Latinos and Coupons: A Tale of Two Worlds

  |  October 25, 2011   |  Comments

Why are Latinos hesitating to use coupons?

The notion that coupons don't work with Latinos has been one of those unquestioned truths of Hispanic marketing. Any time clients asked their agencies about Hispanics and coupons, you could expect the same kind of answer: those two don't match.

On the other hand, some direct marketing professionals - especially in the past few years - have been trying to correct that notion. As Vincent Andaloro, president of Latin-Pak says, as cited by Promo Magazine, "If advertisers would spend more money on coupons they would reach more Hispanic consumers…"

The Latin American Heritage

Historically, coupons have never been a big deal in Latin America. According to Nielsen, only 15 percent of consumers in Latin America use coupons versus 67 percent of respondents in the United States.

This lack of "cultural heritage" in terms of coupons definitely affects Latinos living in the U.S. If you take a look at country of origin, the fact that Puerto Ricans and Cubans are more familiar with coupons and use them more often than Mexican Americans, for example, reinforces this notion.

Other factors that contribute to low coupon adoption among Latinos are:

  • Lack of familiarity with the redemption process
  • Coupons normally not promoting products that Latinos prefer
  • Shame of being perceived as poor

This last one is part of the cultural barrier. Some Latinos tend to feel ashamed to use coupons in public: they fear giving others the impression that they don't have enough money to buy a product.

Although Latinos are less likely than non-Hispanics to use any kind of coupon, the difference is even bigger in terms of using coupons at restaurants, fast food chains, and supermarkets (Simmons 2011). Using coupons at a discount store is not an issue (everyone is there to save money), but other social places like restaurants are more "embarrassing."

The Dynamic of Coupons

It's been said that economy plays an important role in the acculturation process; and this is truer of the recession. Google Insights for Search shows that the number of searches for "cupones" (the Spanish word for coupon) has increased significantly at the end of 2007 and during 2008/2009.

dynamic-of-coupons

The recession has redefined value. For Latinos, value now equals "smart shopper." Latinos have started to use more coupons: 51 percent, according to a study by Synovate. Yet, African Americans' use of coupons grew at a higher rate. Hispanics increased their visits to mass merchandisers or delayed purchases until a specific product was on sale.

In terms of coupons, not all categories were impacted the same way: apparel and personal care performed better than groceries.

Yoly Mason, editor of Cuponeando.net agrees: "In my experience, Latina moms are more comfortable using coupons for their kids' clothing purchases. It seems to me that in a mall/retail store setting, the use of coupons is more acceptable."

Coupons in an Immaterial World

The explosion of both mobile and social media among Hispanics has accelerated the use of "digital" coupons. As I discussed in previous columns, the digital divide is turning into digital leadership, and Latinos overindex in mobile coupons as you can see in the chart below.

latinos-usage-of-mobile-coupons

Overall, Hispanic moms are two and a half times more likely to use mobile coupons than their non-Hispanic counterparts, according to comScore. On the other hand, Hispanics underindex in using deal sites like Groupon or LivingSocial, representing an interesting opportunity.

DescuentoLibre.com understands that and has a more targeted approach with products that are more relevant to Latinos than the typical Groupon and LivingSocial offers. While Groupon focuses on new adventures like skydiving or Ethiopian food, deals on Descuento Libre are much more likely to involve family activities and household necessities, as cited in gigaom.com.

Another important factor is the intersection between the material and immaterial worlds: printing coupons is both an obstacle and an opportunity. "In this digital age, we are so used to smartphones and being paper-less that we tend to forget that some of the best savings we can obtain is by printing coupons at home," adds Yoly Mason.

Mobile Couponing in the Privacy of a Hand

As stated before, there's no consensus among professionals when it comes to Latinos and the use of coupons. We are seeing increased usage, and the growth of both mobile and social media is expanding the opportunities.

Having the ability to get coupons at a fingertip seems to be working pretty good for Latinos. And the notion that it's more private (not as embarrassing as with traditional coupons) doesn't hurt either, in this tale of two worlds.

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ABOUT THE AUTHOR

Gustavo Razzetti

Gustavo Razzetti is EVP, Managing Director of Lapiz, the Latino shop of Leo Burnett. He has 20+ years of experience in integrated marketing communications in U.S. and Latin American markets.

A change agent, with the expertise of transforming agencies into digital at the core shops, Razzetti has become one of the leading voices when it comes to understanding the new market dynamics of US Latinos.

Former Chief Strategy & Engagement Officer at Grupo Gallegos, president of GlobalHue NY and CEO of Euro RSCG Latino. Razzetti's career is marked by extensive experience working with top consumer brands such as Comcast, Walgreens, Verizon, Nestlé, Chivas Regal, General Motors, Coca-Cola, and BBVA, and 200 others. He also served as CEO of Euro RSCG both in Puerto Rico and in Argentina. Prior to that, Gustavo was CEO and founding partner of WhyNet - the no. 1 interactive agency in Argentina.

Strategist by conviction, digital pioneer by choice, leader by evolution; Razzetti has received recognitions that include Effie awards, Gran Prix AMBA, Euro RSCG's CBI Award, and Strategic Planning Director of the Year, McCann Erickson. Many of the campaigns he strategically led won Cannes, Clio, New York Festival, London, and FIAP awards, among others.

On a personal note, Gustavo loves scuba diving, bicycling, gourmet cooking, and fine wines.

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