and the world's largest consumer electronics superstore among the Hispanic marketing experts who addressed the record crowd of more than 425 attendees.

The speed of change in demographics was cited by summit coemcee Armando Martín, principal of Lakewood, Colo.-based cultural marketing firm XL Edge and a Progressive Grocer contributor. "At the last census, it was projected that minorities would outnumber whites by the year 2050. Now, that timetable has been moved up to 2040," said Martín, who hosted the event with Graciela Eleta, SVP, brand solutions for Los Angeles-based Univision.

Martín also noted that diversity is everywhere ("the Denver public school district is a diversity market") and that audience members needed to be agents of change within their organizations.

The summit kicked off with an experiential store tour guided by experts from XL Edge, and assisted by Mark Arabo, president of the Southern California-based Neighborhood Market Association. Three buses packed with executives from around the country visited three independent grocery stores: Supermercado Murphy, Appletree Market and Northgate Market. Each showcased a unique layout, approach and retail strategy for their predominantly Latino customers.

Delivering the conference's opening address, Walmart's director of multicultural marketing, Carla Giovannetti Dodds, said that multicultural marketing has never been more complex than it is now. Yet, at the same time, it's never been more critical for marketers to break the code.

Bentonville, Ark.-based Walmart is focusing on three opportunities to strengthen its multicultural marketing: ensuring that it has a total business and market approach, fully integrating community affairs into its marketing team, and delivering a 360-degree shopping experience in its stores.

"This is the time to make sure multicultural is at the forefront of everything we do," Dodds said.

As Walmart is doing, retailers also need to take a more multidimensional approach and redefine the Hispanic shopper, said Steven Wolfe Pereira, SVP of New York-based MediaVest and managing director of MV42, who joined Dodds in delivering the opening address. Defining "Hispanic" must go beyond language, country of origin and DMA (designated market area), he noted.

This question of how to segment the Hispanic market was one touched upon by many of the conference speakers. Dr. Felipe Korzenny, director of the Center for Hispanic Marketing Communication at Florida State University in Tallahassee, said many marketers make the mistake of thinking external factors, such as language and acculturation level, are most important among these consumers. But, in fact, according to Korzenny, the most important aspects are those that reside within Latinos, such as the feeling many share of not being from either the United States or their home countries.

"If you're going to cross cultures, you need to know a lot more than you think you need to know," Korzenny advised. "We [Hispanics] look at the world in a very different way."

Keynote speaker Soledad O'Brien, acclaimed special investigations correspondent for CNN and host of the Atlanta-based network's "In America" documentaries, knows a lot about viewing the world through different lenses. She held conference attendees spellbound with her stories of growing up as a first-generation Latina, along with sharing insights gained from years of being a journalist.

O'Brien — whose mother is African-American and Cuban, and father is Australian and Irish — said there's a tendency to want to cast a wide net around a specific group of people, such as Hispanics. "Where we go wrong is aiming at stereotypes instead of reality," she noted.

One of the things O'Brien loves most about working in television news is that it allows her not only to have an impact on one individual, but also on an entire community, with the stories she chronicles. And she noted that it's not much different for retailers and marketers looking to connect with Hispanics — both are about creating an authentic experience that accurately represents that community.

"If you're looking for solutions, it's a community question," she said, stressing that authenticity comes only from truly understanding the community one is trying to reach, which is why she makes it a point to work with a diverse team of staff members at CNN.

"If we're going to do stories on Latinos, I need people who speak Spanish fluently. If we're going to do stories on the gay community, I need gay staff members. Only then can we tell the stories that accurately capture a community," O'Brien explained.

Connecting at Retail

This year's Hispanic Retail 360 Summit provided attendees with numerous real-life success stories from retailers and suppliers of how they're reaching out to Hispanic consumers.

Supermarket chain Food Lion performed market surveys and a lot of data analysis to develop a Hispanic program for its stores. The program, which started as a five-store pilot in the Raleigh-Durham, N.C., area, has since been expanded to 63 stores, according to the grocer's Hispanic marketing manager, Daniel Herrara, who also participated in the panel discussion.

Hispanic-specific programs are a must, he said, because "when you try to translate general market programs to the Hispanic market, you are viewed as non-Hispanic." For Salisbury, N.C.-based Food Lion, a division of the Delhaize Group, loyalty rewards programs tailored specifically to Latinos have done well. Past programs rewarded customers who reached a set purchase limit with phone cards or PIN numbers. Food Lion cited in-store sampling as an effective tool as well.

No matter the type of marketing, retailer speakers at Hispanic 360 said the key is to leverage the people, places and things that are most meaningful to Latino shoppers.

Soccer continues to be a passion for Hispanics, while also influencing mainstream America. Jewel-Osco spoke about the ways it used the recent 2010 FIFA World Cup to score with customers.

The grocer, a company owned by Minneapolis-based Supervalu, teamed up with several manufacturers for its World Cup promotion. The Itasca, Ill.-based chain, which operates 180 stores in Chicago, did a direct-mail piece that featured 14 vendors and offered recipients $28 in savings on the featured products. The direct-mail piece also was available in its stores, said Tracy Galindo, multicultural marketing consultant for Jewel-Osco. The grocer did a direct-mail campaign around the 2006 World Cup as well.

"You can take advantage of the passion for soccer at all levels," not just the World Cup, Galindo said, pointing out that the United States bought the most 2010 World Cup tickets of any country.

Converting Shoppers Into Buyers

Retailers aren't the only ones trying to become more relevant to Hispanic shoppers. Across almost all product categories, manufacturers are creating targeted campaigns, too.

Hispanic 360 presenting sponsor the Coca-Cola Co. said it views three groups as "key Hispanic shoppers" for its brands: moms, teens and blue-collar males. To reach these groups — and ultimately drive traffic to its retail locations — the Atlanta-based beverage company builds its marketing efforts around "connection points" such as functional/ body, emotional/mind and cultural/spirit.

When it comes to attracting Latina moms, Coca-Cola's messaging has centered predominantly on pairing its products with meal occasions. However, this year, the company decided instead to talk about pairing its products with home entertainment occasions.

Latina moms love watching telenovelas, or Spanish-language soaps, so the company created the "Coca-Cola Telenovela Club," and recruited two popular serial stars to be the club's spokespeople. The program, which is running for 12 months, incorporates a digital platform and in-store displays.

Within two months, the website generated more than 30 million impressions, and as of August, retail outlets with the displays were reporting a 22 percent increase in Coca-Cola sales.

"We believe if we get better at this, we will take advantage of brand growth," said Wallace.

Latina moms are General Mills' target as well. The company's "Que Rica Vida" program, which bundles many of its iconic American brands, strives to establish an emotional connection with Latinas, in turn making the products more relevant to them and their families, said Rodolfo Rodriguez, the Minneapolis-based company's director of multicultural marketing.

"Que Rica Vida" launched in 2007 with a direct-mail magazine printed four times a year, and has grown to include grassroots promotions, a Univision media partnership, digital efforts and other strategic partnerships. The magazine continues to be a highly successful piece, with households receiving the publication generating 10 percent higher sales, Rodriguez said.

Rather than segment by gender, Chicago-based MillerCoors focuses its initiatives on bicultural Hispanic consumers, those who "feel like a Latino, but think and dress like an American," according to Roger Garcia, brand manager for the Coors Family of Brands, Hispanic.

The brewer uses the acronym SLICE to describe its Hispanic market approach:

• Sponsorships (ex. entertainment venues, New York's Puerto Rican Day Parade)
• Local markets
• Innovations (its newest product is aluminum pints)
• Culturally relevant advertising and programming
• Execution

Garcia said retail activation is vital to bringing all of these pieces together to reach the consumer. "If we don't have retail displays that resonate, all of this can get lost," he noted.

This point was also echoed by Marla Rappaport of Dallas-based Kimberly-Clark Corp., who said engaging consumers at retail is a key aim of her company's Hispanic program for its Scott brand of paper products. Other key goals are to tap into Latinos' cultural passion points and foster a grassroots connection, according to Rappaport, who oversees Hispanic family care marketing.

The Scott program is built around "dichos," folksy sayings used by Hispanics in their everyday conversations. In its recent campaign, Scott asked consumers how they apply "dichos" in their own lives.

The campaign was called "Buen Rollo," which translated means "the good roll." The company teamed with retailers such as Walmart, Kroger, Family Dollar and ShopRite, driving consumers to the stores with in-store demonstrations, sampling, a free gift with purchase, and giveaways. "Buen Rollo" community events also were held in various markets.

Kimberly-Clark was pleased with the results, Rappaport said. The company saw 9 percent growth in measured markets and made 141 million impressions, exceeding its goal.

General Mills, MillerCoors and Kimberly Clark all executed their programs bilingually.

Another major supplier, Northfield, Ill.-based Kraft Foods, maintains a "laser-like" focus on the consumer when it tests Hispanic programs. Autumn Dawn McDonald, director, consumer insight & strategy for Kraft, and Roberto Ruiz, VP, brand solutions at Univision, presented a case study on using in-market testing for growth in the Hispanic market.

Ruiz said in-market testing allows a company to measure the impact before investing resources, to identify ways to improve performance before rollout and to test the upside of Hispanic market investments.

The key to success, according to McDonald, is preparing the test appropriately and then measuring results, taking into consideration important factors such as clearly defining what you want to find out, choosing the right test period, and having both a test and control group of stores.

McDonald and Ruiz showed how a campaign based on Hispanic-specific insights helped increase sales of Kraft Singles cheese by 12 percent to the Hispanic market. "The general market campaign was geared to bringing back grilled cheese sandwiches — but that message doesn't resonate with Hispanics," said Ruiz. Switching to a Hispanic message focused on "made from milk" spoke more directly to Hispanic moms, he said.

At the conference's close, Martín of XL Edge concluded: "If you don't embrace the Hispanic market today, you are running against conventional wisdom. Be patient and persevere, and remember it's all about how you are going to win at retail."

"When you try to translate general market programs to the Hispanic market, you are viewed as non-Hispanic."

—Daniel Herrara, Food Lion

"If you don't embrace the Hispanic market today, you are running against conventional wisdom."

—Armando Martín, XL Edge