You Are Who You Hire

By Armando Martín   |  As Published on Progressive Grocer

The first set of 2010 Census results is out and ready for viewing. The hype with which marketers and merchandisers have surrounded the latest census is similar to that of the 2000 Census, which reported that the Hispanic population had soared by 58 percent from 1990, while the Asian population experienced a stunning 83 percent surge during that same decade.

It certainly seems like getting on board with a Hispanic program would be a slam-dunk, considering that the non-Hispanic population grew by 5 percent in comparison. What’s more, within the non-Hispanic group, those who identified themselves as white grew even more slowly, at 1 percent, or from 194.6 million to 196.8 million.

Meanwhile, during the same time frame, Hispanics grew from 35.6 million to more than 50 million, accounting for 16 percent of the entire U.S. population. When you overlay the Hispanic population throughout many of the top U.S. markets, Hispanic growth is even more strategic.

Investing at least 90 percent of marketing and merchandising resources in a white market that’s growing at 1 percent defies logic. Many major markets are even posting negative growth for whites. As you assess your store footprint, you’ll see the same trends. For instance, the white population of California, the country’s bellwether state, is down 7 percent over the past 10 years.
The problem is that there isn’t enough research, insight, rationale or logic to persuade people to invest in the Hispanic initiative if their minds are made up against it. Many of those who say no have neither rationale nor justification to support their position, because there isn’t any rationale or logic not to pursue the Hispanic market in a bullish way. Like any other significant initiative, it takes rigorous commitment from the organization at large. Hispanic marketing and merchandising are everyone’s business. On its own, the general market can no longer deliver the growth of past years if more money is invested into it. It’s a case of diminishing returns. The general market has shifted, and there’s a new mainstream emerging.

If you’re looking for growth, try reaching out to the Hispanic shopper. Hispanic Mom is the prototypical customer: She shops more frequently; has a larger, younger family; spends more money per basket; cooks with fresh ingredients; is more responsive to advertising; watches more television and listens to more radio; and has a higher propensity to engage in social media. If you invite her to participate in your business, she’ll tell her friends that you treat her respectfully, and they’ll reward you for years to come.

SECRET SAUCE
The “secret sauce” in building a long-term sustainable Hispanic franchise has little to do with media selection, catchy jingles, clever taglines, assortment mix, pricing, or paint and fixtures.
It has everything to do with hiring and promoting practices. Hire and promote more minorities in key P&L roles. People who reflect the market in which you operate from top to bottom will make and keep you more relevant and welcoming to America’s broader population. Organizations generally look at the rank and file of their companies to measure diversity, and that’s been a great start for the past 40 years. But we can do better. The time has come for the rank and file be given the opportunity to run P&L throughout the organization.

I know people of color who are ready right now to make significant contributions at the senior-executive level, not because they’re more brilliant or work harder, but because they offer perspectives not always heard within current executive teams, ones filled with generations of wisdom, energy, hope, belief and insight, not unlike those of their white counterparts, but the American experience is different for different ethnic groups. And it’s those various experiences that bring value and authenticity to the job.

Those missing additional voices are the cause of the misfires in the development and execution of current operations, merchandise and marketing plans. On behalf of all those minority executives who are ready, willing and able, make a difference. Make the call.

Armando L. Martín is the co-founder of XL Edge and a managing partner of the XL Alliance, a network of companies dedicated to helping business executives maximize their profits. He will serve as emcee at the 2011 Hispanic Retail 360 Summit at Torrey Pines in San Diego, Aug. 10-12. For more information, visit www.xledge.com

Multicultural Marketing: Use Your Common Census

By Armando Martín  |  As Published on Progressive Grocer

Fear is the biggest single hurdle preventing executives from investing in ethnic markets, but reason and data tell us that the time to act is now.

How often did we hear our parents say, “Just use the common sense you were born with, and you’ll be all right”? The truth is, if we adhered to this simple adage, we’d probably be better merchants and marketers. Somehow, advances in analytics applied to marketing and merchandise reduce the common-sense edge. There just doesn’t seem to be much wiggle room for instinct when making multimillion-dollar decisions.

Sometimes, a decision-maker’s own inner voice, that voice they trusted back in the day when they were coming up the ranks, when they were moved to make bold and brave decisions, that inner voice that served them well, gets shoved aside by corporate tradition or politics, or it droops away in self-doubt. This year and for the next few years, store managers, brand managers, category managers, and marketing and merchandise executives will have an opportunity to rely on an abundance of data as well as their own common sense, and be tested like never before, in a diverse market like we’ve never seen before. A proliferation of media options, cultural diversity, social networking and mealtime alternatives will temper the best and the brightest within our industry. Today’s consumers defy segmentation by their desire for sophisticated individuality, be they black, brown or white; male or female; or young or old. Today’s consumers know they’re in control. The choices at customers’ fingertips are mind-boggling. Data alone won’t help us get there; the committee isn’t much good in this territory either — in fact, the committee can get in the way of breakthrough thinking. We need to value what’s inside of us, our own common sense.

It’s about to get even more complex. This year, thousands of workers are being mobilized to conduct door-to-door counts, and millions of dollars are being invested to promote the 2010 U.S. Census. And for most of the year, discussion of the census will be a common theme for opinion leaders and political pundits. I don’t consider myself the leader of a cause, and I’m certain I’m not a pundit, but I’ve never hesitated to share an opinion.

The census is a ritual that occurs every 10 years, and its findings shape the way government agencies spend money in communities across America. It will also influence the way corporations will invest to persuade more consumers to buy their brands and shop in their stores.

Minorities are the New Majority

The hyperbole is already mounting. In a recent article from the Oct. 12, 2009, issue of Advertising Age, Peter Francese writes that minorities are the new majority: “One fact says it all. In the two largest states (California and Texas), as well as New Mexico and Hawaii, the nation’s traditional majority group — white non-Hispanics — is in the minority.” And in the nation’s 10 largest cities, he says, “no racial or ethnic category describes a majority of the population.”

After careful consideration, I’ve come to the conclusion that the biggest single hurdle stopping executives from investing in ethnic markets is not lack of data, not lack of media infrastructure, not a lack of merchandise, not a lack of strategy, and not a lack of will, because we know the American merchant and marketer is fearless when it comes to competing. So, what keeps decision-makers from reaching out to the ethnic consumer, from pursuing the ethnic market with the same zeal and fearlessness that they’ve done throughout their careers?

Data, logic and common sense all point to a high-spend, growth-driven ethnic population that in some markets equals or transcends the growth and contribution of the white consumer population. Indeed, the ethnic shopper represents incremental growth. So, what’s the hesitation? I’d like to know. I’m sure shareholders would like to know what innovation, what new package idea, what new aisle assortment, what new technology, what new flavor can rival the multitrillion-dollar market represented by ethnic spend.

Risk-averse Retailers

I believe that the reluctance to jump into the ethnic world of merchandise and communication can be defined by a single emotion. Is it possible that one single emotion can hold an organization’s brand hostage and prevent it from truly maximizing its growth potential? If I had to guess what that one emotion is that keeps executives from embracing the ethnic audience, what comes to mind is a four-letter word that starts with the letter F. F is for Fear. Fear to offend a white customer who has been a regular shopper for a generation or two, or more. The self-doubt bounces in our heads that an in-store sign in Spanish will start as a whisper and soon turn into a roar, sparking a mass exodus of white shoppers. Can it be possible that Americans in general have had their heads buried in the sand or, like Rip Van Winkle, have been asleep for 20 years?

I’ve witnessed and heard this concern expressed many, many times. I’ve heard it shared with the deepest respect and complete sincerity from coast to coast by defeated store managers as well as executives at headquarters shaking their heads, not knowing what to do. It’s not just fear of complaints from customers regarding bilingual signage, but also fear from their bosses for any missteps. No one wants to take the risk. So, status quo rules the day.

I give the white shopper more credit for being ready to embrace diversity than corporate America is willing to give. I give the white American shopper props for being curious about serving fresh, flavorful, rich food at the dining room table. Heaven forbid that a Mexican would ever eat meatloaf, or anyone not Mexican would cross the food segmentation profile prepared by an industry analyst and buy the ingredients to make cheese enchiladas, or beans and rice with a warm tortilla.

I understand it’s a difficult thing to imagine that future strategy is no longer going to be prioritized by a diminishing white majority but more by the leading metros where your stores are located, and the national brands naturally follow the distribution. It’s a relatively easy process to determine who lives around the radius of the stores.

Act Accordingly

Francese, in the same Advertising Age article, further supports the reason that a general market strategy is less critical. “The average American has been replaced by a complex, multidimensional society that defies simplistic labeling …. This census will show that no household type neatly describes even one-third of households,” he writes. “The iconic American family — married couple with children — will account for a mere 22 percent of households.” All I’m suggesting is, why not consider your resource allocations according to region and the demographic makeup of the store footprint surrounding your stores, and then act accordingly? Common sense tells us that acting accordingly is to sell what people want and to let them know about it in culturally relevant ways.

Francese notes how diversity varies greatly by age, “with the younger population substantially more diverse than the old. Consider these 2010 projections: 80 percent of people age 65-plus will be white non-Hispanics. But just 54 percent of children under age 18 will be white non-Hispanics … White non-Hispanics will surely account for fewer than half of births by 2015.”

It’s probably not a good strategy to wait until 2015 to react. Reason tells us the time is now. It’s going to be interesting to see if this year’s round of business planning for 2011 will be business as usual. It will be interesting to see whether there’s a groundswell of activity in pursuing ethnic shoppers by those brave souls, the independent thinkers. We’ll all have common access to the census data, but if you want the edge, don’t forget the common census that our parents encouraged us to use.

Armando L. Martín is the co-founder of XL Edge and a managing partner of the XL Alliance, a network of companies dedicated to helping business executives elevate their culture and maximize their profits. To find more information on multicultural perspectives and practical resources, visit www.xledge.com. To contact Armando Martín directly, email amartin@xledge.com.



A Sense of ‘Comm-Unity’

By Armando Martín   |  As Published on Progressive Grocer

The controversy over Arizona’s recent immigration law may redefine the relationship between grocers and their valued Latino customers.

The word “unity” has stirred the hearts of men and women for generations. In the next few months, we’ll be hearing more about the bicentennial celebrations of independence for many countries throughout Latin America. Additionally, it’s been 100 years since Mexico was embroiled in a revolution against state and church, an epic struggle that catapulted men like Emiliano Zapata and Francisco “Pancho” Villa to the status of legendary revolutionaries. Now, the uproar of legal vs. illegal immigration will either unite or divide communi- ties throughout the United States. Retail will either benefit or lose. It’s an issue over which it’s difficult for common citizens and businesses to remain neutral.

Deep Ties
There’s probably no other industry that enjoys such an intimate connection with the consumer than that of the corner grocery store. Many of us remember going to the store as children for a gallon of milk, eggs, butter, bread or any other last-minute item Mom needed for dinner. When I was a child, the local market was a familiar friend that we visited several times a week, and where the associates knew us and we knew them.

Even today, supermarkets position them- selves as neighborhood stores. Marketers and merchants vie to win the supreme title of “store of the community.” Many chains have deep ties to their communities going back de- cades. Joe Albertson and Barney Kroger built stores in neighborhoods that primarily served white America. If Barney and Joe were here to- day, they’d hardly recognize the old neighbor- hoods. But something tells me that if they were here, they’d start developing plans geared to- ward the customers who live near their stores: marketing and merchandising one customer, one store and one community at a time.

Until now, grocery executives didn’t worry much about a customer’s residency status or citizenship, but marketers need to give thought to their company’s position with a well-thought-out rationale regarding citizen- ship, especially if the debate spills over into the communities in which they operate.

One Organization’s Idea of ‘Comm-Unity’
Last month in Arizona, Senate Bill 1070 was signed into law by Gov.Jan Brewer. The law makes it a misdemeanor for immigrants to be in Arizona without proper documents and allows police officers to request proof of status if there’s a “reasonable suspicion” a person is in the country illegally. On May 2, The Arizona Republic ran a rare front-page editorial that said: “Arizona politicians are pandering to public fear. The result is a state law that intimidates Latinos while doing nothing to curb illegal immigration.”

In Phoenix, a common social issue has caused a highly visible organization to unite in behalf of a community it respects and sup- ports. The NBA’s Phoenix Suns wore a “Los Suns” insignia on their jerseys for game two of the Western Conference semifinals playoff series against the San Antonio Spurs on Cinco de Mayo. Owner Robert Sarver said his team did this “to honor our Latino community and the diversity of our league, the state of Arizona and our nation.”

“Community” is more than just a word to Latinos. Their community has been built over the years by sharing common issues and standing together as one. Reaching the Latino community takes commitment, respect and investment. Latinos don’t give their loyalty easily. They don’t always write a letter of complaint and generally don’t make demands. This is a key insight into understanding Latinos as customers.  While they won’t always complain, they may register their dissatisfaction by shopping somewhere else and persuading a dozen friends and family members to do the same. The key to winning the hearts and minds of Latino customers is to find common interest with your neighbors and have the conviction of your values to stand united. That’s what “comm-unity” is all about.

Armando L. Martín is the co-founder of XL Edge and a managing partner of the XL Alliance, a network of companies dedicated to helping business executives elevate their culture and maximize their profits. To find more information on multicultural perspectives and practical resources, visit www.xledge.com. To contact Armando Martín directly, email amartin@xledge.com.