latino-shop-lapiz

Why Latinos Are Leading Retail Trends

  |  January 29, 2013   |  Comments

Five ways to market to Latino social shoppers.

Try Googling "Latinos brand loyalists" and you'll get hundreds of articles and studies addressing how Latinos are more brand-loyal than non-Hispanics. Try Googling "Latinos showrooming" and the results will be exactly the opposite. In spite of leading the mobile web and driving new shopping behaviors, very few experts address Latinos when it comes to discussing new shopping trends.

As part of an initiative of demystifying the Latino shopping behavior, Lapiz, the marketing agency for emerging cultures from Leo Burnett, conducted LatinoShop. The consumer study that was released to the press last December moves forward in identifying new trends. (Disclosure: I'm currently the managing director at Lapiz.)

Tell Me Who You Are and I'll Tell You How You Shop

The beauty of the approach is that the study analyzed how people shop across several categories. Based on the risk/reward matrix it identifies four types of purchases: burden, passion, routine, and entertainment. For example, car insurance falls in the burden category: there's a lot risk involved if you don't get the right one, but the perceived reward is very low (you don't see the benefits until you have an accident).

latino-shop-quadrants-lapiz

The study also shows that there are many Latino profiles when it comes to shopping. Consumer behavior is driven by the way consumers shop: some try to minimize money and time spent ("Doers"), others validate their purchases with information ("Thinkers"), while the remaining look for fun and pleasure ("Feelers"). As a consequence, there are six archetypes, as you can see on the graph below. Interesting to note, Latino incidence of "Strategic Savers" is smaller compared to the general population (19 percent vs. 22 percent), showing that Latinos tend to shop more spontaneously rather than planned.

latino-shop-lapiz

The Latino Shopping Network

Despite the established notion that Hispanics are value shoppers, the study shows that for Latinos shopping is not just a process or a chore. Their shopping journey combines a physical, multi-sensorial experience with a digital, multi-sourced one.

Cultural roots and a strong heritage influence the way Latinos eat, clean, cook, and ultimately how they buy and consume goods. That's why Latinos rely heavily on the opinion and feedback of their social network (both online and in person); they are more than twice as likely as non-Latinos to reach out to family members for information before purchasing a product. For newcomers, their network is critical to learn how to navigate a new culture and get introduced to new products and brands. For more established Latinos, their network is a source for discovery and enjoyment by sharing with others.

They love to touch, see, and smell a product to make sure what they are buying is the right choice. In fact, 55 percent of Latino shoppers like to touch a product before buying it and nearly three times as many Latinos compared to non-Latinos think it's fun to immerse themselves in a store environment while shopping. Swept along by the experience, Latinos are more than twice as likely to be spontaneous shoppers.

Social Shopping and Showrooming

Latinos are masters of social shopping: they leverage mobile, social media, and friends and family to share their shopping experience before, during, and after. They influence and are influenced by what their social media connections are saying about a specific brand or product: 48 percent of Latino shoppers use social media during the shopping process.

Latinos are smartphone-natives and thus have higher expectations and limited patience. "E" doesn't stand for electronic anymore, it stands for everywhere. People expect faster responses and immediate solutions no matter where they are. Geo-location is becoming critical: 47 percent of Latinos use it during the shopping process. As I discussed in a previous column, Latinos are leading many mobile behaviors, like social shopping, multi-screen usage, and mobile snacking.

Showrooming - consumers checking products and price at a physical store and then comparing prices (and purchase) online - is another great example of Latinos leading mobile behavior. Moreover, 46 percent of Latino shoppers use online videos to support their shopping journey and 36 percent share opinions and post product reviews online.

Based on this growing trend, digital platforms should be mobile first and then expanded across other channels. Today, the reality is the opposite: most digital platforms targeting Latinos don't include a robust mobile experience.

In a world where mobile behavior is app driven (82 percent of smartphone users' time is dedicated to interacting with any sort of app, according to Nielsen), marketers still lag behind and especially with Latinos. Apps that leverage social shopping and facilitate customers to check for reviews and more product information can help reduce the impact of showrooming.

Marketing to the Latino Social Shopper

  • Emerging cultures are reshaping America's shopping behavior, and Latinos are leading the way. In order to continue to grow, brands need to better understand the mindset and cultural roots that influence Latino shopping behavior.
  • Marketers can't continue having a one-size-fits-all solution when it comes to marketing to Latinos, especially in the retail space.
  • Brands need to focus on the Latino archetypes that are predominant in their specific category; they need to understand the mindset and needs of those segments as well as the most effective touchpoints for consumer engagement.
  • The Latino shopping experience is social, and marketers should leverage peer-to-peer's influence (both physical and digital) before, during, and after the purchase.
  • Latinos, as smartphone natives, are leading new behaviors like showrooming and social shopping. Marketers can benefit by using Hispanics as a learning ground for testing new mobile strategies.

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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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