summarize with your own words the article attached
Hispanics Seen as Key Market
WWD Issue 03/23/2011
Sofia Vergara for Kmart
For some U.S. brands, growth might be in their own backyard.
With companies looking overseas for business opportunities, it might make more sense to take a closer look at the latest U.S. demographic data: Hispanics are the largest and fastest-growing minority group in America, with projected buying power rising from $1 trillion this year to $1.5 trillion in 2015, according to a study by the Selig Center for Economic Growth in the University of Georgia Terry College of Business.
“The Hispanic market alone, at $1 trillion, is larger than the entire economies of all but 14 countries in the world — smaller than the GDP of Canada but larger than the GDP of Indonesia,” said Jeff Humphreys, director of the Selig Center and the report’s author. According to the study, Hispanics spend more money on apparel, footwear, groceries and phone services, and less on alcohol, tobacco, health care, entertainment, education and personal insurance.
At present, there are 45.5 million Hispanics in the U.S., accounting for 15 percent of the country’s population, according to a 2010 Mintel Report on the Hispanic Consumer. The Hispanic population is projected to increase to 57.7 million, a 35.7 percent gain compared to only 5.8 percent growth in non-Hispanic population, from 2010 to 2015, according to the U.S. Census Bureau. By 2050, the U.S. Hispanic population is projected to reach 132.8 million — about 30 percent of the nation’s total.
According to the Selig Center report, the top 10 states with the largest Hispanic markets, in order, are California, Texas, Florida, New York, Illinois, New Jersey, Arizona, Colorado, New Mexico and Georgia.
Retailers such as Macy’s, Wal-Mart, Dillard’s, J.C. Penney, Kohl’s, Kmart and Sears have been paying close attention to the significant spending power of Hispanic shoppers. Stores have been aggressively courting the Hispanic customer with specific apparel collections; TV and radio ad campaigns, and bilingual direct mailers, credit card applications and in-store signage. Kohl’s, in fact, signed a megadeal with Jennifer Lopez and Marc Anthony for a lifestyle fashion venture, and Kmart will launch a Sofia Vergara young contemporary lifestyle collection for fall. Both lines are sourced by LF USA, a subsidiary of Li & Fung Ltd. Major apparel companies, such as Perry Ellis International have several men’s brands specifically targeted to the Hispanic consumer, but many of the other big women’s sportswear players don’t cater specifically to the Hispanic market.
“While we track demographic profile of our consumers by brand and are respectful to be culturally relevant in our model choices, we do not have a dedicated marketing platform for this audience,” said a Jones Group spokeswoman. “We believe that for the acculturated Hispanic consumer we offer product and marketing that resonates and are respectful of her buying power and loyalty like any of our consumers.”
PEI has a dedicated Hispanic business, and the numbers to back it up. “For every Anglo person who dies, one person is born. For every Hispanic who dies, there are nine births,” said Pablo DeEcheverria, senior vice president of marketing at Perry Ellis International. He said Hispanics represent “a very different market.”
“They shop more as a family than individually. They [men] buy more woven shirts than knit shirts,” he said. He noted that the Hispanic male tends to “dress up a little more, they’re more formal and family-oriented and willing to pay for value. Wovens are perceived as having more value [than knits].”
PEI works with retailers to determine their Hispanic merchandise mix, based on demographics. “We provide the demographics for them. We have the software and can analyze down to the door and can determine assortments and displays.” He noted that the company provides bilingual signage and direct mailers to the retailers. But, he warned, one can’t make generalized statements about Hispanic tastes. Retailers need to make distinctions among Mexican-Americans, Cuban-Amerians, Dominican- Americans, first generation, acculturated and nonacculturated Hispanics.
Among PEI’s men’s brands are Cubavera; Centro for Kohl’s; Havanera for J.C. Penney, as well as Solero and Cafe Luna. He noted that the Hispanic customer tends to be younger, with the median age being 27, opposed to the non-Hispanic customer’s median age of 39.
Retailers appear to be laser-focused on the Hispanic market. In 2009, Penney’s devoted $50 million, or 16.4 percent of its media spend, to the Hispanic market, whereas Wal-Mart Stores allocated $66.1 million, or 6.4 percent of its ad dollars, into Hispanic-specific advertising, and Macy’s earmarked $38.8 million, or 4.6 percent of its media spend, to the Hispanic market, according to Nielsen Co. Sears devoted $56.5 million, or 15.4 percent of its media budget, to the Hispanic market, said Nielsen Co.
When Penney’s opened its first store in Manhattan in 2009, a block away from Macy’s Herald Square flagship, it aggressively promoted the event via local Spanish-language media in New York. Kohl’s, which has developed apparel and home lines geared to the Hispanic consumer including actress-model Daisy Fuentes’ exclusive apparel and accessories collection, has run TV ads aimed at Latino consumers on programs including Univision primetime novellas, Despierta America and El Gordo y la Flaca.
Macy’s, too, has been hotly pursuing Hispanic shoppers as part of its My Macy’s campaign, which tailors the retailer’s assortments to the needs of local markets. My Macy’s develops merchandise — with specific colors and fabric weights — that reflect the needs and preferences of local tastes.
Martine Reardon, executive vice president of marketing and advertising at Macy’s, noted the company uses specific media to target the Hispanic consumer, such as People en Español, Latina, and Cosmo en Español. When the company runs “Find Your Magic” or its “Believe” campaigns, it will photograph Hispanic models and translate the copy in Spanish. In addition, Macy’s runs TV ads on Univision, Telemundo and the telenovelas. “There will be an organic integration into the story line,” she said. “We pretty much try to mirror the general market and give it an Hispanic flair. With the Hispanic population growing, we’re doing a deep dive in our database to understand all ethnicities.”
Reardon noted that there are several vendors that resonate with the Hispanic market, such as Lopez and Eva Mendes (in textiles), and Carlos Santana in the footwear market. “But it’s not just about a designer who may be Hispanic. Hispanic customers love bright colors and are very proud to show their bodies. They want sexy and fashionable clothing,” she said.
As a result of the My Macy’s initiative, the retailer has found that some stores are more Hispanic than others “especially in certain pockets of the country.” The Miami stores have a more Latin American influence, the Texas stores are more influenced by Mexico, and the New York stores have a Puerto Rican and Dominican Republic influence.
According to Reardon, the distinguishing characteristics of the Hispanic fashion customer include that they are fairly status conscious, loyal to the department store and loyal to brands that fit her well, and they love value and newness. “They’ll spend their disposable income on looking good and fragrances and beauty products,” she said.
Kmart, which in January unveiled its collection with Vergara, said it was targeting the Latino customer, as well as a mainstream audience.
John Goodman, executive vice president of apparel and home for Sears Holdings Corp., which operates Kmart, said in a WWD interview, “There is no question she has a big following in the Latino community and Kmart has a strong Latino segment to our customer base, which is very diverse. But she also brings a mainstream appeal.”