The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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While consultants say U.S. marketers would benefit long-term by efforts to meet the U. S. Hispanic population on its own turf, they also recognize the pressure to invest in what produces results now. “In retail, you put the money behind where the sales are,” says Muniz, who adds that his company has advised retailer J.C. Penney Co. Inc. against pursuing a Spanish language site for now. “If you can do a site in Spanish, that’s great. But you have to understand whether the investment is going to get you the return you’re looking for.”
Yet a Roslow Research study suggests that the long-term bet might just pay off sooner rather than later. The study shows that more U.S. Hispanics as a whole are speaking Spanish rather than English online. In March 2001, the Hispanics it surveyed used Spanish versus English 39% of the time they were online. By the fall, the use of Spanish had risen to 55%. The researchers note that the numbers have changed as the typical Hispanic user profile has changed. Gradually, the online Hispanic population is expanding to include a larger number of older and more Spanish-dominant users.
But while the debate over the merits and economics of Spanish versus English on web sites continues, it’s over a still relatively small piece of the pie. The penetration of Hispanics online overall in either language falls behind other ethnic groups in the U.S. Census Bureau data show that about 60% of Anglo-European and Asian Americans had Internet access as of last fall vs. 32% of Hispanics, though a Roslow study places the incidence of Internet usage among U.S. Hispanics higher, at about 50% of the population. About half of that number are bilingual.
Low shopping numbers
Equally pertinent to online marketers as the data on Internet penetration and language usage among U.S. Hispanics is another fact turned up by Roslow. While 75% of the U.S. Hispanics it surveyed last fall used the web for e-mail, 61% used it for research and 48% to get news, only 17% used it to shop.
When they did make online purchases, CDs and consumer electronics were the top category; though the numbers weren’t huge. 11% of users surveyed said they’d purchased CDs or electronics online at least once.
Books, a leading category online in the mainstream audience, had been purchased by only 7% of the consumers surveyed, trailing clothing at 8%. Interestingly, only 2% said they’d ever purchased flowers online. The numbers may shed light on gadget- heavy retailer Sharper Image’s active pursuit of the U.S. Hispanic market online, as well as 1-800-Flowers.com’s current review of its online Hispanic market strategy.
Only 48% of U.S. Hispanics have a credit card, according to Muniz, another barrier to the wider use of the Internet for shopping among that population. That’s expected to change as credit card providers reach out to Spanish speakers in their own language with educational and sales efforts on the use of credit both on and offline. Muniz is working with card provider Capital One Financial Corp. on one such initiative.
But while such efforts are still taking root, online marketers must make the tough call now on how much to invest in reaching this market, which format will have the greatest chance of paying off and how soon.
For now, international retailers with brick-and-mortar stores in Latin America may have the advantage over U.S. retailers. Many new U.S. arrivals have already met those retailers on their home turf and in their own language, adding a degree of comfort when dealing with the same stores online. And as in the mainstream retail market, the multi-channel presence can use the web to drive offline sales. “If the Hispanic consumer goes online at J.C. Penney, he has be able to see what is at the J.C. Penney store a few blocks from his home. Whoever does that first will do well,” says Muniz. In other words, retailers will succeed by treating the Hispanic market just like the rest of the market.