The Checkout 5.10 - Hispanic Shoppers

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inside the in-store experience

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IN THIS ISSUE

ISSUE 5.10 | HISPANIC SHOPPERS

• Fewer Hispanic shoppers perceive difference in product quality between brand name and private label than the general market.

• Hispanics’ shopping goals flip-flop based on the shopping season.

• Price takes on a very different role in shopping for the family.

This issue of The Checkout examines the Hispanic shopper and how this audience’s path to purchase has evolved. Though practical Hispanic shoppers continue to be more value-driven than the general-market shopper, they also are adopting a new level of sophistication where traditional in-store shopping aids are proving to be less and less effective in reaching this audience. Given these conflicting changes in behav-ior, what does the future have in store for retailers and brands communicating with Hispanic shoppers?

Hispanic Shoppers: How Trip Drivers and the Path to Purchase Have Evolved

**For the purposes of this issue of The Checkout, Hispanics are U.S. adults who identified themselves as Hispanics as part of the larger research project. Surveys

were conducted in English, in monthly waves in 2009-10.


Shopping Goals Flip-Flop by Season.

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Hispanics Heavy-Up on ValueTightening budgets, lowered consumer sentiment, and an unsure economic future have resulted in a shift in shopping behaviors from performance (quality and shopping experience) to conservation of resources (time and money), accompanied by changing expectations.

Though contradictory, saving money and convenience are the top shopping goals for Hispanic shoppers. Retailers (dollar stores and discount/mass) and brands (private label and value plays) that focus on lower prices and/or use heavy value messaging will be better positioned to face this challenging selling environment.

Price Takes on a Very Different Role in Shopping When It’s for the FamilySeasonally, June, September and November are the three points when the top primary shopping goals change in rank. During these three periods, the primary shopper becomes more concerned with satisfying the needs and expectations of other family members, as well as increased convenience, and is less concerned with expense.

These variations coincide with the major stocking-up events: summer vacation, back-to school time and holiday shopping. During these times, the Hispanic shopper shows a significantly higher concern for familysatisfaction and one-stop shopping (and less on saving money) than general-market shoppers do.


Switching It Up

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The Leaky BucketHispanic shoppers are more likely than the general public to switch brands, a pattern that looks to continue into the near term. A contributing factor to the higher propensity to switch is the acceptance by family members of private-label brands in the household.

Though the general market is gradually trending toward sticking with tried-and-true brand names, Hispanic shoppers are becoming more comfortable with switching brands. The question remains whether shoppers will return to their familiar brands given an economic recovery or if their switching behavior will become the new status quo.

Trading Down or Moving OutIn addition to switching brands more often, Hispanic shoppers are also buying fewer and cheaper goods. The silver lining is that some Hispanic shoppers are sticking with fa-miliar brands despite having to occasionally buy less often, and, when they do switch, they often choose store brands. For Hispanics, have store brands become the new reality? While the number of general-market shoppers switching to store brands seems to have reached a plateau, Hispanic shoppers show few signs of slowing their hunt for better bargains and report that the best bargains come from store brands.

Store brands continue to gain strength with shoppers and their families. Though most shoppers continue to consider name brands as offering greater variety and innovation (at a higher cost), among Hispanics, that figure is much smaller. Significantly more Hispanic shoppers perceive less difference in product quality, and their families are becoming more used to having store brands in the shopping basket. Surprisingly, this is even more pronounced at higher income levels ($75,000+).


Show Me the Money...Off

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Shoring Up the Private-Label DefenseThe good news for national brands is that of those Hispanic shoppers reporting no change in their shopping behavior, two-thirds (67%) stick with their brand of choice, indicating that there are those who are not willing to compromise on brand choice even at a lower cost.

There were significant drops in the number of shoppers across all ethnic groups who reported that they always consider trust in their name brand, sale prices, and coupons as reasons they do not buy store brands, potentially alluding to the growing strength of private-label products. The overall ranking for the top five reasons shoppers gave for not buying store-brand alternatives remained relatively consistent throughout 2009, with brand often being on sale, trust in the brand, and satisfaction with the regular price making up the top three. However, unlike Hispanic shoppers, general-market shoppers are less likely to switch from their name brands due to the different variety of product available.

Looking for Savings• Coupon usage by Hispanic shoppers grew dramatically throughout 2009

• Information on value is nice, but it had better come with a discount incentive

• Female Hispanic shoppers in particu-lar rely on all types of coupons and shopper cards

Since the beginning of 2009, shoppers in general appear to be relying more on coupons, both those from the manufac-turer and the store, while shopping for groceries. At the same time, consumers have indicated that they are less likely to use traditional in-store shopping aids, such as directional signs. The practical Hispanic shopper continues to be more value-driven than the general-market shopper and exhibits a greater reliance on money-saving discounts. Older Hispanic shoppers are more likely to use circu-lars from in-store or newspapers for deals.

Increase in Shopper StabilityThe 2009 shopping year was characterized by continuous fluctuation across shopper values (price, value, family and quality) and trip type (restock, one-bag, grab-and-go and leisure). However, we are now starting to see some stability in terms of the key attributes when making a purchase. Price played a big role in 2009 and is still a leading factor but has decreased as the key driver. The gap between price and convenience has decreased significantly and is lower vs. a year ago, which is a sign that shoppers are feeling more secure with the economic situation and returning to previous shopping behaviors.

67%Of those Hispanics reporting no change in their shopping behavior will stick with their brand of choice.


In-Store Messaging, Out of Mind for Hispanics

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The New Sophisticated ShopperShoppers overall appear to be growing in sophistication and becoming increasingly involved in the decision-making process. While most Hispanic shoppers still indicate that they are price-sensitive, they are exhibiting significant changes in shopping behavior, with fewer shoppers going straight to sales items or to their favorite brands, indicating that they are making more of their decisions at shelf. Decision-making between name and store brands encompasses a variety of price considerations,including comparing on-shelf prices and checking sales and coupons before buying. Their shopping sophistication appears to be further increasing. Despite high awareness levels, when it comes to making a purchase decision, shoppers reported that they are less influenced by sales features (such as end caps) or asking associates for product opinions.

Shopping AidsWhen it comes to shopping aids, Hispanics appear less responsive to in-store messaging than non-Hispanics. Specifically, neither messaging at shelf or in-store TV were cited as tools that help Hispanics make a purchasing decision. Many retailers and brands develop communication aimed at both the general and Hispanic markets, so this begs the question, is there a larger issue with irrelevant messaging at retail? In order to reach Hispanic shoppers effectively, brands and retailers must be rooted in deeper, more meaningful insights that distinguish Hispanic from general-market communication.

What This All MeansThe U.S. Hispanic shopper is evolving and adapting, requiring more creativity and engagement from retailers and brands. Couple with the fact this audience is showing signs of the economic stresses which have dramatically affected the general market. To adapt, they more easily slide between brands and private label as well as drop out of some categories altogether. Retaining Hispanic shoppers requires brands to better understand where the opportunities to connect with them are and are not. Example: the seasonal variable is essential as it presents windows where Hispanics are less price-sensitive and more family-focused. This allows brands to connect with this audience on a more personal level and facilitate enduring relationships, which could then lead to decreasing brand-switching and increasing loyalty.

powered by The Integer Group® and M/A/R/C® ResearchIssue 5.10

The Integer Group® is one of America’s largest promotional and retail marketing agencies and a key member of the TBWA\Marketing Services portfolio. The Integer Group resides At the Intersection of Branding and Selling® and creates strategic marketing solutions for clients in categories that include beverage, packaged goods, telecommunica-tions, fast food, home and shelter, and power sports. Join Integer® in a conversation on shopping culture and brand strategy:

The Integer GroupCraig ElstonSr. VP, Insight & [email protected] West Alaska DriveLakewood, CO 80226tel +1.303.393.3474

M/A/R/C® Research is a brand develop-ment firm dedicated to helping clients create, evaluate, and strengthen their brands. Our teams design and execute qualitative and quantitative, traditional, and online solutions while adhering to a client-service ethic built on being easy to work with and delivering what is promised. Our core competency is measuring attitudes and behaviors to accu-rately explain and predict market share,revenue, and bottom-line impact of a client’s actions. We help our clients address con-sumer, channel, and B2B marketing issues to launch better products and services attract and retain valuable customers, and build stronger brands. Our proven, marketing-is-sue-focused solutions support clients’ brand-building efforts.

M/A/R/C ResearchRandy WahlEVP, Advanced [email protected] North Westridge CircleIrving, TX 75038

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The Checkout is based on a nationally representative survey of 1,200 U.S. adults conducted monthly by M/A/R/C Research. Please contact us to learn more about the data we collect or additional analysis.

©2010 by The Integer Group® and M/A/R/C® Research. All rights reserved.The data contained in this report may be reproduced in any form as long as the data is cited from The Integer Group and M/A/R/C Research. www.ShopperCulture.com.

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The Checkout 5.10 - Hispanic Shoppers

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