En Espanol: Understanding Hispanic Buying Behavior and How It Drives Sales1 Feb, 2012 By: Alex Agurcia Response
Hispanics will make up more than 50 percent of U.S. population growth from 2009 to 2015. They are very big consumers too, spending about 14 percent more than the average American on personal care, household, apparel, entertainment and other items, according to the Geoscape AMDS databank. In fact, the total buying power of the Hispanic market is estimated to increase 45 percent between 2010 and 2015 to $1.45 trillion dollars.
Many companies have stepped up their Hispanic marketing efforts in recent years, but even so, based on the average percentage of resources allocated to Hispanic versus general market advertising, most U.S. marketers are still hesitant about investments in this segment commensurate with its size and payback potential.
Having run hundreds of DR campaigns targeting U.S. Hispanics during the past two decades, we know that the major reasons for this lie in the lack of understanding of how and why Hispanics buy a product or service, how that behavior differs from the general market, and what needs to be changed, adapted or remain the same from a campaign’s current marketing mix as a result.
The percentage of orders coming through a call center versus online in a U.S. Hispanic campaign will be higher than your general market campaign. Typically, your talk times will be higher, as well.
Even though they prefer the phone to order, they very likely will have researched the product either online, consulted with their friends and family, or have some familiarity with the category already. They will also ask the agent a good amount of questions. Hispanics are very savvy, loyal consumers and if an advertisement targets them specifically (particularly through original creative in their own language), they will make an effort to respond.
It is also very common for the Hispanic caller to ask for a cash-on-delivery (COD) option (up to 20 percent of callers) but usually the household does have a credit card accessible and a good agent can have success drawing it out of the caller. Most campaigns are run without a COD option, although it can usually give about a 5-percent to 10-percent sales lift to your campaign.
Hispanic consumers’ rate of online purchases have grown exponentially and is quickly catching up to that of the general market. Approximately 30 million Hispanics regularly shop online, either through their home computers or their smartphones. The number is estimated to increase to about 40 million in the next two to three years.
When they do purchase online, average orders have proven to be higher than that of the non-Hispanic. Based on a recent study published by eMarketer, the bilingual and Spanish-dominant Hispanic spends 40 percent more per order than a non-Hispanic. However, they are less trusting of online transactions than non-Hispanics, so it is important to have well-written, quality content on your page, as well as clear visuals that give a sense of credibility and security to your online visitor.
Even though the majority prefers to get media and advertisements in Spanish, Hispanics generally transact on English websites. Nearly 50 percent of all Hispanics online prefer to browse on English sites. When it comes to actually transacting an online order, the number is even higher.
Big Box Retail
Most big box discount stores are increasingly allocating a larger portion of their marketing dollars to the U.S. Hispanic segment. Hispanics shop significantly more at discount stores than non-Hispanics and spend more per person.
Retailers know that a product supported by a Spanish media campaign will increase shelf placement and lift. In fact, many retailers have designated a growing percentage of their stores as Hispanic sites in which they adapt the store’s promotional and product placement efforts to target this segment specifically.
Although in-language advertisements generate higher response rates, U.S. Hispanics consume a good amount of English media and advertisements. Together with your Spanish language advertising, investments made in general market advertising to support retail will reach your Hispanic segment and support overall product recall, which holistically will increase your retail sales success.