Speaking to the Hispanic market

Without question, the Hispanic market is in hypergrowth mode. The U.S. Census Bureau estimates that 43 million Americans — one in seven — are Hispanic. And according to the Selig Center for Economic Growth at the University of Georgia, that does not account for an estimated 4 million-6 million undocumented Hispanics nor the 4 million Hispanics living in Puerto Rico.

And if you think that’s a sizable market, keep in mind that within the next four years the number of Hispanics is expected to total more than 49 million, with nearly $1 trillion in buying power.

The size of the Hispanic population alone would render it a fantastic marketing opportunity, says Tom MacDonald, vice president of TeleTech in Culture, an Englewood, CO-based customer relationship management company. But there’s another strong reason to pursue Hispanic customers: Few direct marketers are doing it.

Hispanics “are starving for someone to reach out to them,” MacDonald says. According to the Direct Marketing Association’s 2005 Hispanic Market Report, only 55% of Hispanics receive six or more pieces of advertising mail weekly. Forty percent of them skim each piece; another 25% review each item.

Nor are many retailers, for that matter. Though some chains, such as home and garden suppliers Lowe’s and Home Depot, and upscale coffee chain Starbucks are making inroads in predominantly Hispanic areas, “the neighborhoods are still underdeveloped, with not a lot of national retailers or franchises,” says Joseph Anthony, CEO of Vital Marketing, a New York-based multicultural/youth marketing agency. “In their absence, shopping is very localized, from mom-and-pop retailers and bodegas,” he says. Reaching out to Hispanics via the Internet or direct mail “is a great opportunity to offer an alternative or form of gifting that they don’t readily get in their community,” he says.

So why aren’t more multichannel merchants tapping the market? Most companies know they should be marketing to Hispanics, “but they don’t know how to do it,” says MacDonald.

What’s more, Anthony says, the Hispanic population is as complex as the buying population at large, with consumer needs, language familiarity, and dialects differing by generation, socio-economic status, and geography, among other factors. (See “Speaking their language,” page 14.)

As with any market expansion, reaching out to Hispanic buyers requires extensive research and careful planning. In general, however, Hispanics have a high interest in courtship and rapport building rather than being sold. This translates to longer conversations with call center representatives — but also to stronger brand loyalty.

“It’s part of the culture. They want to have that conversation,” says MacDonald. Also generally speaking, Hispanics have a greater interest in family, health care and community.

Going bilingual online

Providing Spanish-language Web pages is perhaps the simplest and least expensive way to reach out to Hispanic prospects. Most Hispanic Web users are second- and third-generation Americans who are accustomed to consuming media in English, says Anthony, so if you target younger buyers, offering a bilingual option may not be necessary. But if you are trying to reach out to older Hispanics and first-generation Latinos, Spanish-language Web content is a must, he says.

While older Hispanics are less likely to be surfing the Web, the chances of their buying online increase if they are searching for an item they can’t readily find elsewhere in the States. For that reason, Anthony says, companies selling Mexican or Spanish specialty foods or spices, herbal medicines found primarily south of the border, or any other kind of imported product targeting Hispanic immigrants would benefit from offering bilingual Web pages.

Companies that do a lot of business in California, Texas, and Florida — states with sizable Hispanic communities — should also consider offering Spanish-language Web pages. Office Depot is a case in point. Some of the company’s strongest retail markets are in those three states.

What’s more, says Agustin Viola, senior director of strategy and development for the Delray Beach, FL-based office supplies cataloger/retailer, minority-owned operations account for the fastest-growing segment of the small-business sector — a key market for Office Depot — and Hispanics are fueling much of that growth. And though Hispanics are “underpenetrated” on the Web, he says, those who are online tend to be better-educated and to make more money than the Hispanic population on average.

Office Depot had done extensive site usability and navigation research, “and found that when it comes time for Hispanic customers to make a big-ticket purchase, they want a little more information, like anyone else would,” says Viola. But while most native English speakers can navigate and search sufficiently to find what they need and complete the checkout process, Hispanic buyers for whom English isn’t a first language find it useful to read product details in Spanish.

So Office Depot decided in February 2003 to include bilingual pages on its site.

Providing Website content in Spanish, known as an “in-language” function, is not as difficult as you might think. Basically what you do is create a Spanish-language mirror site with the design template used for the original, English-language site. In addition to exchanging the English content for Spanish text, some companies will replace the existing photos for culturally relevant images. The placement of picture and text blocks, along with the search capabilities and navigation features, remain the same, according to Anthony. When users click a labeled icon on the screen, the page refreshes with the Spanish content and culturally relevant pictures coming to the screen.

The site needs only an increase in memory capacity to store the alternate text and graphics. The cost of increasing memory enough to house the bilingual content is “a couple thousand dollars a year,” Anthony estimates. Some e-commerce platforms, such as Demandware, manufactured by the Boston-based company by the same name, come with a language change function that allows companies to click an icon on the platform and insert bilingual content that will come to the screen when it is refreshed.

Office Depot, which sells internationally, already had in place site pages translated into such languages as Japanese, French, and German, so Viola says providing bilingual pages targeting Hispanics didn’t cost the company anything extra. When its proprietary Web platform was built, the company had made sure it would be able to add as many bilingual pages as it liked, he says. Technologically it’s as easy as selecting a Web platform option to add content, entering the translated material, clicking save, and going live with it.

“Adding Spanish is not that big a deal from an IT point of view,” says Viola, “but if you want to provide the same kind of customer experience, you need to be on top of always adding and taking out SKUs and constantly translating the new marketing or descriptive copy.” Indeed, the main cost of adding a Spanish-language mirror site is any salary or overtime pay necessary to keep the text on the site updated, says Anthony.

Because “the cost of translating and maintaining a bilingual site is significant, especially if you have a lot of turnover with your inventory,” says Demandware CEO Steven Schambach, he advises testing bilingual pages before committing to going live with them. He suggests providing bilingual pages for perhaps a dozen product pages, which users can access by clicking an icon. You would then program your platform to make the bilingual pages available only to a certain percentage of visitors who open the site.

Once “at least a couple thousand people” visit the site, Schambach says, you can calculate the results to determine if enough visitors accessed the Spanish-language pages and if they gave the products featured there enough of a lift to proceed with more translations.

Putting it in print

Some merchants are committing to the market by creating Spanish-language versions of their print catalogs. Palo Alto, CA-based computer manufacturer/marketer Hewlett-Packard in January, for one, began mailing English- and Spanish-language catalogs to more than 10,000 Hispanic business owners. (See “HP opens door to Hispanic market,” May 2005 issue.)

Helsingborg, Sweden-based home furnishings merchant Ikea created a Spanish-language catalog for the U.S. in 2003. “We identified that the number of Hispanic consumers has been growing in the U.S. dramatically,” says Annette Barsallo, Ikea’s U.S. Hispanic marketing specialist, “and we want to be there for them and have them grab the catalog and have it in their own languages.” The 360-page catalog is similar to the English-language version, with merchandise featured in both lifestyle and product pictures.

The Spanish-language catalog is distributed only in Ikea stores in Los Angeles, New York, Texas, Arizona, San Francisco, and Chicago; it now accounts for 8% of in-store circulation. Based on reactions from focus groups, Barsallo says response to the catalog and other Spanish-language marketing efforts, such as television, radio, and newspaper ads, has been favorable. Ikea is now researching models and talking with list companies about mailing the catalog, she says.

Speaking their language

While most multicultural marketing experts advocate Spanish-language versions, it is not enough to simply translate your English-language materials word for word into classroom Spanish. Just as British English differs from American English, Mexican Spanish differs from Cuban Spanish. And different areas of the U.S. have different predominant Hispanic populations. While Mexicans heavily populate Los Angeles, for example, Miami is primarily Cuban, and New York is dominantly Puerto Rican.

Another important aspect of determining how to translate — or whether to translate at all — is establishing at what level of acculturation your audience is, says Gustavo Grüber, business development manager, emerging markets, at Oak Brook, IL-based Banta Direct Marketing Group. Hispanics come to the U.S. at different times and for different reasons, both of which factor into the mix of how much English and Spanish they understand.

Marketers may want to simply translate a catalog or direct mail piece, but that method seldom works, because direct translations can skew idiomatic meanings. Likewise, you should not forgo hiring a professional translator in favor of “automatic translation,” an online language tool now available on search engines such as Google, says Stephan Schambach, CEO of Boston-based software provider Demandware. “Those tools just don’t work at all, because computers don’t understand language.” Bilingual pages translate into the need for bilingual copywriters, he insists. It’s not enough to have native speakers of the language: The writers doing the translation must be trained at the art of product copywriting. “You need a native-speaking merchandiser, someone who can describe the product in the context it’s being sold in,” says Schambach.

Office Depot, which has always outsourced its translation needs, experimented with automatic translation but was not satisfied with the technology to ever go live with it, says senior direct of strategy and development Agustin Viola. The problem, he says, is that some Spanish words mean different things to people from different countries. For this reason, a person rather than a machine is needed.

Office Depot made sure the company that handles its Spanish translations uses what Viola calls “neutral Spanish,” the language without regional phrases or expressions that only Hispanics from certain parts of the world would understand. He won’t disclose how much the company pays for the translation work, but says that such outsource services typically charge per word or via a long-term contract with a fee for a fixed number of words.

That said, you also need to understand that when translating catalog or Website copy, “it needs to be put in the culture context of the language it’s being sold in, or it won’t work,” says Schambach. That means taking the vernacular use of language into consideration, as well as being aware of culturally relevant holidays. For example, instead of celebrating Halloween on Oct. 31, Mexican Americans may celebrate Day of the Dead holiday on Nov. 1, and while July 4 is Independence Day in the U.S., May 5, or Cinco de Mayo, marks the Mexican day of independence.

“You need to integrate with the rest of the company in your marketing calendar what the important dates and holidays are for other countries,” Viola says. “You wouldn’t think of running a special around the soccer World Cup or referencing it in copy when marketing to the U.S. population, but if you are marketing to the Hispanic population, those are the kinds of things you need to be aware of,” he says.

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