An Honest Understanding of Today’s Consumer Market Has Deep Strategic Implications

Bessie Ramírez, Managing Partner, About Marketing Solutions, Inc.

As business leaders, it can be a challenge to stay abreast of relevant industry trends and consumer dynamics. Often times, it is hard to assess the validity of the latest research publication and its relevance to your particular business. This is where a high caliber industry conference like Hispanic Retail 360(HR360) can come in handy. This conference covers the gamut between strategy and tactics in the retail space but, because it involves a variety of experts who are in the trenches with consumers daily, HR360 serves as a barometer for trends critical to any business dependent on today’s consumer.

Let me share with you a few big picture take-aways so that you can judge for yourself:

  • To do or not to do Hispanic marketing? Is no longer the question. The real question is What Hispanic?
  • Outreach in Spanish is still very relevant, but it is not the end all be all
  • Market leaders build integrated business strategies that address the needs of high growth sub-segments
  • This is elevating the conversation into the multicultural arena, including the Hispanic market as well as the Non-Hispanic market that loves all things Hispanic
  • Digital engagement is a powerful tool to bring integrated strategies to life while addressing specific market needs—and it is especially relevant to Hispanics

As you can see, this conversation cuts across industries, with applications well beyond retail and CPG, into areas such as financial services and healthcare, to mention a few.

What Hispanic?
Hispanics are not a homogeneous group and you need to know which sub-segment is most critical to your business today and in the future. US-Born Hispanics (UBH) account for about 2/3 (64%) of all Hispanics. Most of them (75%) are 34 years old or younger, driving the segment to a median age of 18. That’s a whole lot of Millennials, 34 million in 2012 according to Pew Hispanic Center, who are driving growth for categories such as beer and shifting channel dynamics, such as fueling growth in Drug.

But that still leaves a substantial 19 million1 Foreign-Born Hispanics (FBH) who are a force to be reckoned. Foreign Born Hispanics dominate larger households (5+ people)2 so, while they spent less in 2013 v 2012, they still accounted for the highest average $ spend per home/grocery department ($842 FBH, $770 UBH, $782 NH). Two thirds of FBH are 34+ years old, driving some categories such as shampoo and conditioners where their household spend outpaces that of UBH and NH.

Brand perception and product preference can vary significantly among Hispanics based on nativity and acculturation as evidenced by Suavitel, which enjoys a stronghold among First Generation Hispanics (i.e., Foreign Born) and has a significantly softer following among Second and Third Generation Hispanics (i.e., US Born). Ultimately, deep consumer knowledge coupled with an assessment of your business objectives, the category, your competition, and your brand will point to pertinent Hispanic and Non-Hispanic sub-segments. That focus will in turn drive strategy.

Spanish: Sí / No
Unlike previous years, where the industry seemed to hold on fiercely to the idea that outreach in Spanish was virtually the only way to truly capture the Hispanic market, this year’s conference speakers carried a different tune. While the last ten years saw a significant rise in homes that are equally bilingual in English and Spanish, Nielsen reports that Spanish TV ads resonate better than English TV ads across sub-segments (i.e., English-Dominant, Spanish-Dominant and equally bilingual consumers).

This is due in part to the fact that many general market ads just don’t resonate with Hispanics. Hispanics often don’t relate to the situations and/or the cast being portrayed. Nonetheless, Hispanics are spending significant time consuming English media (Hispanics’ share of time spent on English Cable and Spanish Broadcast is very close, 39% v. 36% respectively), so if an advertiser is only advertising in traditional Spanish language media the message is likely to miss many Hispanics who don’t consume Spanish media.7

Is there a verdict? Should your outreach to Hispanics be in Spanish, English or both? A one-size-fits-all answer won’t do. Hopefully it’s becoming clear that it depends on various factors, not the least of which are your business objectives, your category and the composition of your target market.

Now, you may be thinking that the Hispanic market just got more complex than it was before. The reality is however, in the words of Walmart’s Javier Delgado-Granados: “If you don’t reach the Hispanic consumer, you are not going to grow. (You) need to engage the customer, regardless (of ethnicity).” At the end of the day, it’s about marketing fundamentals while being honest about the market. Your consumer profile is no just bound by age, gender and marital status; ethnicity and language are critical parts of the equation and can no longer be ignored. These are now part of the “musts” of consumer profiling for strategy development and subsequent activation. Angel Colón talked about what this means for Kroger: “Collaboration, not silos. Passion for growth. Want to engage all customers with a multicultural approach.” He contends that data helps to understand the market and optimize the store.

Now, the definition of race and ethnicity is changing. The 2010 Census saw a significant increase in multi-race households. Some contend that the U.S. will become a Majority Interethnic Society this year. Also, consumer beliefs are reflecting favorability for cultural differences (66% report that “respecting racial and cultural differences makes society better”).7 Keeping pace with the times, HR360 announced that it will evolve into “Multicultural Retail 360” next year. Sounds like a pretty smart move! They can turn to Tom Herman from Northgate Gonzalez Market for inspiration. Tom shared how their customer composition has evolved whereby US Born Hispanics and Non-Hispanic “foodies” have become a great source of growth. This has driven them to become bilingual (v Spanish dominant) and broaden their offering beyond traditional Hispanic fare.

Hispanics are spending less time viewing TV (about 40 hours less per month than NH) and more time on digital devices (almost 2 hours more on the computer and one hour more on mobile than NH). Online plays an important role among Hispanics along the purchasing funnel. For perspective, online influences 76% of purchases among Foreign-Born Hispanics.

Mobile devices have become the primary online access for almost 2/3 of Hispanics. Not only does mobile help Hispanics stay connected with friends and family, but it enriches the shopping experience. It is important to note however that, while a greater proportion of Hispanics own a smart phone versus Non-Hispanics, mobile behavior among sub-segments varies as well. Foreign-born Hispanics are more likely to use a mobile device for price comparisons and coupons. Also, more of them use their mobile device in-store as compared to UBH and NH. Conversely, a greater proportion of US-Born Hispanics report making mobile purchases versus FBH and more of them say they use mobile devices at home as compared to FBH and NH.

Bottom Line

  • Ethnicity is a critical component of consumer profiling
  • Hispanics are not a homogeneous group
  • The answer to the “Spanish question” is contingent upon your specific category
  • Culturally, bilingual Hispanics are a “hybrid” consumer. Assuming that a general market approach will capture bilingual Hispanics or assuming that last year’s Hispanic marketing will do are both a high stakes gamble.
  • Integrated strategic thinking is crucial for success in today’s America. Operating in silos, with ancillary Hispanic marketing or multicultural initiatives will limit potential and could be detrimental to your organization’s long term sustainability.
  • Digital needs to be elevated from isolated tactical executions to a powerful strategic tool. Mobile deserves serious consideration, inasmuch as it is mapped to your category’s purchasing funnel and in keeping the particular consumer sub-segment’s mobile behavior.

Let’s be honest about the market and what’s needed to succeed in today’s undeniably Multicultural America.


The Hispanic Market Has Evolved. How Are You Evolving With It?

Terry J. Soto, Author and President  & CEO, About Marketing Solutions, Inc.

I just returned from the Hispanic Retail 360 conference where I presented with Darren Seifer of NPD. The main theme of our presentation was the evolution of the Hispanic market. We thought it was important to speak of this evolution because many marketers continue to operate with an outdated view of what the Hispanic market is today and as a result, many retailers continue to move slowly and cautiously to ready their organizations to be Hispanic market relevant and business ready to serve them.

Let me share some of the quick facts I shared last week that compare the Hispanic market of 1990 with the Hispanic market of today and you will quickly see how they differ demographically and socioeconomically and hopefully see the implications for your business.

  • Population: 22 million in 1990 when foreign-born immigration drove growth to 35 million in 2000. In 2014, there are 56 million Hispanics and natural births drove growth in the last decade. Today, the largest 100 metros in the countries are only 57 percent. These are likely the same places where most of us do the lion share of our business.
  • Acculturation: In 1990, the immigrant population was recently arrived. Many had lived in the U.S. 15 years or less and their culture of heritage dominated their beliefs and choices. In 2014, two thirds of Hispanics are Bicultural as a result of being mostly U.S. born or raised in the U.S. Two thirds of Hispanic Millennials are U.S. born and 70 percent are Mexican. Beliefs and choices have been shaped by both U.S. and culture of heritage. Few Hispanics living in the U.S. even after one year of living here are ever the same person again. What and how Hispanics buy today is driven by the fact that Hispanics have morphed into a hybrid consumer – stimulated by everything they see, smell, hear, taste and touch in the U.S.
  • Language: In 1990, Spanish was the dominant language of a largely foreign born population. Spanish was the language of comfort spoken in the home because few spoke English well. In 2014, Hispanics are largely bilingual. Up to 80 percent of Hispanics speak at least some English. Hispanics can now be selective about whether they will speak English or Spanish or both according to the situation and present company.
  • Geographic Concentration: In 1990, most foreign born Hispanics lived in urban enclaves where they were insulated and isolated. Three fourths of Hispanics lived in just 65 counties. Today, over half of the foreign-born and an even greater proportion of U.S. born Hispanics live in the suburbs. Between 2000 and 2010, diverse suburbs increased by 53 percent, predominantly non-white suburbs increased by 72 percent while predominantly white suburbs decreased by 23%. Retailers who are still segmenting their stores to identify “Hispanic” store sets are operating based on an outdated model and are missing the lion’s share of the Hispanic opportunity. Today’s Hispanic are shopping chain wide.
  • Income: In 1990, the average Hispanic Household Income was just under $20K and the per capita Income was just $8K. Today, Hispanics’ average household income has doubled to $40.5K right alongside per capita income ($16K). In fact, Hispanics’ per capita income is higher than in any of the highly coveted BRIC countries where companies spend billions to do business.
  • Spending Power: In 1990, Hispanics’ spending power was just $210 million. By 2015, Hispanics’ spending power will reach $1.5 Trillion and as a standalone economy, the U.S. Hispanic market will be the 12th largest economy in the world. Clearly the opportunity is greater and more accessible stateside.
  • Age: Hispanics have always been a young market and today is no different. Hispanics represent 95% of the teen population. Over 60 percent are under 35 years of age and 75 percent are under 45 years of age. Only 20 percent of Hispanics are Boomers compared to 40 percent in the market overall. One in five Millenials in the U.S. are Hispanic. The ratio increases to one in three in California and Texas and to one in four in Florida. With eight hundred thousand Hispanics turning 18 every year, Hispanic Millennials will drive 80 percent of Millennials growth and represent one quarter of the Millennial population by 2020.
  • Family: Hispanics have the highest fertility rate of any other group and this has been true for decades. One reason is Non-Hispanic whites have the oldest median age, 42.3, in 2011, according to population estimates. Hispanics have the youngest, 27.6. Hispanics are forming family households at astounding rates. In 2012, Hispanic households increased by one million households while non-Hispanic households declined by seven hundred thousand households. Clearly, Hispanics are prime opportunities for household related categories.

To be effective with today’s Hispanics, it’s important to take a time out to understand and calibrate who today’s Hispanics are as consumers. Don’t go by what you may have heard at some point. Don’t go by what others in your organization may have told you. Don’t go by out of context, piecemeal bits of trivia you may have read somewhere. Roll up your sleeves and do the homework. Get down to basics:

  • Update and rethink your understanding of who your Hispanic shopper is today.
  • Understand what excites your Hispanic targets when shopping your category.
  • Understand when your Hispanic customers want to be spoken to as a group and when they appreciate one on one communication.
  • Find out where and how you can best reach today’s Hispanic targets.
  • Rethink your media mix and technology options to relevantly engage your Hispanic targets based on their lifestyle, culture, and language preferences.
  • Leverage big data and analytics to tell you where your Hispanic targets’ dollars are going so you can take the necessary steps to better attract and service them.
  • Ensure your execution at retail considers that today’s Hispanics are shopping across your entire chain and adjust your execution accordingly.


Terry Soto is President and CEO of About Marketing Solutions, Inc., a Burbank, California – based strategy consulting firm specializing in helping her clients dramatically improve overall business performance by optimizing their strategies to succeed in the Hispanic market. For more information please visit www.about or send me an email at:


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