Less than a month into the New Year and the e-retailer and marketplace announces plans for three additional U.S. fulfillment centers.
Espanol or English? The Hispanic market is growing fast in the U.S., but most e-retailers still haven`t figured out how to tap it.
Some maturing web sites are now looking outside the U.S. for expansion targets, but a handful of others have found a similar new market opportunity at home in the growing U.S. Hispanic population. Within the last year or so, U.S. Spanish speakers have gained their own Spanish-language web sites at Sears, Roebuck and Co., 1-800-Flowers.com and The Sharper Image. “This is a new market, and as a group they are big purchasers,” says a spokeswoman at The Sharper Image. “The Spanish-speaking market is a very large one that’s not really being captured by or getting a lot of attention from retailers.”
The Sharper Image has gained knowledge of its U.S. Hispanic customer through its stores in Florida, Texas and California, where the Spanish-speaking population has been more concentrated. Its Spanish language web site, launched last May, is accessible through the International button on the navigational bar on the company’s main web site. Similarly, Sears’ “Todo Para Ti” is listed on its home page menu and 1-800-Flowers.com’s 1-800-LasFlores is accessible through its home page.
According to the U.S. Census Bureau, the Hispanic population in the U.S. boomed between 1990 and 2001, rising from 21.9 million to 35.3 million to become the fastest-growing group in the country. By 2050, projects Miami-based Strategy Research Corp., the number of Hispanics in the country will triple to constitute an estimated 24% of the total U.S. population.
Those are tempting numbers for marketers, but hitting on the right online approach to this group remains a challenge, a function of language and cultural differences as well as competing priorities. Though portal Yahoo has a Spanish site and a few other Spanish-language portals offer shopping, few major U.S. retailers as yet have made specific efforts to target U.S. Hispanics online, and results so far are correspondingly small. 1-800-Flowers, for example, has released little information on the performance of 1-800-LasFlores.com and is currently reviewing its strategy. The Sharper Image hasn’t broken out results for its Spanish language site, other than to say its revenues are “quite small” in comparison to the annual revenue of some $60 million from its 5-year-old, primary web site.
The three groups
Retailers trying to gauge their opportunity with this group of online customers are faced with making a long-term bet on the future, weighing the costs and benefits of being early movers in the market now against the potential buying behavior of a more acculturated Hispanic population in the future. Marketing consultants say it’s key for retailers to understand that U.S. Hispanics are not a single demographic, but represent a number of sub-groups.
“There’s the traditional group, which are those who have either just arrived from another country or who have decided to keep to Hispanic traditions,” says Pablo Muniz, chief strategic officer of The Cartel Group, a marketing consulting firm. “There’s the bicultural group that has decided to blend both cultures, and then the group that’s very acculturated and similar to the Anglo market.”
The highly acculturated group is the group within the U.S. Hispanic population that has been first online. It switches back and forth between Spanish and English with ease, making use of a Spanish-language site versus an English one a matter of choice rather than necessity. “The Hispanics who are online are very acculturated. They’re going to places like Amazon.com. Only 13% of U.S. Hispanics with online access who bought something online during the previous three months in a survey we did last September had done so on a Spanish-language site,” says James Forrest, senior study director at Strategy Research Corp.
Statistics like that leave online marketers in the U.S. wrestling with the question: If the most likely prospects among the U.S. Hispanic population are logging onto English language web sites anyway, where’s the ROI in creating a separate Spanish language site and strategy?
J. Carlos Maya, vice president of research operations at the Roslow Research Group, which has conducted several studies on the use of media by U.S. Hispanics, says TV advertisers face the same dilemma. “You can reach a bilingual group in both Spanish and English,” he says. “So, many advertisers are asking why they should spend the money advertising separately in Spanish if they can reach the Hispanic consumer in English.”
One answer-at least to the extent that the experience of TV advertisers sheds light on the online direct market-is that outreach in Spanish is more effective with more people, even among bilinguals. A study from Roslow found that among bilingual U.S. Hispanics, TV ads in Spanish were 61% more effective in creating awareness than ads in English, 36% more effective in message communication, and more than three times as persuasive.
Other marketing consultants point to benefits of a Spanish language outreach that are more subtle but have potentially far-reaching implications. They say it’s a fallacy for marketers to believe that Hispanics in the U.S. will all eventually become-or even wish to become-so acculturated as to blend completely with the mainstream U.S. market.
Less marketing jaded
And Hispanics are particularly loyal customers, Muniz believes. “Once you win the trust of Hispanic consumers, unless you really screw it up, you’re going to have them for life,” he says. Furthermore, because U.S. Hispanics currently receive only about one piece of direct-mail advertising to every 10 pieces received by mainstream America, “Hispanics are not so cynical about advertising,” says Maya. “When a company makes the effort to communicate with them in Spanish, the effect is very positive.”
But not everyone within the Hispanic marketing community is of the opinion that online success with the bilingual Hispanic population rides on whether a site is in Spanish. In fact, given that it’s often easier to read a new language before speaking or understanding it in speech, the text and graphic format of the web may have advantages in that regard over marketing efforts that depend on audio or video media, or even face-to-face exchanges in stores. Shopping on an English language web site, points out Muniz, doesn’t actually require the consumer to converse in English. “My wife isn’t as comfortable speaking English, but it’s easier online. You have to know the basics, you have to know how to find a pathway, but you don’t have to talk to anybody; you’re just clicking,” he says.