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 We thought it was important to speak of this evolution because many marketers continue to operate with an outdated view of what the Hispanic market is today and as a result, many retailers continue to move slowly and cautiously to ready their organizations to be Hispanic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 marketingsolutions.com or send me an email at: firstname.lastname@example.org