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Double Store Traffic-Part 5: Hispanic Marketing

Furniture World Magazine


Part 5: How You Can Profit From
The Growing 1 Trillion Dollar Hispanic Market.

Everyone knows traffic is down. Times are tough for retailers across the nation. The housing market stinks, Re-Fi’s are non-existent, and the sub-prime debacle has people running for cover. Throw in the never ending war, presidential primaries, back to school and the looming recession, and what do you get? SLOW SALES.

But amidst all this turmoil there is a silver lining. There is a huge group of people who live in all areas of this country with money to spend, and the desire to spend it. “Where are they?” you may be thinking. But if you read the headline to this article, you already know…

It’s the Hispanic or Latino market. Now before you turn me off thinking “I don’t speak Spanish,” or “ I don’t have any bilingual staff,” just hear me out.

Targeting this market isn’t as difficult as it might sound... even if you don’t speak a word of Spanish. An even better reason is that marketing to this demographic is one of the best ways for independents to substantially increase sales with relative ease.

Let me take a minute to establish my personal credentials in this area. I am lucky enough to have learned Spanish by spending 2 years in Santiago Chile. My wife is second generation Hispanic on her father’s side. My brother married a woman from Latin America who’s family immigrated here just within the past 5 years.

The Latino market is diverse. It is made up of native born Americans and immigrants who have roots in many different countries. The group is certainly not monolithic in their buying behaviors, but for the purpose of this article, some generalizations can be made.

But before going any farther, let’s introduce seven reasons why you should at least be considering targeting this market segment.

Seven Reasons To Target The Hispanic Market

The first reason is simple. There is money in this marketplace. Lots of it. In 2008 Latino spending power in the USA will top 1 Trillion Dollars. That’s significant by anyone’s standards.
Many fortune 500 companies have started targeting Hispanics successfully for some time. Companies like Nextel, Proctor and Gamble, and many others. The great news for furniture retailers is that there are no dominant players that target this market segment either on the manufacturing or retail side.
There are over 45 Million Hispanics living in the USA. This equates to close to 20% of the population. There are more Hispanics in America than there are people in the entire country of Canada!!

That number grows larger and larger every year. Not with illegal immigrants mind you, there are more native born Latino’s in this country every year, than there are immigrants. This could be 20% - 30% or more of your customer base (depending on where you are located of course). So if you have a decrease in traffic, and you don’t have Hispanics in the store, this may be one of the reasons.

And don’t think that just because you aren’t in the southwest you don’t have Hispanics in your communities. There are large populations all over the country. You may want to check the US census to get more information on your specific area at www.census.gov.

Latino families are larger than average. In fact the average family size is much larger in the Hispanic market than any other ethnic group. This means more homes being purchased, more furnishings, more beds to buy.

Hispanic median income is growing faster than any other market segment. Every couple of years Hispanic median income jumps dramatically. They are, in general, hard working people who want to live the American dream. Sell that to them, and they will buy!

Contrary to what you might believe, they aren’t just cheap price buyers! This might surprise you, but it’s true. Latino’s are more concerned with buying a brand they recognize, something that has a good value, than a cheap price.

One of the reasons for this is because they don’t want the hassle of having to return something, or deal with the uncomfortable situation of talking with a customer service person in a different language.

They work hard for their money and they want to make sure they are buying a product they can count on to be high quality.
They respond to marketing!

Did you know that Hispanic households get one piece of mail for every 10 that the typical American receives?

That’s right. Think about it this way…on those days when you get 10 mailers in your box, they are only getting one. Many days they get nothing!

When your direct marketing piece arrives in their mailbox, ALL BY ITSELF don’t you think that it will have a good chance at being read? Check out these statistics from Vertis Communications.

64% of Hispanic adult consumers responded to direct mail in the last 30 days versus only 46% of the total U.S. adult population.

Hispanics who speak primarily Spanish at home are even more likely to respond to direct mail (a whopping 70% rate) in the past 30 days.

Jim Litwin, vice president of market insights at Vertis Communications said “We are finding that more Hispanics are reading direct mail advertising than non-Hispanics. Findings also reveal that direct mail response rates are higher among those who primarily speak Spanish inside the home, indicating the need for marketers to continue creating bilingual marketing pieces. U.S. direct mail is predominantly English, so when Hispanics do see bilingual pieces in their mailboxes that speak their language, the urge to respond is significantly higher.”

And it get’s even better…

The Vertis study continues: “While readership for other forms of direct mail varies, retail direct mail remains popular throughout, with 69 percent of Mexicans and 70 percent of non-Mexican Hispanics surveyed indicating they read retail direct mail.”

Now how do you get them to respond.. to come in and buy? Hispanics are much more responsive to coupon offers and gift with purchase offers, than typical Americans. This makes sense when you think about all the many offers, and marketing messages typical Americans have been receiving for the past 50 years. Hispanics just don’t have the amount of attention given them by businesses… YET.

“Of the Hispanic adults surveyed who read retail direct mail, 43 percent indicated they’ve responded to direct mail advertisements that offer a gift with purchase, compared to just 31 percent of the non-Hispanic population.”

They refer like crazy. We all know how valuable referrals are, that they yield better, more profitable customers and that they are certainly much cheaper to acquire.

The urge to network is a characteristic of Hispanic culture. They typically have lots of friends, like to give parties, and share with each other. You can bet that popular topics of conversation include the latest store they’ve found, or an experience they had while shopping. This is a point not to be missed. If you upset any customer, you will get at best, negative word of mouth, and at worst, have created a vigilante customer. This effect is magnified in the Hispanic marketplace. On the other hand, if you give impressive service, you will earn a steady stream of repeat business and referrals for life.

The Worst Thing You Can Do!

Recently a local bedding store ran an ad in a Spanish newspaper. I noticed that in the very first line of text was a word “Avalible”. Only one problem... “avalible” is is not a Spanish word.

When asked how his ad performed, the store manager quickly said it did poorly “but that was my fault,” he said, “I did a poor job on it.” I’ll say! Nothing says “go away” like using words in another person’s language, that aren’t words.

So, be very careful when you choose who does your translating. Most fluent Spanish speakers aren’t qualified to translate or create ads in Spanish. You want to hire someone who is highly qualified.

One of the worst things you can do is to directly translate an ad targeted to your English speaking clientele. Hispanics buy differently than the typical Anglo (Of course this depends on their individual level of acculturation, or americanization).
One of the best things you can do is include both English and Spanish on the same marketing piece. In many households there are people who read both, so cater to them in both languages.

How do you find someone to translate for you? There are several options. If you need help and need a referral, send an email to brettk@furninfo.com.

Working With Hispanic customers

If you are dealing with Spanish speaking people who don’t speak any English, they will most likely be very timid at first, not wanting to make a mistake. And when they enter the store they’ll feel a little shy.

What they really want, is to feel like they will be taken care of. To be welcomed and treated well. If your salespeople can simply “put their arm around them” and treat them well, they will be loyal customers for life.

If you plan to cater to this market, it is best to have someone on staff who is bi-lingual. Your bi-lingual salesperson doesn’t need to be highly trained in sales techniques. Look for someone who has a warm personality, and can create relationships. That’s where your money will be made in this market. For this reason, don’t be surprised if the average sale takes longer to complete. Building trust can take some time.

Once you’ve established a bond of trust, your new relationship will be immensely profitable for years to come. So don’t jump on your salespeople if they spend some extra time chatting with their Hispanic customers!

But that’s not all. Latinos are more likely to refer friends and family than just about any other ethnic group. Plus, they love to shop together. So when planning to bring Hispanics into the store, count on 4 or 5, not just 1 or 2.

Shopping can be a fun event for them, a group activity. This is certainly a marketing plus because it becomes possible to get multiple returns from a single marketing piece!

Now Is The time to act

Every good opportunity, usually affords only a small window of time, through which incredible success and profits can be achieved.

There will always be opportunities. Some are easy to see and take advantage of, others aren’t. If you are an independent furniture retailer, you now have one of those rare, million dollar opportunities staring you in the face.

The door is closing quickly as more and more companies are jumping on this bandwagon. Corporate America has taken notice, and is coming out with guns blazing.

BUT…the home furnishings industry is wide open. There is no major player. No BIG BOX store that is dominating this marketplace.

You may think Wal-Mart is, but that is simply because they do some advertising on Spanish TV and radio stations. They aren’t really providing any specific value to that customer. People only buy from Wal-Mart because they don’t know anywhere else to go.

Besides, Wal-Mart will never be able to really compete in the Home Furnishings arena. The inventory is too large, and the turns are too slow.

The time to act is now. Wait for 6 to 12 months, and you will find that other competitors have beaten you to the punch. However, Hispanics are loyal to brands and companies they know. That pays huge dividends if you are the market leader and establish a reputation in their communities. Other competitors can come, but you’ll always have a leg up because you were first.

If you want to see more information on marketing to the Hispanic market, you can request a free Hispanic marketing package and audio program. Just visit the website www.explodestoretraffic.com/spanish for more information.

Muebleria Continental
“La Amiga De Su Hogar”

Continental Furniture has three locations in the Chicago area. The stores cater to a largely Spanish speaking demographic and provide quality, name brand furniture at affordable prices
Founded by Ray Portugal, the stores are operated by his sons Gary and Mitch.

Rosa E. Terrazas, Continental Furniture’s Marketing Manager, noted that, “Our customers typically shop for furniture by the room-full, which means they don't come only to purchase one sofa or one table. They purchase a complete package. Electronics and appliances are two other categories we carry. Name brands are Sony, Panasonic, Phillips and Frigidaire. We also carry computers-notebook and desk top; Sony and HP.”

Continental relies heavily on direct mail promotions and their postcards are bi-lingual in Spanish and English. This, continued Ms. Terrazas, “is because the majority of our customers feel most comfortable doing business in Spanish and they value our employees who speak their language. All of our sales staff and about 90% of all customer service, finance and warehouse employees are bilingual.

“One more thing,” she advised FURNITURE WORLD readers, “they are willing to pay more for quality and service; and they are very loyal. If they have a positive experience in your store the first time, they will continue to do business with you.”

Continental’s Credit Department offers easy credit and affordable payments. They approve a remarkable 90% of their applications and take pride in their their “friendly” collections department.

Customers who buy on credit come into the store every month to make their payments. Continental Furniture views this as an opportunity to reinforce relationships. “Sales associates,” says Ms. Terrazas, “are happy to see them every month because it gives them a chance to chat and sell them other merchandise. Many customers add-on to their accounts before paying off the balance.”

The company participates in community venues throughout the year. They hold three Community Health Fairs thru Hispanocare in their retail stores, that offer free health screenings. They also give out a scholarship to a student that is pursuing a career in the medical profession and also sponsor local baseball and soccer leagues.  Visit their website at www.muebleriacontinental.com for more information.

Brett Kitchen and Ethan Kap are Co-founders of Furniture Marketing Systems, and are commonly known as the “Traffic Guys.” Brett and Ethan run a retailer Marketing Mastermind Group to help retailers increase store traffic and sales, while cutting the fat and waste from current advertising. They don’t sell advertising services. Questions on any aspect of direct response marketing can be sent to Brett and Ethan care of FURNITURE WORLD at bretk@furninfo.com.

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