According to The NPD Group, Hispanics in the U.S. are more likely to purchase groceries, dairy and bread from convenience stores than non-Hispanics. What are you doing to cater to this growing consumer base?
By Howard Riell, Associate Editor.
Marketing to Hispanics is just like marketing to any other ethnic group, which is what can make it so challenging—and potentially profitable.
A recent report by The NPD Group, a Chicago-based consumer research firm, found that Hispanics in the U.S. are more likely to purchase grocery foods, dairy and bread from convenience stores than non-Hispanics. On average, the NPD found, U.S. Hispanics make almost two more visits a month than non-Hispanics to major oil chain convenience stores, and nearly one more visit over a 30-day period to traditional c-stores than non-Hispanics. For some Hispanics, c-stores supplement or substitute grocery stores.
In addition to groceries, NPD reported, more than two-thirds of Hispanics consider having fresh food available at c-stores to be very/somewhat important. Fresh foods are more likely to be purchased by Hispanic consumers for lunch or breakfast, and hot foods are preferred. Sandwiches and wraps are least likely to be purchased by Hispanics.
Don’t By Shy
The first step in marketing to Hispanic consumers is making the commitment to do so. Too many c-store operators have yet to make more than a token effort to reach out to this growing community despite the fact that doing so could pay handsome dividends.
“I think the convenience store industry has been a bit timido (shy) in attracting the Latino consumer,” said Isabel Valdes, the principal of Isabel Valdes Consulting in San Francisco. “I see so many street carts selling Mexican-brand foods these days, but these are items that should be sold in convenience stores. They are obviously leaving some money on the table.”
Knowing who the customer is can prove half the battle.
“The first ‘do’ is to get to know your community, which any convenience store manager already knows,” said Valdes. “He knows who stops and who doesn’t, and should have a good feel of how the multi-cultural consumer is showing up at the store and, more precisely, how it has impacted his shelf and how products move.”
One common mistake convenience store retailers make, Valdes said, is to assume that they can put some chips out on the sales floor with one translated sign and think they have the entire demographic covered.
Valdes believes that if convenience store operators did a little bit more homework on their customers and the products available to them, that they could significantly boost incremental sales. That homework begins with studying the population that comes into your convenience store, beginning with where they come from.
“What a lot of people don’t realize is that Hispanics are as different from each other as people from the U.S. are from those from England, Ireland and Australia,” said Sylvia Meléndez-Klinger, president of Hispanic Food Communications Inc., a retail consultancy in Hinsdale, Ill. “We all speak English, but we are different. It’s a different English, a different culture and different foods that we eat. It’s the same with Hispanics from Colombia, Argentina, the Caribbean, Mexico and Central America. There is some commonality, but for the most part there is a big lingo difference, and there are a lot of differences in the food they eat.”
True, more than 60% of Hispanics in the U.S. are of Mexican descent, she added. “But that’s no reason to neglect the others who are here.”
Once store personnel become familiar with their regular customers, Meléndez-Klinger said, they should seek out information that can help them make a more personal connection. “Start asking them questions. ‘What are you looking for? What can I get for you? What can I bring in?’ Those are the things that are going to bring them in over and over.”
A Welcoming Environment
Going out of the way to welcome (bienvenida) Latino consumers, according to Valdes, will pay a surprising amount of dividends. “If someone was traveling to Japan he would like to see something in his language, something he understands. So one way to welcome Latinos is to have some Spanish language signage,” she said. “Welcoming people is always valuable, no matter what culture you are in. By saying ‘bienvenido’ or having a Mexican flag in the store you are telling people they are welcome, and that is always important.”
Building the relationship (la relacion) is also key. The additional legwork will ultimately prove to have been worth it, Meléndez-Klinger said. “The thing about Hispanics is that despite the fact that they may have lower incomes, they spend the most money. When it comes to purchasing things, sometimes, when they know they like something, they don’t look at price anymore,” she said. “They look at convenience. They love those little stores.”
This kind of retail relationship is one with which she is personally familiar, she added. “I myself love going to my local convenience store. It’s just three aisles, but it’s a place I can get in and out of quickly and where the employees know me. Plus, if I can’t find what I’m looking for, they will order it for me. It is like an extension of my pantry.”
Also, take close notice of what Latino customers are looking for and buying. “Get to know them because that’s very important to Hispanics,” Meléndez-Klinger said. “You’ve got to build that relationship so they can trust you and know that you’re going to have good prices and the things they want.”
Appealing to Mexican consumers means knowing from the start that they are not going to trust you right away, Meléndez-Klinger said. “They are going to be very suspicious that you are going to charge them too much money, that you are overpricing things. So the main thing you have to do, especially with Mexicans, is develop that trust.”
Do that by asking them questions and tossing in little phrases in Spanish. “When you see them ask, ‘Qué te gustaría?’ or say, ‘Look what’s here; I know you like this, and I got it for you.’ Little things like that really show that you take customer service seriously. Also, when they come in say, ‘Como esta?’”
What are some turnoffs for Latino shoppers? “Dishonesty,” said Meléndez-Klinger. “They will never come back. Maybe you overcharged them, or you gave them a bad product that was rancid, little things like that. They’re not going to complain to you, they’re just going to stop coming to your store. And if they should come back to you and say the product they bought yesterday was expired, spoiled or the package was half-opened and they didn’t realize it until they got back home, you should take it back and give them another one without question. That shows a level of trust Hispanic customers won’t forget.”
Meléndez-Klinger pointed to the Nordstrom rule—employees are instructed to always make a decision that favors the customer before the company—as an example to follow.
Nor should operators overlook their de facto in-house consultants—their Latino employees. “Empower your employees who are Latinos to talk to other Latinos,” Valdes urged. “Make them feel relevant by having them help customers make the best selections. Your Latino employees are going to be your best advisors.”
Having employees on staff who speak Spanish can only work to your advantage. “Get them talking to your regular customers,” Meléndez-Klinger suggested. “It’s a subtly that shows Hispanic customers that you have gotten to know them and respect them.”
Getting to know a consumer group is the first step toward building a relationship, “and the effort is always appreciated,” Valdes said.