The 2008 Google Zeitgeist is out and seems to backup some of what we’ve been seeing at The Mambo – Facebook is gaining popularity among Spanish dominant users.

On February 7, 2008 Facebook launched its Spanish version. Since then, we’ve been noticing a lift in Hispanics on our own pages and with our own friends both from the U.S. and from other Latin American countries.

According to the Zeitgeist, Facebook is highly ranked as one of the fastest rising sites in all Latin countries that made the list. “Fastest rising” means that Google looked at the most popular searches conducted for 11 months of 2008 (compiled by early December) and then ranked them based on how much their popularity increased compared to 2007.

Here are some of the more interesting results:

• Argentina Fastest Rising: Facebook #2, YouTube #9
• Chile Fastest Rising: Facebook #1, YouTube #5
• Chile Most Popular: Facebook #5, YouTube #4
• Colombia Fastest Rising: Facebook #1, YouTube #4. Hi5, another popular social media site among Spanish speakers is also gaining popularity and comes in at #2
• Colombia Most Popular: Facebook #5, YouTube #4, Hi5 #8

These rankings, combined with the fact that “Hispanic-fluentials” communicate in person, on the phone, or online with more family members, friends and coworkers each day than the general population – 58 people vs. 45. Among female Hispanic-fluentials, the number jumps to 68.*

I predict that these factors will converge and over the next year and we will see this rising popularity of these sites in Latin countries directly translate into larger numbers of U.S. based Hispanics logging onto Facebook to keep in touch with family and friends – both in the U.S. and in their home countries.

Source: MarketingCharts

In preparing for a presentation early last week, I came across an incredible report on Multicultural America put out by Geoscape.  Geoscape has always been a leader in providing demographic data, population projections and mapping services to agencies and marketers alike that are tapping into this segment.  Based on their latest report, the AMDS Executive Summary Report, (available as a free download on the Geoscape site), this segment is not so much as “segment” as it is about to become the mainstream population.

Now for most of you, I  know this is not new news.  But based on the recent article published in Promo Magazine, it might be to corporate management across the country.

The Promo survey among ANA members reported that while 77% of respondents were implementing multicultural efforts of some kind, over a quarter of them were either somewhat or very dissatisfied with those efforts.  The study revealed that corporate blinders remain the biggest obstacle.  Pain points cited included lack of adequate funding (58%), lack of internal support (45%), and inconsistent support from top managers (34%).

In economic times such as these, it’s imperative that corporations spend every dollar wisely.  If I were looking at the following maps, there’s no question where I would be allocating my marketing dollars.

Occasion – definition

1. a favorable opportunity or circumstance
2. a state of affairs that provides a ground or reason b: an occurrence or condition that brings something about ; especially : the immediate inciting circumstance as distinguished from the fundamental cause
3. happening , incident b: a time at which something happens : instances
4. a need arising from a particular circumstance

Occasion based marketing or OBM has been the focus for grocery stores, QSRs, chewing gum, sports drinks for some time now.  The concept is nothing new, but effective OBM programs can help create new usage occasions, leverage brand equity from participating partners or increase display space and in some cases even distribution.

In the soft drink business, occasion based marketing is centered around thirst occasions.  For example, soft drinks are not only available on the soft drink aisles, but also in non-traditional areas of the store,  cross-merchandised with chips, 20 oz bottles at the check-out counter that could be consumed on your way home, 2 liters near the meat counter because it is likely that the shopper picking up meat is cooking for more than one person, etc.

The idea behind occasion based marketing approaches is to connect when and why consumers use the product with how they shop for the product.  In other words, looking for that “favorable opportunity or circumstance” or more likely, “an occurrence that brings something about”.

So….what does occasion based marketing mean for on-line consumers/users?  I read a great article on this by Horacio D. Rozanski, Gerry Bollman and Martin Lipman – “Seize the Occasion:  Usage-Based Segmentation for Internet Marketers“.  The distinct usage occasions or usage-based segments are broken down as follows:

1. quickies
2. just the facts
3. single mission
4. do it again
5. loitering
6. information, please,
7. surfing.

The opportunity for marketers will be to figure out how to leverage these online usage occasions to generate interest, and more importantly relevance, for their brands. It’s clear that occasion based marketing becomes more complex on-line.  Marketers must not only find consumers at the right time, but also must determine the consumer’s goal for their on-line experience at that time. In this instance, marketers must truly ask themselves first “what’s the occasion?” in order to seize it.

The term “shopper marketing” has become a pretty powerful buzz word around the halls of CPG manufacturers and retailers alike lately.  What I find curious is that many marketers are unclear as to the exact definition of the term.  A quick Google search uncovered a multitude of definitions ranging from

“…collaborating with the retailer to advance the shoppers in-store experience”

on the ANA Website to

“…the employment of any marketing stimuli developed, based on a deep understanding of shopper behavior, designed to build brand equity, engage the shopper (i.e., an individual in “shopping mode”), and lead him/her to make a purchase”

from the Grocery Marketer Association.

At Mercury Mambo, we define shopper marketing from a Latino POV.

Our definition is grounded in not only a deep understanding of shopper behavior, but more importantly grounded in an ownable, relevant insight that, when activated, has the power to motivate purchase.  This insight, in conjunction with a tactical knowledge of how to best reach/connect with our consumers when they are in the “shopper’s mindset” (whether that be inside or outside the retail environment) and a keen understanding and partnership with Hispanic retailers are the components of a successful Hispanic Shopper Marketing program.

Not unlike in the general market, Hispanic Shopper Marketing programs have a tremendous potential to demonstrate a positive and possibly more immediate ROI.

Why?

1. The Hispanic space is less competitive. There is less noise to distract shoppers.
2. Hispanic retailers are often more open and flexible to shopper marketing partnerships

There are of course a few hurdles such as costly and limited to no syndicated sales tracking data and the necessity for sales and marketing to work hand-in-hand to ensure success.  In spite of these and other challenges, the wins are big and the potential for shoppers to become brand loyalist is much, much greater in the Hispanic market.

The country’s fastest-growing consumer segment is too big and too profitable to ignore.

Describe your perfect customer. No doubt it would be someone who shops at convenience stores more often, spends more money during each trip and buys across more categories. According to the Greenfield Online/Mintel Hispanic Consumer report, you have just described the Hispanic consumer market.

As the current recession continues to put a strain on retailers, it becomes even more critical to allocate time and resources towards your more profitable clientele. For retailers across all channels, this segment is often times the Hispanic market.

Sizing up the Potential

In July of 2007, the Hispanic population in the U.S. surpassed 45 million, representing 15.1% of the total population. According to the U.S. Census Bureau, Hispanics surpassed African-Americans as the largest minority population in 2003 and continue to widen the gap, growing at a rate three times the pace of the African-American population.

It is probably no surprise that the states with the largest concentration of Hispanics are California (Hispanic population of 13.5 million), Texas (8.8 million), Florida (3.8 million), New York (3.1 million) and Illinois (2 million).

However, some of the states with the fastest Hispanic population growth (2000-2008 compounded annual growth rate) may surprise you: Georgia (8%), Tennessee (8%), South Carolina (7%), North Carolina (7%) and Maryland (5%). With this increase in population, also comes an increase in overall buying power. Hispanics currently wield a buying power that totaled more than $980 million at the end of 2008 and is expected to grow to a staggering $2 trillion in the next five years.

But, while the past 10 years, in particular, have been financially strong for Hispanics, the current economic crisis has also hit this population exceedingly hard. From April 2007 to April 2008, the U.S. 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 increased growth in home ownership during the past five years, almost half of the loans issued for home purchases by Hispanics were sub-prime, nearly double the rate for non-Hispanics.

Even though these hard times are impacting Hispanics, this consumer segment continues to represent the greatest opportunity for retailers. A recent IRI study indicated that Hispanics’ spending across all consumer package goods channels is roughly 13% higher than that of non-Hispanics. Much of this is attributed to larger family and larger household sizes among Hispanics. Hispanic spending in the convenience store channel is 10% higher. Additional key facts pulled from the April 2007 Greenfield Online/Mintel report support this importance of the Hispanic consumer to convenience store channels:

• Hispanics frequent convenience stores: Some 37% of Hispanics visit convenience stores more than once per week, compared to 27% of non-Hispanics, 21% visit once a week compared to 17% of their Anglo counterparts.
• Hispanics spend more money at convenience stores: Some 24% of Hispanic respondents spend $26-$50 when shopping compared to 14% for non-Hispanics.
• Hispanics purchase a wider variety of items at convenience stores: Hispanic respondents are significantly more likely than non-Hispanics to purchase the following items: fruit (27% versus 12%), frozen food (21% versus 9%), canned food (18% versus 9%), packaged bread (22% versus 7%) and numerous other items.

It’s noteworthy that for some Hispanics, the appeal of convenience stores is based less on the experience of “convenience” and more on the experience of the “store.” Many believe that the popularity of convenience stores and the tendency for diverse purchases among Hispanics can be traced to the Hispanics’ affinity for neighborhood “bodegas” or “tienditas.” Bodegas/tienditas are the Spanish words for small stores.

These small neighborhood grocery stores carry a wide range of Hispanic-oriented products along side quick trip staples. Often times, stores such as these serve as the cultural center for many Hispanic communities by offering access to products and services that allow consumers to stay more closely connected to loved ones back home. These gateway services and products include things such as phone cards, money transfer services, travel agencies and community service referrals, as well as specialty food items.

This sense of community is further enhanced by the prevalence of Spanish language being spoken throughout the store and the bilingual signage displayed. These stores are more often frequented by recent immigrant/first generation Spanish dependent consumers.

It should be no surprise that of the Hispanics shoppers that frequent convenience stores, the larger percentage tend to be Spanish-speaking, unacculturated Hispanics. The 2007 IRI Study on Hispanic Shopping Behaviors indicated that unacculturated Hispanics spent 76% more than acculturated Hispanic consumers in the convenience store channel.

Understanding Acculturation

It is important to understand acculturation and how it pertains to your shopper segment as purchasing habits and preferences can often differ among acculturation segments. Within any market with a large and growing Hispanic population, you will find Hispanic consumers of varying levels of acculturation. Acculturation is defined as “a process in which members of one cultural group adopt the beliefs and behaviors of another group.” It is important to note the difference here between “acculturation” and “assimilation.” Assimilation is the process in which one is absorbed into the dominant culture.

There is a very important difference between the two for reaching your target consumer. For the most part, this dynamic is one of the most important things that differentiates the Hispanic immigrant group from those in the past. Whereas the Polish, Russian and Italian immigrant groups of the early 1900s assimilated into mainstream society, this has not been the case among Hispanics. Reasons for this phenomenon are varied but include:

1. For some, the journey to the U.S. is very different. As comedian George Lopez likes to say, “I didn’t cross the border, the border crossed me.” There are large numbers of multi-generational families throughout the Southwest that do not share “the immigrant experience” history.
2. Due to the proximity of many Hispanics’ home countries, immigrants are able to live somewhat border-free lives, moving back and forth fairly easily. This means they are not ever truly separated from their home, allowing families to maintain both the language and cultural traditions of their country of origin. This is a stark difference from other immigrant groups in the past whose ties to home were often more difficult to maintain due to the shear distance that they traveled to reach the U.S. and lack of financial resources needed to maintain connectivity through travel.
3. The proliferation of Spanish-language media in the U.S. has helped ensure that the Spanish language and the Hispanic culture are alive and kicking. Since the first Spanish language network came on the air in 1961, the Spanish language entertainment industry has continued to grow at a phenomenal rate. This past year, the Spanish language and Hispanic targeted television, radio, print and digital outlets attracted significant attention from the hotly contested and record spending presidential campaign. Clearly, this cultural lifeline will remain intact.

Acculturation levels are typically broken down into three primary segments:

• Unacculturated. Spanish dependent, Hispanic culture dominant.
• Bicultural. Those that are bilingual and hold tight to their cultural of origin.
• Acculturated. English-speaking and in tune with mainstream culture.

The largest segment of the Hispanic population is the bicultural segment, representing roughly 64% of the market. This segment represents the greatest variations in degrees of acculturation, bordering from those Hispanics that are more comfortable speaking Spanish with friends and family but are capable of speaking some English, to those Hispanics that are more English dominant with some Spanish language speaking abilities.

Unacculturated Hispanics represent roughly 23% of the U.S. population and acculturated Hispanics, roughly 12%. These percentages vary on a city-by-city basis and, more importantly to convenience store retailers, from trade area to trade area.

Seizing the Opportunity

Since Hispanics tend to place less emphasis on “convenience” when it comes to frequenting convenience stores, loyalty is important. A recent TNS Hispanic Shopper 360 Study revealed only 16% of Hispanics found it important to get in and out of a store quickly, compared to 39% of non-Hispanic shoppers. With this insight in mind, convenience store retailers with large or growing Hispanic customer bases have an opportunity to rethink their store experience. Recommendations include:

1. Create a welcoming environment. Numerous Hispanic studies have indicated the importance of bilingual signage among this target. Almost all major brand manufacturers provide some level of bilingual POS for their primary brands and promotions. If your sales representative does not offer this, ask for it. Many also provide basic store merchandising pieces in bilingual formats–change mats, push/pull stickers, cold vault wraps and other point-of-sale (POS) displays. This is a critical first step to ensuring Hispanic customers know they are welcome.
2. Rethink the need for speed. Although this may be counter to everything you have learned about the convenience store business, Hispanic consumers enjoy browsing. They enjoy walking the aisles of the store to see new products and learn new things. Encourage browsing by cross-promoting different aisles within your store. Remind customers at the cold vault that they might need detergent for their next trip to the laundry mat or that you carry car oil in case their truck is running rough.
3. Put fresh first. The same TNS Hispanic Study reinforced the notion that Hispanic consumers consider freshness and fresh foods as a key priority. The study revealed that Hispanics rank “buying fresh food higher than packaged goods.” The study and several others support the notion that cooking from scratch is important to this target. Be sure all fresh food and fresh ingredient options are readily displayed. This includes everything from including fresh fruits at the checkout counter to fresh ingredients, such as sliced limes, and fresh peppers at the self-serve food bar.
4. Remember sharing is caring. More often than not, Hispanic convenience store shoppers will be shopping with or buying for others. It is not uncommon to see groups of Hispanic males stopping at the convenience store when going to and from work sites. Often times, they will pool their money in order to buy a variety of items and larger package sizes to share among the group. Prominently display larger package sizes, encourage “buy one, get one” promotions from your manufacturers and consider bundling products at a special price for multiple consumers.

The key to winning with the Hispanic consumer segment is to realize “convenience” doesn’t only mean fast, it also means the ability to accommodate.

Published in Convenience Store Decisions