Article

Think globally, sell locally

Ethnic products reach a larger audience than ever before.

June 24, 2008

Dave Partee knew he found the perfect fresh produce for his Louisville, Ky.-based Valu Market when his Cuban customers wanted to buy it even before he could get it unpacked.

Co-manager Partee spent months searching for products that appealed to the ethnic population. Initially falling prey to a common retail mistake, Partee brought in Tex-Mex products to satisfy his Hispanic customer base. When those flopped, Partee realized his net was too wide. Talking to the shoppers in his store, Partee zeroed in on the foods and products that appeal to the Caribbean-influenced Cuban population.

The U.S. Census Bureau reports one-third of consumers are part of an ethnic group, but, as Partee learned, within any group there's much diversity.

"Groups are not monolithic," said Anne Brouwer, senior partner with McMillan Doolittle, a Chicago-based retail-consulting firm. "If an apparel retailer is targeting Hispanics, the clothing assortment should be different if the store is in Miami rather than Los Angeles."

Research pays off

With the continued growth in numbers and buying power of various ethnic groups in the United States, retailers must get to know their new customer base to create a retail experience that's culturally engaging and relevant. Many retailers have made efforts to appeal to ethnic shoppers, from installing bilingual signage to stocking more clothing choices in smaller sizes to fit adults of slight build. Retailers have to be aware of the demographic shift that's changing the retail landscape in most parts of the country.

"If you combine ethnic groups, what used to be the majority is no longer the case," said Andrew Erlich, Ph.D., president of Erlich Transcultural Consultants in North Hollywood. "Marketing to ethnic groups is not simply a nice thing to do, it is going to be necessary for companies to thrive and survive."

Effective, actionable research will point out behaviors and habits that a retailer should take into account. For instance, how important is credit and financing to a particular group? Are they more likely to pay with cash or by other means? Does the shopper like to touch the items before buying? What is important in food shopping: familiar brands, freshness or price?

Scarlett Wesley, an assistant professor in the department of merchandising, apparel and textiles at the University of Kentucky, studied Hispanic shoppers in 10 cities and their experiences and desires in the American retail market. One of the most startling differences in the behavior of much of the Hispanic population is that shopping is a family entertainment event. Multiple generations of the family will go to the mall to eat, shop and spend time together.

By contrast, many stores are geared to get shoppers in and out as quickly as possible. "Typically, Americans see shopping as a drudgery, but we found that Hispanic shoppers see it as way to connect with family," Wesley said.

Creating a retail environment that's welcoming to Hispanic shoppers can take many forms, beginning with basic steps such as bilingual employees and signage.

"In the pharmacy, it's critical customers understand how to use over-the-counter medicines," Wesley said. "Many Hispanics find it extremely frustrating if they can't talk to someone."

Cultural connectivity can include more subtle changes, such as making sure there's enough room to navigate a stroller through the aisles and room for many family members to gather around to make a decision.

Dale Early, owner of Deerbrook Chrysler/Jeep in Kingwood, Texas, put a "La Familia" room in his dealership to accommodate the family members that typically tag along to buy a car. "Typically the matriarch and the patriarch come along, so you have to have a room where we can get large groups together to make that decision," he said.

Sometimes only experimentation will tell a retailer how to reach a certain population. Back in 1996, J.C. Penney decided to target Chinese and Vietnamese females ages 25 to 49 in northern California. The strategy targeted women who typically are the shoppers and decision makers in the Asian family, who also are price conscious. Sales, promotions and sweepstakes initially drew the budget watchers to the stores. The chain started building promotions around important Asian holidays such as the Lunar New Year, which grew sales at twice the rate as overall store sales during the promotion.

"Retailers have to investigate where the opportunities are, keep their eyes open and listen to the community," Erlich said.

All some retailers have to do to make culturally relevant adjustments is look out the window. When Kohl's expanded its department stores from the Midwest to the Southwest, the differences in climate forced it to retool its clothing offerings for the southern California locations. "Once they were up and running, they had to fine-tune their assortment and be more differentiated in the products, colors and sizes," Brouwer said.

Committing to serve

Back in Louisville, the ethnic market was so important to Partee that he totally revised his store, one of five in the independently owned chain. Previously, the specialty foods were stocked by ethnic origin across three aisles of the store, separated from the traditional packaged goods, produce and meat.

In December 2007, a grand re-opening celebrated the new layout. Now, most of the specialty foods are stocked within the category: beans in the bean section, flour in the baking goods section. A few items defied categorization and remain in their own section but, for the most part, shoppers cruise the whole store to find their favorites. "We get cross shopping with the American food, and the ethnic population can compare everything," Partee said.

It took some detective work to find distributors for the ethnic foods. Valu Market even signed up to be a regional distributor for a number of products to pass the price savings on to consumers because it otherwise couldn't match the price some of its Cuban shoppers were used to paying in Miami. "They knew what the price should be [for the product] but, by the time we finally got it up here, we weren't even close," Partee said.

Saturday mornings at the store sound like a meeting at the United Nations, with shoppers from Bosnia, Africa, Cuba, Vietnam, the Middle East and other lands conversing in their native tongues. "It's cool to hear 10 different languages as you're walking through the store," Partee said.

A simple way to gauge the effectiveness of cultural efforts is to pay attention to who's coming into the store. Ethnic communities are known for quickly spreading word of a bilingual clerk or a store that carries familiar products from home.

In her study, University of Kentucky's Wesley found that Hispanic shoppers appreciated any effort to accommodate their needs, whether it was a home run or not.

Gary Wollenhaupt is a freelancer and regular contributor to Retail Customer Experience magazine.