Destination + Impulse - How to Influence and Guide Hispanic Shopper Behavior

How to influence attitudes and motivate shopper behavior

in the Hispanic market

Patrick Rodmell [email protected]

Destination + Impulse

“Do NOT touch merchandise on display”

“Do NOT bother the staff”

“Ask for assistance ONLY IF you are going to make a purchase”

“Do NOT thank the staff for a free look”

“Do NOT complain about the hours of operation or make personal enquiries”

Destination: What NOT to do

Impulse: What NOT to do


I’d rather die of pneumonia than

deal with the headache of choosing the right

medicine!


What drives a “Destination”? What motivates “Impulse”?

Most importantly, how are they connected in our new Mobile World? How does this apply to the Hispanic Consumer/Shopper?


Watt International: what we do

Shaping retail in Latin America for over 20 years


Soriana slide?


“Launched in June 2009, the Supermercado de Walmart is already exceeding expectations.” (Source: Wal-Mart press release)

Defining Hispanic retail in America

Sample Strategic Support: Recommended Allocation of Fresh Area

Retailers Serviced Meat (linear ft)

Packaged Meat (linear ft)

Serviced Fish (linear ft)

Serviced Bakery (linear ft)

Produce

(linear ft)

Dairy (linear ft)

Serviced Deli (linear ft)

Torilleria (linear ft)

Cocina (linear ft)

Food City 55,000 sq. ft.

32’ 80’ 28’ 36’ 80’ wall 560’ (total)

153’ - 36’ 48’

Superior 33,000 sq. ft.

48’ 100’ 32’ 36’ 80’ wall 560’ (total)

60’ - 8’ -

Ranch Market 25,200 sq. ft.

48’ 56’ 36’ 60’ 60’ wall 316’ (total)

43’ 24’ 24’ 60’

Vallerta 20,000 sq. ft.

24’ 36’ 12’ 24’ 100’ wall 332’ (total)

51’ 24’ 16’ 26’

El Super 14,000 sq. ft.

36’ 40’ 12’ 24’ 80’ wall 240’ (total)

130’ 36’ 24’ -

Recommendation for WM

Importance for WM

Conclusion: •  Recommended allocation for Fresh area is x% of total sales area.

•  The specified area and categories recommended are a sub-set of recommended x%. •  Area allocated for Win categories meets or exceeds average allocated linear feet. •  Area allocated for Play and Show categories meet or are below average allocated linear feet.

Process for recommending area allocations: •  Area for recommended allocations have been compared with Hispanic retailers audited. The purpose was to ensure best fit and

relevance for Wal-Mart to target Hispanic consumers. •  Categories classified as Win, Play and Show were based on audit of Hispanic retailers, analysis of consumer research and Hispanic

food spending study.

Influencing attitudes; motivating behaviors

bridging the gap between:

Left Brain + Right Brain

Every consumer decision is driven by a combination of emotional and rational influences

What are the factors that make the Hispanic Consumer/shopper unique?

Some fresh thinking to consider…

1.  The Hispanic consumer/shopper: What we know

•  50 million Hispanics in the US, from 20 countries, representing one in every six residents (+42% since 2000)

•  Geographically concentrated – 50% California and Texas; 76% in eight states

•  Younger, traditional, family-focused

•  Typically make a higher rate of Major Stock up and Fill-in trips, and far fewer Quick trips

•  Hispanics are adopting the internet twice as fast as the general market – 14 % growth vs. 7 percent.

The growing Hispanic population in America: bringing new challenges and opportunities for retailers

Large families   Half of Hispanic households comprised of 5 or more   Multigenerational and extended families often live together   Hispanics tend to shop and make decisions as a group

Focus on Kids   53% of Hispanic households in U.S. have children at home   Latinos spend more on children’s clothing and toys than the

average population   25% of Hispanics in U.S. are younger than 18 (34% in California)

Link with extended family in USA and abroad   Geographic proximity makes frequent travel to the country of

origin easy   48% of Californian Latinos are likely to send money to family

back home and across the country

The growing Hispanic population in America: More family-focused

Hispanic Consumer in the USA

Isolated   First generation, foreign born   About 10% - 13% of Hispanic population

  Working class who migrate to U.S. for economic reasons

  Most never completed high school   Little or no English proficiency

  Tend to locate close to family and friends   Plan to someday move back to the country of

origin

  Consumption patterns similar to place of origin – most divergent than U.S. general population

  Tend to operate on a cash basis   Rely on public transportation rather than owing

cars   Have limited access to technology such as cell

phones, computers and internet   Don’t have health or other insurance

Hybrid/ Bicultural   Middle class foreign born   Children of immigrants parents

  Represent 55% - 57% of Hispanic population   Higher level of education   Greater English proficiency   Spanish predominant (75%)

  Higher income, employed in blue/white collar occupations

  Do not tend towards a simple/single demographic

profile   Are the largest and fastest-growing segment (an

annual rate of +11.9%)

Integrated   Third generation   Speak less or no Spanish

  Consumption pattern similar to general U.S

  May or may not identify themselves culturally as Hispanics

  Around 22% of Hispanic population

  Smaller families   Lean toward individualism   Self oriented

Hispanics tend to acculturate more than assimilate

Isolated Hybrid/ Bicultural Integrated

Hispanic Consumer in the USA

Relatively unacculturated Partially acculturated Mostly acculturated

Hispanics tend to acculturate more than assimilate

Today’s opportunity

Images of children to drive family inspiration

Hispanic Cultural Characteristics

Regardless of level of acculturation, Hispanics;

• Stronger attachment to, and a sense of pride in, heritage

• More positive feelings and respect for the elderly

• Give greater importance to holidays and celebrations

• Have more family meals and drink less alcohol

• Pay more attention to fashion, grooming and appearance

• Appreciate the personal nature of close relationships.



2.  Creating stores as “Destination”

Hispanic Shopping Behavior

Trip Drivers

Source; Unilever Research

What makes this an “amazing retail experience”?

Products, People and energy!

Service Hispanics respond strongly to personalized service, whether to:

  assist in overcoming language barriers   establish personal connections   achieve status

Product sampling and one-on-one personal communication are particularly effective tools for converting sales with Hispanic consumers.

Company Executives = 80%

Customers =

Question: How many brand experiences demonstrate “Superior Service”?

Service Perception

8% Great service can overcome a bad store; a great store can’t overcome bad service

Seasonality

•  70 nationally-recognized holidays vs. 43 in the US

•  Gift giving is much more common within the Hispanic community (e.g. Valentine’s Day)

Affordable Children’s Toys •  Hispanic moms like to reward their children with inexpensive toys •  teenagers like to buy trinkets to show their affection to each other

Beauty + Personal Care

•  Attitudes towards beauty intertwined with aspiration, and use brands to derive emotional satisfaction

•  Image of beauty focused on full bodies over faces only

•  Celebrity endorsements elevate perceptions

•  Hispanics retain strong separations between gender roles and attitudes towards personal care.

Walgreens Express Makeover Virtual makeover booth at Walgreens features a built-in camera for customers to take their picture and experiment with various looks while in store.

Hispanic Shopping Behavior

Market Perception

Source; Unilever Research

Vallarta

El Tapatio

El Super Ranch Market

HEB Mi Tienda

Carnaval

Superior Warehouse

Food City

Fiesta

Store Design/ Layout •  Merchandising (departmental signing and decor) was simple with a credible, rustic Mexican feel. •  High lighting levels brought out the color of the produce and made the environment seem fresh and bright. •  There was a large and impressive cremeria with an array of fresh cheeses, yogurts, and a large dairy offering.

•  The cocina area is in adjacent to the store and is combined with the bakery, coffee shop, aguas frescas, hot table and a tortilleria.

Hispanic Neighborhood

Vallarta Supermarkets

Marketing Advertising Website Social Media Promotions

HR Recruitment

Retention Training

Incentives Rewards

Business Planning Store Formats Store Operations Price Programs Supply Chain Strategic Partnerships

Offering National brands

Private label Services

Brand Image Name

Identity Colors, Fonts

Internal Communications

Public Relations Sponsorships

Events Launches

Store Environment Architecture Décor Layout

Creating integrated brand experiences

As a CPG, make sure you understand your customers’ brand strategy, particularly as it relates to the Hispanic market

PRX!Personal Retail eXperience!

social

rewards

access

entertaining

Creating destination through PRX



2.  Creating stores as “Destination” 3.  Driving “Impulse”

Is it Destination or Impulse?

1.  49% of U.S. Hispanics who watch television during prime-time hours, watch Spanish language programming

2.  Listen to the radio 13% more than the rest of the population

3.  Welcome direct mail as a means of becoming a more informed consumer - 3.5 times more likely to respond to a direct mail solicitation than a non-Hispanic household

4.  38% of Hispanics surveyed found English language ads less effective than Spanish ads in terms of recall and 70% less effective than Spanish ads in terms of persuasion.

The growing Hispanic population: Media influences on shopping behavior

Source; Heinrich Hispanidad

Whatever the case, the package still rules!

But don’t let historical truisms lead you astray

Driving impulse through strategic cross promotion

45%

32%

23%

38%

28%

34%

Insight:

The flavor combination changed the participants ranking of the CSD beverage, suggesting that a consumer’s enjoyment of a CSD beverage is effected by the food it’s paired with.

Question:

Which beverage do you prefer?

Question:

Which combination of beverage and chip do you prefer?

Experience Mapping: the RIGHT message, in the RIGHT place, delivered in the RIGHT way

Self-Service Vending Machines Driving Impulse: bringing retail to the people

Papa John’s

http://espanol.papajohns.com

A greater proportion of Hispanic customers place orders using cellphones.

Hispanic shopping behavior – new media

Tesco’s Home Plus grocery stores in South Korea have posted virtual stores in Korea’s subway system, enabling commuters to shop using their smartphones to scan a QR code, while they wait for their train.

Attracted 10,000 new shoppers and raised online sales by 130 percent.

Driving Impulse: bringing retail to the people

Virtual Coupons

Virtual butterflies appear on consumers phones as they approach one of the participating shopping centers. Shoppers must “catch” the butterflies in order to activate the coupons.

Driving Impulse: virtual coupons

Catering to Hispanics: what’s out there The most common tactics employed by US retailers involve:

•  Adjusting the environmental to create a warmer,

more festive décor

•  Adjusting plan configurations to provide a

meandering, market like atmosphere

•  Providing bi-lingual way-finding and environmental

graphics programs

•  Providing and identifying Spanish speaking

associates

•  Providing community based programs and Spanish

language solution centers.

•  Sensory engagement – demos, sampling, motion, music, touching, etc. will all support destination AND impulse behavior in Hispanics

•  Focus on New Media – digital and mobile should be key areas of focus

•  Seasonality + Service – key opportunities to connect and be relevant.

Other winning strategies to consider

Perdido en la traducción: Don’t just translate content into other languages –

connect with your Hispanic customers in a relevant way.

Gracias por su tiempo!

Patrick Rodmell [email protected]
