Drilling Down into the U.S. Latino MarketJune 4, 2015
By Elizabeth Krauss
The Latino market is poised to spend $1.3 trillion this year and Hispanics will make up 30 percent of the U.S. population by the year 2060, but this is just the tip of the iceberg when it comes to the reasons why no business can afford to ignore this growing segment of the marketplace. Here’s what you need to know.
The Latino market isn’t just the fastest-growing segment of the U.S. population, it’s younger and its members tend to spend 20 percent more on soft goods (shoes, clothing, etc.) than non-Hispanic consumers, according to a CNBC story advising retailers to pay attention to Latinos. In fact, the story cites a recent McKinsey study which predicts that spending by Latino consumers will double over the next decade and comprise as much as one-fifth of total retail spending in the process.
With so much at stake, retailers (and B2B sellers as well, for that matter) that ignore the Latino market run the risk of failing to connect or even alienating Hispanic buyers, instead of winning their business, loyalty, and brand advocacy.
Winning loyalty and brand advocacy from Hispanics is a distinctly worthwhile goal. Not only are many within this fast-growing market segment connected to others within the community, they are also more social (digitally speaking) than their non-Latino counterparts.
While just 72 percent of adults in the U.S. are active social media users, that number rises to 80 percent within the Hispanic population. What’s more, 48 percent of Latino shoppers use social media during the shopping process (clickz.com) and they are leading when it comes to mobile. Check out these stats about social shopping, smartphones, and Hispanic shoppers:
- 47 percent use geo-location on their smartphones while shopping
- 46 percent use online videos to support their shopping journeys
- 36 percent share opinions about brands and products, and post reviews online
- 38 percent have searched for online reviews via smartphone while shopping in-store
- 31 percent have used a store’s mobile app (compared to just 21 percent of all shoppers)
It’s also important to point out that it’s not just about buyers, growth in the Latino market is about sellers, as well. The number of Hispanic entrepreneurs in the U.S. has doubled since 1996, in line with growth in the numbers of immigrant entrepreneurs overall. The American dream is alive and well within this marketplace segment. Hispanic entrepreneurism is often intertwined with family as well as extended community. Not only will they often market effectively within their ethnic market segment, they will often hire from within this community and patronize other Latino-owned businesses as well.
Marketing to Latinos: 5 Things Retailers Should Keep in Mind
- Success in marketing to Latinos can rest in language, as language can be a barrier.
Should you create a Spanish version of your website, hire Spanish-speaking staff, and translate all your marketing materials into Spanish? While it’s true that some first generation Hispanic immigrants do face a language barrier when it comes to shopping or doing business with non-Spanish speakers, their children may have English skills.
Whether you need to have your web site, social networks, or marketing collateral translated into Spanish (or any other language, for that matter,) depends, as does any other marketing initiative on your target market and ideal buyer types. That said, businesses that show respect for the multi-cultural heritage of buyer segments may create a competitive advantage by doing so.
- Take time to educate yourself and your staff.
A deeper understanding of the shopping and behavioral tendencies of Latino consumers (or any other consumer segment) is necessary for a business that wants to truly connect with this market. What you learn may influence a wide variety of business decisions, from the staff you hire to the inventory or services you provide or even the layout and design of your brick-and-mortar or virtual store.
There are many resources available to today’s business owner who wants to learn more about marketing to Hispanic consumers. From books to college courses, webinars, articles, and consultants, the more worth that a business owner perceives can be gained in reaching Latino shoppers, the more they should be willing to invest.
- One size does not fit all.
It would be dangerous to believe that ‘one size fits all’ when it comes to attracting, engaging, and motivating Hispanic shoppers. The Latino population is comprised of people from many different countries and communities, each of which has its own dialects and general preferences. For a local business, it might be more beneficial to seek out community leaders and other influencers within the surrounding Hispanic population in order to educate themselves than to read up on generalizations that might not be true.
Likewise, remember that generalizations are just that; Hispanic shoppers cannot be defined by heritage alone. The marketing strategy you define to reach Latino shoppers must also take many other characteristics into consideration (such as profession, income levels, family size, age, gender, etc.)
- It’s about inclusion, not segmentation.
As you consider your plan for marketing to Latino consumers, remember to take a bi-cultural approach – because they do. While many Hispanics are connected to others within the Latino community, most are also fully immersed into mainstream U.S. culture. Finding common ground when it comes to causes and interests may provide a stepping stone that helps your business connect with Hispanic shoppers in a more personal way.
- Adopt a multi-platform mindset.
When it comes to Latino shoppers, 55 percent like to touch a product before buying and they are very likely to reach out to their friends and family members for product recommendations and opinions. Before making a buying decision, the Hispanic shopper may visit your business’ website, social networks, review sites, and your store itself, depending on how expensive or important an item is to them. Ensuring that your marketing strategy is deployed across platforms, creating an immersive, engaging experience for the Latino shoppers could be critical for success within this market.