Hispanic Shopper Insights - POPAI University on the Web Jan. 2009
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This document summarizes a presentation on Hispanic cultural insights. It introduces the speaker and her agency, Mercury Mambo, which specializes in strategic Hispanic marketing. It then covers topics like the changing demographics of the US, Hispanic acculturation levels, cultural values around family, gender roles and education, the economic and pop culture influence of Hispanics, shopping behaviors like number of trips and preferred stores, product preferences that change with acculturation, in-store marketing opportunities, and a case study on a 7UP marketing campaign targeting Hispanics.
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Hispanic Shopper Insights - POPAI University on the Web Jan. 2009
- 1. Where Commerce & Culture Collide Hispanic Insights POPAI University - On the Web January 22, 2009
- 2. Agenda • Speaker Introduction • Changing Face of America • Cultural Nuances - Hispanics • Hispanic Shopper Insights • In-Store Opportunities • Insights into Action - 7UP Case Study • Questions
- 3. Becky Arreaga • Agency Partner & Founder • Over 23 years industry experience specializing in client management, strategic planning and marketing integration • Began career at nation’s largest Hispanic advertising agency, now Bromely Communications • BA from Texas Tech University, MA from The University of Texas at Austin • Appointed to the National Board of Directors of the College of Mass Communications at Texas Tech University
- 4. • Full-service Hispanic agency specialize in strategic below-the-line marketing driven by real-time consumer and marketplace insights • Seasoned team of marketing junkies with 20+ years experience in segment marketing and sales activation • Network of Market Ambassadors in the top 25 Hispanic markets • Based in Austin, TX and are 100% minority and woman owned Mercury Mambo
- 5. Mercury Mambo Motivate Hispanic consumers to take action!
- 6. • Create brand experiences designed to make a positive and meaningful impact on consumers • Work with some of the most recognized brands on the planet • Do amazing things with amazing clients • Named to Inc. Magazine’s 500/5000 Fast Growing Companies in 2007 and 2008 Mercury Mambo
- 7. The changing face of America
- 8. Increasing Cultural Diversity Source: US Census Bureau (1980&1990) and Geoscape (2020) The non-ethnic market is shrinking
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- 12. 12 Percent Hispanic of the Total Population in the United States 1970 to 2050 *Projected Population as of July 1 Source: U.S. Census Bureau, 1970, 1980, 1990, and 2000 Decennial Censuses; Population Projections, July 1, 2010 to July 1, 2050 Census Projections 7/1/08: Hispanic population surpassed 45 million, representing 15.1% of total pop!
- 13. Market Opportunities Current Population Population Growth 2000 - 2008 CAGR State Hisp. Pop. (mil) Hisp. as % of Total Hispanic Total Largest Markets States with the largest Hispanic Populations California 13.5 36% 3% 1% Texas 8.8 36% 4% 2% Florida 3.8 20% 5% 2% New York 3.1 16% 1% 0% Illinois 2.0 15% 3% 1% Concentrated Markets States with the highest concentration of Hispanics New Mexico 0.9 44% 2% 1% Arizona 2.0 30% 5% 3% Nevada 0.7 25% 7% 4% Colorado 1.0 20% 4% 2% New Jersey 1.4 16% 2% 1% Growing Markets States with fastest Hispanic population growth Georgia 0.8 8% 8% 2% Tennessee 0.2 3% 8% 1% South Carolina 0.2 4% 7% 1% North Carolina 0.7 7% 7% 2% Maryland 0.3 6% 5% 1% U.S. Total 47.2 15% 4% 1%Source: U.S. Census Bureau, Geoscape® American Marketscape DataStream™” 2008 Series; Latin Force Group LLC and Goldman Sachs Research
- 14. Acculturation Skews Foreign Born Includes both foreign and U.S. born U.S. Born (2nd & 3rd generations) Typically married, less education, rent vs. own Skews slightly female More likely to be college-educated Avg. HHI approx. $53k Average HHI $65k Average HHI $81k Todo en español Fastest growing segment English only Desire to belong, connect to home, familiar brands Blend both languages, embrace heritage and innovation Brands = reconnect, retro- acculturation Source: Adapted from Yankelovich MONITOR Multi-Cultural Marketing Study 2005, Simmons NHCS/NCS Spring 2006 Full Year Study, Hispanic adults 18+
- 15. Understanding Hispanic Cultural Insights
- 16. Macro Trends Sources: Adapted from Yankelovich MONITOR Multi-Cultural Marketing Study 2005, Simmons NHCS/NCS Spring 2006 Full Year Study, 2006 ACNielsen Values Orientation Economic Impact Pop Culture
- 17. Understanding Hispanic Cultural Values Latino American Interactions Family Interdependence Relationship Oriented Sympatía y Harmony We decide as a family Individual Achievement Task Oriented Healthy Competition I make my own decisions Success Get ahead Get more joy out of life Authority Respect Authority Challenge Authority Source: adapted from Isabel Valdes Paramount Publishing, Inc., AHAA Identity Project, GFK Roper. Lionel Sosa. Felipe Korzenny.
- 18. Understanding Hispanic Cultural Values Latino American Gender Roles Machismo - provide & protect family Marianismo - sacred duty, sacrifice Gender equality is prized. Initiative Como Dios quiera. However God wants. Tread carefully. Avoid verguenza/embarrassment. ¡Dale ganas! Give it your all! God helps those that help themselves. Blow your own horn. Take the bull by the horns. Higher Education Greatest Emphasis on High School Diploma College = Fear Greatest emphasis on College Degree Source: adapted from Isabel Valdes Paramount Publishing, Inc., AHAA Identity Project, GFK Roper. Lionel Sosa. Felipe Korzenny.
- 19. Pop culture - influencing & creating •Recognize, celebrate and affirm cultural affiliations • Creating their own culture • Inspired by the past but facing the future • Spanish & English, American & Latino: you can have it both ways •Examples Plentiful • Ugly Betty, American Idol, George Lopez, Nickelodeon, YouTube, MySpace • LatinoLit - Barnes & Noble Spanish books grew 3X since 2000. • Latino Theatre: In the Heights, Celia Cruz, Macho Men & The Women Who Love Them
- 20. Economic Impact • Buying power of over $800 BILLION today....expected to reach $1.2 TRILLION by 2010! Source: Selig Center of Economic Growth • 1990s to mid-2000s were financially strong for Latinos • Disposable income and home ownership grew disproportionately among Hispanics, education rates improved Source: Global Insight, 2008 • Latinos more likely to be cash consumers than total market so high proportion are debt-free Source: CFSI, 2008 • Hispanics are price sensitive but willing to spend on value. 40% of unacculturated Latinos say they always look for a brand name vs 33% of Non-Hispanics Source: Simmons 2007/2008
- 22. Total CPG Spending Source: IRI Multi-Outlet Panel Data for 52 week ending 8/5/07 Note: % indicates difference between Hispanic Basket and Non Hispanic Basket Hispanics spending is 13% higher than Non-Hispanics Dif = +13% Dif = +1% Dif = -2% Dif = +37% Dif = -7% Dif = +10% Dif = +2% Dif = +21%
- 23. CPG Dollar Share by Channel Among Hispanic Consumers Channel 2008 Share Share Index vs. Total Panel Point Change vs. 2007 Grocery 53.4 96 0.0 Supercenter 11.9 81 1.9 Mass 10.2 122 -0.7 Club 11.0 139 0.2 Drug 5.1 91 -0.1 Dollar 1.3 93 -0.1 Other (Specialty, Convenience) 7.0 106 -1.1 Source: IRI Consumer Network™; 52 weeks ending 3/9/08 vs. prior year Mass & Club stores earn an above average share of Hisp. spending, but Supercenters are gaining ground.
- 24. •Each month, Hispanic shoppers make 26 grocery trips, 3 times greater than the General Market who makes 8.8 trips per month. • Cycle through food faster, stretches the budget, proximity of small stores in urban areas. • Most fill-in trips for baby products, frozen desserts/refrigerated treats, dairy, bakery, deli meats or cheeses • Most quick trips (speed related) for pharmacy, health/beauty/personal, pet or car care, non-food items (books, clothes, toys) or beverages. Retail budgeting behaviors Source: Unilever, Winning the Hispanic Shopping Trip
- 25. Shopping Trips Hispanics are somewhat more likely to shop early in the week Source: Diary Data: Q. What time did you start shopping
- 26. Shopping Trips Afternoon and especially evening trips are a good time to reach Hispanics In- Store Source: Diary Data: Q. What time did you start shopping
- 27. Product preferences change with acculturation Source: 2006 ACNielsen Categories Least Acculturated Most Acculturated Beer RTE Cereal Toothpaste Bodywash Soap Fabric Softener
- 29. Importance of Advertising Hispanics are much more likely than General Market to be aware of specials before going to the store Source: Diary Data: Q. If yes, where did you notice these advertised specials
- 30. Things that people always refer to when shopping in-store Hispanic Non- Hispanics Unacculturated MESSAGE/OFFERS AT THE SHELF 7.4% 5.7% 8.7% IN-STORE SAMPLES 5.7% 6.5% 6.5% ANNOUNCEMENTS IN STORE 12% 3% 14% Source: Unilever, Winning the Hispanic Shopping Trip Hispanics are more likely than non-Hispanics to always refer to offers at the shelf, in-store samples, and announcements in-store. Hispanics are more attuned to value messages
- 31. Merchandising Mandates • Know your audience • Level of acculturation • How they use your product • Brand lifecycle • Use appropriate language • Avoid slang, geek-speak • Walter Cronkite Spanish • Translate the message not the words • Understand retailer requirements • Language guidelines • Acceptable formats • Pricing requirements • Space availability/display standards
- 32. Insights into Action - 7UP Case Study
- 33. 7UP Celebrity Chef Mobile Tour & Recipe Contest • Challenge • Drive frequency of 7UP 100% Natural Flavors new product innovation and stay ahead of competitive pressure. • Insight • Unacculturated Hispanic women are heavy Lemon- Lime CSD users, but were not aware that 7UP had undergone a innovation of 100% Natural Flavors in 2007. • The natural message is highly compelling to Unacculturated Hispanic moms who want to feel they have made a better choice for themselves and their families without sacrificing taste. • The use of fresh, natural ingredients is inherent to their culture.
- 34. 7UP Celebrity Chef Tour - 360º Focus Market Integration
- 35. 7UP Celebrity Chef Mobile Tour & Recipe Contest • Merchandising Kits • Standee • Pole Sign w/info tearpads • Rack Cards • Door Posters • Neckringer recipe booklets • Danglers • Results • 100% Natural Flavors awareness doubled between a pre and post wave study (DPSG Qualitative Study, Sept. 2008.) • Campaign markets experienced a +8% sales lift.
- 36. Questions?
- 37. For more information, please feel free to contact: Becky Arreaga becky@mercurymambo.com 512.447.4440 xt 111
Editor's Notes
- Thank you for that wonderful introduction. Also joining me today on this end is April Alejandro. April is the Director of Client Management here at Mercury Mambo. She too has worked in the industry her entire career, focusing on turning strategic insights into actionable marketing programs. April has been with our agency for over 3 years and has been responsible for developing not only our client management teams but also building our field marketing expertise.
- Let me start today by telling you a little bit about our agency, Mercury Mambo. We are full-service Hispanic marketing agency with an expertise in delivering below-the-line marketing programs rooted in consumer and marketplace insights. This focus really allows us to build marketing programs from the ground up utilizing marketing tools designed to effect immediate sales as well as brand awareness and brand image. We have a highly creative and motivated group of 22 marketing professionals based in Austin, TX as well as a network of market ambassadors in the top 25 Hispanic markets. These market ambassadors serve as the foundation for not only our in-market program activation, but provide on-going consumer and marketplace insights through a proprietary research tool we have called HispaniPoll.
- We view our primary mission to Motivate Hispanic Consumers to take action! And we do this where our consumers work, live and play.
- Over the 9 years, we have been fortunate to do this for some of the country’s top brands.
- Regardless of political affiliation, the significance of the changing face of America has never been more apparent than it was in this last election. Washington analysts attribute Barak Obama’s 8.5 million-vote margin over John McCain to a more than 20% surge in minority voting. We saw a 21% increase in African American voting and a 16% increase in Latino voting. Over the next few slides we’ll share some demographic data that illustrates this changing face. According to study by Project Vote, African-Americans cast nearly three million more ballots nationwide in 2008 than in 2004 an increase of 21 percent. The total votes cast by Latinos went up by sixteen percent - more than 1.5 million - and young Americans aged 18-29 cast 1.8 million more votes, a nine percent increase.
- The 1940’s truly were the “Leave it to Beaver” years. Over 2/3’s of the US Population at this time were non-ethnic in other words Anglo Americans. Fast-forward 40 years and you begin to see this percentage shrinking drastically. Time Magazine proclaimed the 1980’s would be the “decade of the Hispanic” and as you can see, that decade of growth, prosperity and opportunity has continued to gain momentum.
- I believe these next three slides provided by a research firm called Geoscape truly illustrate how and where the face of America is changing. The blue boxes represent the Hispanic population as a % of the total pop. In the 1990’s you see the greatest concentration of Hispanics, as represented by the darkest blue boxes, not surprisingly located throughout the Southwestern US and on up into the Washington area, essentially following an agricultural path, with families settling down in those cities.
- By 2000, we see the concentration of Hispanics move throughout the Southwest into primarily the Western US, into Florida and moving along the Eastern coast as well as central states of Illionis, Wisconsin, and Southern Michigan. These trends follow the construction and tech booms where we saw an increase in job opportunities in not only construction but also service industry professions.
- And six short years later the migration continues move into the Western and Central regions of the country. North Carolina and Georgia continue to attract Hispanics as well as pockets throughout Alabama, Tennessee and Arkansas.
- So where do we go from here? These projections provided by the US Census continue to show a steady, significant growth over the next 40 years. It’s important to remember here that this growth is not just a result of immigration, which as you may know has been slowed significantly as a result of the current economic downturn. Although some first generation Hispanic immigrants have even headed home and new immigration slowed, most current immigrants stay on in this country and it’s estimated that their children, the second generation will eventually outnumber the first.
- When you first look at the opportunity, it can seem like a daunting task. You may be asking yourself…if Hispanics are essentially everywhere, where can I begin? From a target market perspective, you can look the numbers from a few different ways. Each perspective has it’s own nuances. First, you can look at the Largest markets, those states with the largest Hispanic population. These states house the large urban centers like LA, NYC and Chicago. From a marketing perspective these can often be expensive markets to enter, but eventually the payoffs can be big. You can also look at Concentrated Markets. Here Hispanics comprise a significant percentage of the states overall pop. Often times, these markets tend to be well established Hispanic centers, with a mix of first, second, third and even sometimes fourth generations. Acculturation plays a factor in how to best address these opportunities. We’ll talk more about this on the next slide. And finally, you could look at the Growing Markets. Growth in these markets has been primarily driven by the construction industry, factory and service industry jobs. While growth may not continue at the current rate, many of these consumers will likely remain in these areas. Marketing opportunities here tend to be less expensive.
- Within all of these markets, you’ll find Hispanic consumers of varying acculturation levels. Acculturation is defined as “a process in which members of one cultural group adopt the beliefs and behaviors of another group.” It’s important to note the difference here between Acculturation and Assimilation. Assimilation is the process in which one is absorbed into the dominant culture, with acculturation you are adopting beliefs and behaviors. For the most part, this dynamic is one of the most important thing that differentiates this immigrant group from those in the past. Where as the Polish, Russian and Italian immigrants of the 1900’s assimilated into mainstream society, this has not been the case with Hispanics. The primary reasons for this as: For some, the Journey to the U.S. is very different. As comedian George Lopez says, I didn’t cross the border, the border crossed me. Large numbers of multi-generational families that maintain a rich heritage and deep roots in certain areas of the country. Due to the proximity of many of their home countries (Mexico, central America, Puerto Rico), many immigrants are able to move back and forth across the borders seamlessly and frequently. I am not only speaking of illegal immigrants but more importantly second generation families with parents and grandparents returning or living in their home countries. This cross-cultural lifestyles allows families to maintain both the language and cultural traditions. And finally, the proliferance of Spanish-language media in the U.S. In the 1920’s, English radio stations were programming blocks of Spanish language music and news during key timeperiods and the first full-time Spanish language radio station went live in 1946. By 1961, The first Spanish Language television network, SIN hit the air. Today, Univision TV network has grown into the largest Spanish language media enterprise including TV, radio, online and entertainment properties. Telemundo, the nations’ second largest Spanish language network is owned by Universal NBC. So clearly, this cultural lifeline is not going away. Ok, so as you can see………. • Bicultural consumers represents the largest population segment……. (CONTINUE EXPLANTION OF INSIGHTS)
- As Hispanics become more prevalent in popular culture, we’ll continue to see those values shared previously reinforced and strengthened in many ways. If any of you are fans of Ugly Betty, you see how her fortitude is a direct reflection of her family values. Another example that we are watching closely is the rise of social media networks among Latinos. Staying connected to family and friends is a critical component of Hispanic lifestyle. Online social networks by design support this cultural behavior. One great example of this in action is an organization called Las Comadres. Among Latinas, your close circle of female friends are called your Comadres. This organization was created with the sole purpose of providing an opportunity for Latinas to meet and socialize with other Latinas. They host monthly “comadrazos” at their homes, eat, mingle and help each other out. The interesting twist here is that while this is very much an offline social network, the communication and connectedness is all conducted online. Their mission is Connecting and Empowering Latinas everywhere through community building/networking, culture, learning, and technology. And currently their network reaches over 5,000 Comadres across the country.
- The economic impact of this consumer segment has continued to grow in step with the population. Current buying power is over $800 billion and expected to reach a Trillion in 2 short years. But, while the past ten years have been financially strong for Latinos, the current economic crisis has hit this population exceedingly hard. From April ‘07 to April ‘08, the labor department reported the unemployment rate among Hispanics had spiked 1.4 percentage points, to 6.9%. In comparison the overall jobless rate rose only half a percentage point, to 5%. And, while Hispanics had enjoyed growth in homeownership, almost half of the loans issued for home purchases by Hispanics were sub-prime, nearly double the rate for non-Hispanics. So, these hard times will definitely impact Hispanics. We’ll see belts tightened and large purchases delayed significantly. This summer, I was meeting with a large grocery retailer that caters to the Hispanic market in Phoenix and he shared that they first feel the impact in the meat department where families begin to purchase less expensive cuts of meat. Once they see that trend, the store immediately alters their sales strategy. So while we’ll start to see some purchasing behaviors like this begin to shift, there are some macro-trends to keep in mind.
- Hispanic spending across all outlets is roughly 13% higher than that of non-Hispanics. Much of this is attributed to larger family and larger household sizes among Hispanics. Interesting to note here is that while spending is concentrated primarily in the food channel, mass and club stores maintain a significant appeal among Hispanics. (NOTE: $299 COLUMN REPRESENTS CONVENIENCE)
- And while Mass and Club stores earn an above average share of Hispanic spending, Supercenters are definitely gaining ground. Much of this growth can be attrtibuted to the increased efforts against this consumer segment by Wal-Mart and Target. For example, beginning in 2008, Wal-mart was able to extend it’s holiday sales season by implementing a Three Kings celebration the first week in January in over 500 Hispanic stores across the country.
- Overall Hispanic shoppers are making more trips and spending more money at grocery retailers than their non-Hispanic counterparts. A recent study indicated that 16% of Hispanics sited “getting in & out quickly” as important compared to 39% of total non-Hispanic shoppers. For this reason, we are seeing more and more chains converting to Hispanic store formats. Most recently, Sam’s club announced the creation of a new Hispanic targeted store format in Houston called the “Mas Club Store”. This store will feature more fresh produce, meats, Hispanic foods, drink and spices. Ironically enough, Mas not only means More in Spanish but is also Sam spelled backwards.
- Unlike their general market counterparts, Hispanics are more likely to shop earlier in the week. Some of this may be a result of pay-day shopping but also frequency of trips, and the trend towards viewing the grocery retailer as a destination. In this instance, we see grocers offering more services and shopping options in an effort to draw customers. Hispanic consumers begin viewing retail visits as low-cost family entertainment options.
- In regards to time of day, Hispanics are shopping all day parts but tend to lean more towards afternoon and evening shopping.
- This chart reflects the product purchase behavior nuances evident across acculturation levels. Across most product categories, you’ll find unacculturated consumers gravitating towards those products familiar from their home countries, in other words, global brands. As consumers become more acculturated and introduced not only to new brands but also new product formats, we begin to see shifts in purchase behaviors. For example, throughout Latin America, liquid fabric softeners are the format of choice back home, dryers sheet are less familiar and less available.
- Hispanics overall are much more likely to know which brands of products they are going to buy before shopping. They are more aware of retail specials and deals before going to the store. In many cases they are choosing their retailer based on the specials. In other words, Hispanic shoppers are going in with a true game plan. But that’s not to say it can’t be altered once they enter the store.
- Hispanics overall are also more attuned to value messages at the shelf, via store announcements and as a result of in-store activity. And when you look at unacculturated consumers, these value messages are even more critical. The recently released TNS Shopper study indicated that 34% of Hispanics claim to be influenced by in-store ads and coupons versus 14% of total shoppers. This fact alone supports the need for targeted merchandising efforts, in-store sampling and in-store couponing efforts.
- One of the primary reasons we started our agency 10 years ago, was that we saw a tremendous opportunity to help marketers make their in-store messaging more effective. Back then, we realized that marketers were delivering the same point of sale to stores located east LA as they were stores in Beverly Hills. There was a tremendous disconnect to consumers, actually no connect. So in essence, brands were leaving money on the table by not communicating to these consumers. Even if they were advertising on Spanish language radio and TV, their was no communication being made at the store level encouraging consumers to pick your brand over the one next to it. Since then, we have worked closely with marketers to make both copy and program content relevant and impactful. Here are a few guidelines to help your teams: This should be number 1 and number 100. Know your audience…. (CONTINUE THROUGH SLIDE)
- Thank you again for your time and please feel free to contact me directly should you have any additional questions. Thank you.