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Hispanics:
An Untapped E-Commerce Opportunity
By JOSEPH ANTHONY
Vital Marketing
While marketers and retailers increasingly focus on the $690 billion
Hispanic market, little attention has been given to this ethnic group’s
presence on the Web. Whereas more marketers are diverting general
market ad dollars to point-of-purchase destinations online, similar
overtures have not been made in minority communities. This is especially
the case with the Hispanic marketplace.
For example, last year more than $3 billion was spent in targeted
niche advertising toward the Hispanic population in America. However,
only a small fraction of this was spent on online advertising, with
the bulk going toward print, television and radio campaigns.
Why Now
The key obstacles that traditionally exclude minorities in non-cash
and carry fiduciary exchanges are breaking down. While Hispanics still
hold bank accounts and credit card accounts at a much lower rate than
the mainstream U.S. population, that paradigm is shifting. The reasons
for this change are twofold, one economic and one institutional.
Economically, with annual incomes exceeding $100,000, Hispanics are
among the fastest-growing upwardly mobile segments of American society.
With increased income comes greater involvement in traditional American
commercial indulgences such as home and car ownership, family vacations
and personal electronics like home computers.
So, now you have a population with more means and the broadband technology
to make e-commerce part of their buying habits. The tendencies of
the upscale Hispanic community are no different from that of the rest
of the population.
As Hispanics become more acculturated into American society, and second
and third generations are born, their tastes begin to resemble more
of the mainstream, and this carries into their commercial habits as
well.
Fifteen years ago much of the Hispanic shopping dollars went to small
neighborhood stores. Today much of that money is spent at mainstream
chain stores like Wal-Mart and Target. It is only logical that the
online realm is the next step for Hispanic consumers with increased
earnings.
Besides increased wealth, the evolution of alternative means of credit
has also opened the door to Hispanics using the Internet as a point
of purchase. Prepaid cellular carriers are an excellent example of
reaching a market that is wary of credit cards or has poor credit.
The success of Boost Mobile and Virgin Mobile proves that minority
consumers are eager to take advantage of services when credit is not
a concern.
Now companies have taken the same no-credit friendly approach to banking.
Visa, MasterCard and Discover are all active in marketing their prepaid
credit cards. Besides appealing to parents and giving their children
banking lessons, prepaid credit cards have become popular among minorities
who are credit-wary. Having a form of plastic purchasing power opens
up the Web as a commerce destination to many Hispanic Americans.
Who’s Getting It and Why
Like mainstream Americans, Hispanics go online to seek information.
And they want it in an easy-to-understand form. From younger-generation
Hispanics who visit general-market sites looking to book a spring
break vacation with their first credit card to families shopping for
the best deal on a new car, the opportunities are endless.
Web sites like Yahoo en Espanol, ESPN Deportes and Southwest Airlines’
site make it easy to access bilingual information without feeling
as if you are accessing services inferior to the English version.The
bilingual factor is essential in e-commerce outreach to the Hispanic
community. While much of the U.S. Hispanic population is fluent in
English, for many the comfort level is with the Spanish language.
By offering bilingual sites, companies give the Hispanic community
a choice and show that they are important consumers.
Acquiring Customers
Acquiring Hispanic customers is done on two fronts. First is the integration
of the Web site into other ad streams geared toward Hispanics, like
print, television or radio. ESPN does a great job of this with its
Deportes TV network and site. The second is advertising in key Spanish
print publications like Hoy, La Opinion, and El Diario, as well as
in locations where Hispanics already are frequenting. This includes
the popular online Spanish magazine Lavox.com, which is a very celebrity
news-driven, Spanish-language site.
Difficulties
In terms of obstacles, the Web is no different from other media streams
designed to target Hispanics. While Mexicans make up more than two-thirds
of the Hispanic population in this country, companies viewing Hispanics
as a singular block run the risk of alienating the demographic.
Providing an array of options and activities that would be appealing
to natives from Latin America as well as Puerto Rico is essential
in long-term loyalty online.
While there are going to be some growing pains in marketing to Hispanics
online, its long-term economic possibilities will be increasingly
important to a company’s bottom line in the coming years.
Joseph Anthony is CEO of Vital Marketing, a New York advertising
agency specializing in youth and multicultural marketing. His e-mail
address is janthony@thevitalgroup.com.
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