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The Nuevo New World

At more than $1 trillion annually, the buying power of Hispanics presents enormous opportunity. Here’s how to go about tapping it.

By Lyndsay McGregor

At more than $1 trillion annually, the buying power of Hispanics presents enormous opportunity. Here’s how to go about tapping it.

By Lyndsay McGregor

The numbers are in: According to a recent report published by research firm Nielsen, the 52 million Hispanics living in the United States have a collective purchasing power of $1.2 trillion annually. And Hispanic women, also called Latinas, are the ones in the driver’s seat: The NPD Group reports they spent an estimated $3.3 billion on fashion footwear in the year ended May 2013. That’s 18 percent of the country’s total women’s fashion footwear market. As young Latino women begin to enter the workforce and move up in their careers, the Hispanic spending power is only expected to increase.

“It shouldn’t be a surprise because this trend has been happening for a few years now. Shoe manufacturers and retailers need to understand that this influential demographic is growing,” says Luis Alvarado, a strategic adviser to Revolvis Consulting in California and an expert on Latino issues. Hispanic women are the growth engine of the U.S. female population and by 2060 will represent an estimated 30 percent of the total female population, while the non-Hispanic white female population is expected to drop to 43 percent. Indeed, emerging cultures are reshaping the country’s shopping habits and Hispanics are leading the way. In order to capitalize, brands and retailers need to understand the mindset and cultural roots that influence the shopping behavior of North America’s fastest growing population segment.

Know The Customer

First thing’s first: Is it Hispanic or Latino? A recent Gallup poll found that people of Latin American heritage couldn’t care less which label they get tagged with. When Gallup asked which they prefer, 70 percent said it didn’t matter, with 75 percent of people under the age of 29 saying they didn’t have a preference. In fact, most Hispanics identify primarily by country of origin rather than pan-ethnic terms, according to an earlier poll by the Pew Hispanic Center.

Rocket Dog is a popular brand among Hispanic consumers.

But that doesn’t mean marketers can have a one-size-fits-all solution, especially in the retail space. “One of the biggest mistakes retailers make is that they build a marketing plan for one segment of the population and they just do the bare minimum to present it or translate the concept to the secondary culture,” Alvarado says. Danny Wasserman, co-owner of Tip Top Shoes and Tip Top Kids in New York, advises, “Hire at least one sales associate that speaks Spanish. Read and watch some of the Spanish shows on television. Get some advice from the Spanish speaking associate as to what is being worn in his or her community and, most important, observe the pattern and expand it if you’re trying to get more of that business.”

Marta Rodriguez, a Tip Top Kids buyer, echoes this sentiment and says it all goes back to that golden rule of retail: offering top notch customer service. “Hispanic women are very conscious of product information and getting service from an associate. If you speak down to them or assume that because they’re Hispanic they don’t require service is something that’s disrespectful,” she says. “You don’t have to approach a customer and start speaking Spanish, but it’s great when someone is Hispanic and they can build a sale and provide information that the customer didn’t have.”

According to Skechers President Michael Greenberg, retailers also need to understand the mindset and needs of the segment as well as the most effective touch points for consumer engagement. “Skechers was founded in Southern California, just south of Los Angeles, where there is a prominent Hispanic demographic. Since our inception both male and female Hispanic consumers have embraced Skechers’ marketing, styling and family-friendly pricing,” he says. “Historically, we have run several commercials in Spanish on Spanish-speaking TV channels as well as run Spanish radio commercials.”

But it’s not enough to simply translate your English marketing into Spanish. Shoes On A Shoestring of Albuquerque, NM, works closely with Rocky Mountain Media Services (RMMS) in order to best reach its Hispanic market. “We have such a large Hispanic community that we try to accommodate our selection and what we use to advertise based on some of the local activities in the area,” reveals Terry Riddle, president of RMMS, noting that the store does a lot of radio advertising to reach its target market of adults ages 18 to 49. “Basically, we take a 30-second advertisement and co-op it. We talk about general branding, price selection and service, and use the last 15 seconds to talk about the specific vendor.” For New Year’s Eve Shoes On A Shoestring ran a co-op ad with Unlisted by Kenneth Cole that talked about getting ready to go out that night and which of the brand’s pumps would make the perfect party shoe. Riddle adds, “Inviting these people to do business with you in their own language is a very easy way to target that market.”

At Shoes On A Shoestring, where prices range from $24.99 to $100, Skechers, Rocket Dog, Blowfish and Madeline are among its best selling brands, and the store always makes sure it has plenty of low-heeled shoes in stock for quinceañeras (the celebration of a girl’s 15th birthday). “The one thing about the Hispanic market is that women like to dress up. They like to go to the clubs and they like to look good. Instead of buying one pair of shoes, they’re going to buy two or three,” Riddle says, adding that the Latino shopper is a spontaneous one. “If she sees something she likes, she’s going to spend the money on it, whether it was a planned purchase or not.”

What a (Latina) Girl Wants

The Hispanic community is rapidly becoming the most influential voice in pop culture, business and politics, and its trendsetting impact can make or break the success of those seeking brand popularity. As reported by The NPD Group, fashion boots are the No. 1 style in the total U.S. market, but in the combined Hispanic market cluster of El Paso, TX, Harlingen, TX, and Miami, FL, pumps come out on top. And as Cathy Taylor, CEO of Rocket Dog, a top-selling brand at Shoe Carnival stores across Texas and Puerto Rico, says, retailers would be remiss to assume that a Latina’s love affair with shoes is any different from that of a non-Hispanic woman. “In any market, the more aspirational you are and the more disposable income you have, footwear will always sit at the top of the chart,” she says.

Toms is a popular brand among Hispanic consumers.

Alvarado agrees. “Just because one is Latina doesn’t mean she’s going to be purchasing ‘Latino styles,’” he says. “They use the same footwear that is seen in corporate America.”

He adds, “Women in general have been asked to always be presentable or seem attractive.

Now there are more Latinas and they want to fit in. They have a greater need to project themselves to fit into several types of social settings.”

“It just goes to show that retailers and brands need to be cognizant of the changing demographic of our society and the influx of immigrants and second- and third-generation immigrants that change the way in which we market,” offers Matt Priest, president of the Footwear Distributors and Retailers of America (FDRA). “It’s another frontier for which the industry has to understand the changes.” Retailers are also advised to look beyond the Spanish-language demographic and wake up to the fact that second- and third-generation English-speaking U.S. Hispanics is where a growing volume of purchasing power lies. Despite the established notion that Hispanics are value shoppers, a study by the AHAA: The Voice of Hispanic Marketing reveals that Upscale Hispanics (those with incomes ranging from $50,000 to $100,000) is the most influential segment since Baby Boomers, and it offers upside opportunities in particular for high-end dealers.

“The Hispanic segment of the population has a growing income and obviously has an eye for fashion,” Priest says, adding, “Hispanic shoppers want quality, they want high fashion and they want accessibility. Once they decide they want a pair of shoes, they want it in stock.”

Marshal Cohen, chief analyst at The NPD Group, says that channels that focus on brand names and command higher price points are benefitting from the higher spend and posting stronger growth. “When you look at where they’re shopping, you can actually see the Hispanic consumer has started to migrate over to the department store, looking for better product,” he says. “She’s trading up in footwear but willing to trade down in other business: Maybe she’ll buy less expensive clothes or home essentials but when it comes to footwear, she wants the better brands.” Rodriguez concurs: “They don’t want to go downtown and buy a knockoff. It’s about the quality and knowing about the real deal,” she says.

Wake Up, America

Unfortunately, many American corporations continue to cling to preconceived stereotypes instead of becoming informed about Hispanic culture and how it shapes the identity of Hispanic consumers and their communities at large. This disconnection makes it difficult for retailers to authentically engage, build trust with and ultimately value Hispanics as a viable, business-worthy consumer base. But it’s not just Hispanics. While statistics show that one in 10 marriages—that amounts to more than five million marriages in the U.S.—are interracial, there has been little media prominently featuring interracial couples or their children. And on the rare occasion that a company showcases a modern American family, a wave of bigotry often follows. Earlier this year, for example, Cheerios was forced to disable its YouTube comments section on a commercial depicting an interracial family after it became inundated with virulent racism. Given this negative sensitivity, many advertising agencies remain wary.

Skechers is a popular brand among Hispanic consumers.

The fact of the matter is the rising number of interracial marriages and, in turn, multiracial children should offer plenty of incentive for advertisers to pay attention. “Retailers need to get out of their old ways and stop advertising so safe and neutral,” Taylor says. Rodriguez adds, “If you do any kind of POS programs, it should reflect today’s diversity. I make a point of going through signage and requesting a more diversified face to whatever the product is or the vendor or the brand. It makes the whole environment much better. When shoppers walk into an environment they notice, and it makes the whole process more comfortable and they’re more likely to stick around and spend.”

“All you have to do is look at how many Latino children are in junior high and high school now,” Alvarado says. “They’re already a purchasing power because they already influence their parents.”

Along those lines, Latinos are also adept at social shopping: They leverage mobile, social media and friends and family to share their shopping experience before, during and after. A recent report released by the Pew Research Center found that the demographic is the largest group of social media users, with 80 percent regularly using social networking sites. They influence and are influenced by what their social media connections are saying about a specific brand or product with 48 percent using Twitter, Facebook and Instagram during the shopping process. “When I’m on the floor I see it,” Rodriguez confirms, adding that celebrities are hugely influential, too. “When you get a product on a celebrity or a musician that they recognize, they’re very aware. They snap that up.”

Last but not least, brand loyalty of Hispanics tends to be very strong. Relationships both personal and professional are central in many of their lives. This value of human interaction naturally carries over when purchasing a product or even requesting information. As a result, when a Latino consumer is attended to with high-quality customer service, they easily form a relationship of trust and loyalty with that retailer. “She expects service and appreciates product information. Offer that and she will return time and time again,” Rodriguez says. And they can also become your biggest referral source because they will share their experiences—both good and bad—with family and friends. And, as the population continues to grow in size and influence, ignoring its potential rewards is risky, at best, and may be the difference between survival or extinction. “The Latino community is quickly growing,” Alvarado says. “It’s best to accept the fact that it’s part of the fabric of our society.”

The June 2024 Issue

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