Hispanic Summit: Integrated Strategy Is Key

NEW YORK Reaching Hispanic consumers requires a strong integrated strategy that incorporates relevant messaging, respect and differentiation into every aspect of a brand or company.

That’s the chief approach that Target employs to attract a loyal following of Latino consumers who consistently give the stores high marks for providing a convenient shopping experience, per the retailer.

Target owes much of its success to early acknowledgement of Latinos as an emerging majority and of the Hispanic population “as a marketplace opportunity, not just as marketing opportunity,” said Greg Cunningham, the retailer’s director of multicultural marketing. “You can’t just treat it as a niche market.”

He delivered the opening address at the 2008 Hispanic Retail 360 Summit yesterday in Miami.

“We’ve tried to think about the Hispanic market not only as a marketing opportunity but much more cross-functionally: How does this emerging majority affect our community relations efforts, how does it affect our merchandising marketing, corporate diversity and supplier diversity relationships and strategies?” he said.

When he saw the opportunity to expand Target’s business “by speaking more personally with its emerging majority,” Cunningham, who at the time was working in various other marketing positions, created the multicultural post and convinced his Target bosses that specialized messaging was needed in order for the brand to resonate with Hispanics and other ethnic groups.

“Otherwise, it’s like inviting somebody to a party and addressing the invitation to ‘resident.’ Yeah, you invited them, but not really,” Cunningham said. “The invitation wasn’t really for you.”

In a broad sense, Target is “putting their specific name and address on that invitation and we’re really making it more personal,” he said.

“People want to have a relationship with a brand and they don’t want to be sold to — they want you to provide solutions to their everyday problems, meaning they want a convenient shopping experience. They want to get in and out, but they also want to know that ‘you are contributing to the schools my kids go to, you respect my culture and my community, you’re hiring people from my community to work in those stores, that you see me as a valued member of society and you’re worthy of my support as a retailer,'” Cunningham said.

Those attributes tend to be highly valued by Hispanics and all people of color because for so long they have been outsiders and haven’t been able to fully participate in the American dream, he added.

To build a successful relationship with Hispanic shoppers, the retailer has built its core strategy on three main pillars: respect, relevance and differentiation. Here’s how Cunningham breaks them down:

Respect

It sounds simple enough, but Cunningham said brands and marketers often ignore this key strategy.

He said: “You want to make sure that people have earned your trust and have earned your dollar in a way that says, ‘We respect what you and your culture bring to the table,’ and it’s not just me taking, taking, taking. This really is a relationship that is a two-way street.”

To connect with Hispanics, it’s imperative to know who they are as a diverse cultural group and as consumers.

“Respect is all about how we embrace the unique contributions of the culture over all,” Cunningham said. “It’s about how we share great stories of culture and pride and make Hispanic culture accessible to all of our guests because at the end of the day, there is more that we have in common than we have that separates us.”

Target’s “Dream in color” campaign, a yearlong celebration of culture and heritage, is a way to go beyond designated cultural observances such as Black History Month, Asian-Pacific Heritage Month or Hispanic Heritage Month — which the retailer abandoned a few years ago — to engage consumers in a dialogue that embraces “commonality.”

Respect is conveyed to Hispanic consumers via Target’s TV spots that feature successful Latinos, including home decor designer Sami Hayek and music producer Emilio Estefan, who share personal stories about fulfilling their dreams.

Target’s ad spending in Hispanic network and cable TV reached $6.3 million through March 2008, with spending in 2007 totaling $32 million-plus, up from $28.5 million in 2006, per Nielsen Monitor-Plus.

The retailer also illustrates its respect with its community relations efforts that assist local schools and not-for-profit groups as well as its relationship with Target House and the St. Jude’s Children’s Research Hospital.

Still, too often marketers will run ads commemorating Hispanic Heritage Month with [a photo of] Frida Kahlo or a photo of Rosa Parks during Black History Month, Cunningham said.

He added: “Our country and our world are at a different place in terms of how people are understanding the need to come together and put our differences aside and move ourselves forward in a way that is much more about how we are all alike than how we are all different.”

Relevance

This means offering merchandise and brands that consumers prefer and speaking to “her,” the young, educated, increasingly affluent Latina via her preferred media — and in her preferred language, Cunningham said.

“When you walk into our stores, you should feel as though Target has the assortment, the merchandise that you’re looking for and that this is your store,” he said.

Added Cunningham: “We know that Hispanics make more grocery shopping trips than anyone else, so one of the things we’ve done in-store is expand the number of our authentic Hispanic food brands, like Herdez and Goya. These are the kinds of things that we’ve had to do to prove that we really do understand what she is looking for.”

The goal isn’t to constantly add specific Hispanic-targeted brands; it’s about focusing on how to best layer in a “Hispanic element” into existing programs like its designer program that features a line of home decor for back-to-school by interior designer Sami Hayek.

The collection is designed for young consumers and those who are college bound and offers multiple use, minimal packaging that’s reusable with recyclable packaging, according to Cunningham. “It allows us to talk about all of the things that we know our younger guests are concerned about and thinking about as they go off to college.”

Target also trans-creates all media and publicity outreach to make it relevant for the Hispanic media, generating more than 80 million media impressions so far in 2008, he said.

Cunningham cautioned that sometimes relevance gets mired in myriad product offerings. During an outing to an African-American-targeted store on the South Side of Chicago, he encountered a prominent display of suntan lotion: “We really felt really stupid because as a guest you walk in and you say, ‘These guys don’t get me at all.’ I like to call it relevance because it needs to be a relevant shopping experience.”

Differentiation

The ‘Tar-zhay’ experience is what gives Target pop-culture cachet, Cunningham said.

“It’s what people love about Target,” he said. “It’s the [all-to-familiar] ‘I went in to buy soap and I found this really cute Isaac Mizrahi blouse that I just couldn’t do without.'”

Target takes pride in its reputation for transforming what would be a mundane trip to the store into a treasure hunt, Cunningham said. “That’s the great part of our brand: That you went in, accomplished all of these things on your list, but you found this one thing that made you feel really good and you felt really smart because you didn’t pay a whole lot for it,” he said.

This helps to enhance the brand’s cachet and Target’s “design democratization” to consumers. “You don’t mind putting on your purchase and telling your friends that you bought it at Target,” Cunningham said. “That’s the feeling that we want to leave you with when you walk out of the store, go home and show off what you bought and say, ‘Look what I got at Target and I only paid $12.99.’ That’s the differentiation that we like to show.