Catalogers plotting their strategies for next year and the next millennium would be advised to pay closer attention to the Hispanic market.
The nation's Hispanic population of 30 million, a larger market than Canada, is growing at five times the rate of the general population. Hispanics make up 11 percent of the U.S. population. The United States is the fifth-largest Spanish-speaking country in the world, and Los Angeles is the third-largest Spanish-speaking city in the world. It is estimated that by 2006, Hispanics will become the largest minority in the United States at 12.5 percent.
Hispanics also are growing in purchasing power, estimated at $266 billion, a mean per-household buying power of $30,000. However, this group has historically been ignored by the direct marketing industry, including catalogers. Hispanics receive an estimated one-tenth of the direct mail that non-Hispanics receive. In the seven years I have been involved in Hispanic marketing, I have seen only a few successful catalog launches and other direct mail campaigns.
What are some of the challenges involved in catalog marketing to Hispanics? First, define your target customer. The market is not monolithic. Hispanics come from different countries with different educational backgrounds and achieve different levels of wealth when they get here. In addition, market growth comes not only from immigration but from second- and third-generation Hispanics, who make up a growing number of generation X individuals native to the United States and have grown up in homes with differing levels of bilingualism and biculturalism.
Once the target segment has been established, the next challenge is the choice of language to use to communicate. Should it be Spanish, English or both? Determine the acculturation level of the target segment. Acculturation is the cultural modification of an individual or group by adapting to or borrowing traits from another culture; a merging of cultures as a result of prolonged contact; and the process by which someone acquires the culture of a particular society from infancy.
In 1996, according to Hispanic market research company Strategy Research Corp., 13 percent of the Hispanic population was highly acculturated, 60 percent partially acculturated and 27 percent relatively unacculturated. There is a correlation between acculturation level and English as the language Hispanics feel more comfortable speaking.
Once you determine the language that will be used to communicate with the target segment, it is important that back-end operations be consistent with the offer. If a bilingual format has been chosen for the catalog or offer, telemarketing services representatives (TSRs) must be bilingual.
Two other issues to take into account from a catalog-fulfillment perspective:
Length of the call. Be prepared for calls two or three times as long as the average. A factor that greatly influences length of call is how much experience the caller has in ordering over the telephone. Since the direct marketing industry in Latin America is just starting to develop, many immigrants are not sophisticated direct mail shoppers. So TSRs serve an educational role, explaining the process to callers and assuring them it is safe.
Another reason that calls may be long is cultural: It is not customary for many Hispanics to get directly to the point.
On the other hand, even though calls may be longer and costlier, they serve to establish a rapport with customers. Some callers ask for a certain TSR with whom they feel they have a relationship.
Method of payment. Credit-card ownership by Hispanics, though rising, still trails that by whites 47 percent to 75 percent. Therefore, you can expect a much higher percentage of orders arriving through the mail with checks or money orders compared with the general population.
But even though we receive a high percentage of checks, the bad-check problem is very low. Some marketers offer c.o.d., but this option requires a sophisticated billing and follow-up system.
Teresa Iglesias is founder and president of Niños catalog, Ann Arbor, MI, which was acquired by Genesis Direct.
