Optimize Your Hispanic Marketing and Merchandising Initiatives For Retail Success

By Terry Soto, Author and CEO, About Marketing Solutions, Inc.

A few years back I along with some colleagues were contracted by the Coca Cola Retailing Research Council of North America to help the council tackle what had become a critical issue among U.S. food retailers: how to successfully market and merchandise to ethnic consumers. The result was the actionable “Grow With America Best Practices in Ethnic Marketing and Merchandising.”

As I thought about how I would begin this 10-month consulting project alongside ten major retailer CEOs, I decided that valuable insights would come from interviewing various stakeholders outside of retail to understand for example, observations among trade publications and trade associations of the state of ethnic marketing among US retailers as well as the experience among CPG manufacturers when attempting to gain retailer support for ethnic consumer programs at retail.

The result was a very frank conversation of the obstacles which directly impact retailers’ ability to successfully plan and execute ethnic trade programs, but the bottom line was that retailers were still in a nascent stage when it came to ethnic marketing and merchandising. Some of the most critical include:

  1. Limited top-level supermarket management commitment to prioritize ethnic marketing.
  2. Relatively scarce dedicated management resources to drive ethnic marketing and merchandising initiatives.
  3. Inability to reconcile efficiency models and the capability to customize offerings to ethnic consumers.
  4. Mainly centralized assortment decisions versus those that address local needs.
  5. One size fits all category management volume benchmarks drive assortment decisions with little room for ethnic assortment adjustments.
  6. Heavy reliance on vendor partners to mine ethnic sales data.
  7. Mostly tactical store level ethnic initiatives, rather than integrated into the retailers’ strategy.
  8. Sporadic vendor funded ethnic initiatives comprised mainly of revenue-generating promotions and events.
  9. Ethnic marketing and merchandising is limited and focused on trade advertising and promotions with minimal focus on ethnic customers.
  10. Culturally and generationally homogenous retail decision makers and diversity initiatives related to staffing and suppliers are not common.

As I stepped down from the stage at FMI after presenting the results from this behemoth project, I was swarmed, not by retailers, but rather by CPG companies.

Shortly after, I proceeded to make the rounds at major CPGs where brand managers and business directors saw the following opportunities in the findings:

  1. Top to top meetings between CPGs and retailers to make retailers aware of the wealth of information available through their CPG partners.
  2. CPG companies identified dedicated and cross functional resources to help retailers understand the ethnic sales opportunity possible through turn-key CPG ethnic programs.
  3. CPG companies helped retail partners create ethnic store clusters and respective category management filters that consider ethnic assortment requirements and ethnic velocity benchmarks.
  4. CPGs optimized distribution systems to facilitate efficient DSD distribution systems to help retailers overcome centralized decisions and distribution hurdles.
  5. CPGs proactively mined Hispanic sales data to help retailers overcome uncertainty about ethnic consumption and size of the opportunity.
  6. CPGs created yearlong ethnic marketing trade and consumer marketing calendars with proactive retailer input meetings to deliver continuous strategic programs in support of key sales drive periods.
  7. CPGs pursued more robust diversity goals across their own marketing and sales functions.

Today, retailers continue to struggle with the same hurdles identified eight years ago while being evermore focused on operational efficiencies not the consumer.

However, CPGs have grown increasingly proactively about understanding their retailer customers about their ethnic marketing needs. In doing so, they’ve gained the insights to develop programs which deliver on what retailers, consumers and CPGs value and which are well executed, and isn’t this the true measure CPG and retailer alignment.

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. She can be reached at terrysoto@aboutmarketingsolutions.com or 818-842-9688.

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The Hispanic Shopper of Today Has Changed. Are Retailers Keeping Up?

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

Hispanics have been immigrating in large numbers to the United States for decades, but are retailers still using outdated assumptions about this multifaceted segment of the population? With large proportions of Hispanics having been born in the United States and being heavily influenced by both their heritage the American way of life, these consumers are very much of two cultures and often use English and Spanish in their daily lives.

Information from the Pew Research Center shows that the share of foreign-born Hispanics is on the decline. In 2012, only 35.5 percent of Hispanics were born outside of the United States compared to 40.1 percent in 2000, and these figures are even lower when looking only at children.

So what does this mean to retailers? It means the Hispanic shopper of today is a hybrid. For instance, despite the fact that many Hispanics are now U.S.-born, they are clinging to the traditions of their ancestors, particularly in their food and beverage choices. According to The NPD Group, 65 percent of Hispanics in the Millennial generation say they always or often follow traditions when planning and serving meals. This proportion is as large as among Hispanic women overall.

At the same time, it’s important to understand that the Hispanic Millennial shopper of today is not just about Hispanic foods. They have adopted and increasingly appreciate diverse foods from not only other countries, but good old fashion “American” cuisine; though this is mostly a food service dynamic, Hispanic are very accepting of packaged varieties they can enjoy at home.

Today’s Hispanic is also in love with convenience making certain frozen and canned items commonplace in their shopping carts. Today’s Hispanic mom has no qualms about striking a balance between fresh, packaged and frozen.

Today’s Hispanics are also more likely than Non-Hispanic Whites, Asians and Blacks to strongly believe that store brands are a good alternative to name brands. In fact, Nielsen Home Scan data indicates that the top 20 store brand edible and non-edible commodity categories shopped by Hispanics and non-Hispanics align very closely.

In and of themselves, these changes should make retailers and food companies sit up and reexamine what they know and the strategies being implemented as a result. Now the question is where? The answer is, pretty much everywhere. Hispanics have been increasingly migrating from urban to suburban communities for some time. According to the Brookings Institute, in 2010, half of the foreign born population and an even greater share of US born Hispanics lived in suburbs. So, the old thinking of targeting Hispanic store sets concentrated in urban communities hasn’t been valid for a long time. Today’s Hispanic shops urban and suburban stores. This is a game changer for retailers and manufacturers chain wide. Understanding how the majority of today’s Hispanics are different and the fact they are shopping retailers chain wide should directly impact store execution chain wide. This is critical to winning a larger share of today’s Hispanics’ wallet.

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 marketingsolutions.com or send me an email at: terry@aboutmarketingsolutions.com

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In the Eye of the Beholder

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

I’ve just returned from vacation in Central Europe. Over three weeks I travelled from Los Angeles to Poland, Hungary, Slovakia, Czech Republic, Austria, Germany and back. In spite of my efforts to learn a least the basics of each language, I realized I bit off more than I could chew when I only managed to convolute them. Oh well! BUT this didn’t prevent my travel partner and I from engaging with and meeting all sorts of wonderful people who were so willing to share their experiences, advice and directions—sometimes in English and sometimes, as we ventured off the beaten path, in Polish, Czek, Slovak, Hungarian or German. It’s amazing how even when you don’t understand a single word, expressions, motions and smiles communicate just fine and result in an even richer experience.

Truth be told, I hadn’t felt an interest in Central Europe before because it seemed so foreign and different to me; un-relatable somehow. But I travel to open my mind so off I went. Travel has always been a critical way to gain new perspectives and to understand culture as it applies to all facets of life. And once again, I was captivated by how similar we really are as human beings EVEN in Central Europe. I met all sorts of families, children, teens, executives, local store and restaurant owners. Everywhere we went people were warm. They smiled and laughed the same. They have their moods. They argue. They go about their daily work and school routines. They love their families. They cherish free time. They want to belong.

I was especially impressed by the similarities to Hispanic and Mediterranean cultures across many facets of life in central Europe and especially taken by the sense of family and community. I never would have imagined that as I walked through these cities on any given late afternoon, weekday or weekend, I would see parks filled with young people and young families with young children. Families (moms AND dads) picnicking, playing with their children or watching the kids run through and play in the multitude of fountains. I learned that many young families take advantage of flextime and typically go into work very early so they can be home with family by 3pm.

I also saw the importance placed on the freshness of food. They appreciate fresh produce, meats, seafood, grains, spices and flowers and plants as reflected in the large number of people shopping large food markets comprised of individual stalls. Bakeries, flowers stands and fruit and vegetable stands are ubiquitous. I’d say no different than what one might see and experience in any Latin American or Mediterranean country. These are the places I love to find, where I people watch and where I proceed to taste everything in sight. Supermarkets are smaller than those found in the US or Western Europe and while well assorted, specialty shops and stalls throughout seem to be preferred when it comes to shopping for freshness.

As someone whose profession is focused on sensitizing clients to multiculturalism and as one who often encounters resistance to diversity in the US, I was taken by the attitude towards diversity in many of these countries and especially in Austria and Germany where as a result of the privilege afforded to European Union citizens, people from all over cross borders to study and work where they please.

This diversity is evident in the mixed composition of families one sees throughout and in the faces of restaurants and business owners in city centers. Interestingly, it all seemed to fit seamlessly and as I was told by a local in Germany, “We love diversity and immigrants because it creates opportunity for different types of restaurants, supermarkets and other types of businesses to flourish and it helps make Berlin a more interesting, productive and fun place to live.” Who knew Berlin had such a large Turkish community. A Vienna local said, “We need immigrants for the health of our economy. Europeans are old and they aren’t having kids. If we didn’t have immigrants how would our society continue to thrive in good times and bad?” WHAT A REFRESHING OUTLOOK!

Those who know me well know I love to travel. I try to travel abroad for three weeks at a time at least twice a year. Yes, I go to see beautiful places but I also go to immerse myself in local customs and to participate if I’m lucky. It’s an introspective view and study of people. And, a big part of me is constantly looking for clues to understand what makes some Americans of a certain age and culture so resistant and uneasy with the diverse populations that call America home.

I secretly wonder what might open up for them if they could see what I see in the diversity within our own borders. I think they would see we are all the same. I think they would see that people are warm. They smile and laugh the same. They have their moods. They argue. They go about their daily work and school routines. They love their families. They cherish free time. They want to belong.

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 marketingsolutions.com or send me an email at: terry@aboutmarketingsolutions.com

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