Do American supermarket chains truly understand the requirements of ethnic shoppers?
A study unveiled this fall by Thomas Opinion Research, Woodbridge, Va., provided some interesting feedback about the Hispanic market, which is one of the biggest ethnic segments in the country. It found that while most Hispanics do their primary shopping at American-style chain supermarkets, only a third of the group strongly agrees that these supermarkets understand their needs.
That result indicates that chains have yet to take full advantage of Hispanic marketing, even though it represents a huge opportunity.
Why is the potential so large? The easiest answer, of course, is demographics. Hispanics comprise 11% of the U.S. population today and are expected to surge to 22% by 2050, according to the Census Bureau.
But beyond the demographic draw is another attraction. More food retailers are realizing that embracing their diverse local populations helps them achieve their golden goal of building the store as a brand.
Jewel-Osco, the Chicago-based supermarket chain owned by food retail giant Albertson's, Boise, Idaho, has unveiled an Hispanic merchandising program that is instructive in how it builds on store-branding opportunities and corporate synergies in targeting local Hispanic shoppers.
The Jewel program, described in a recent issue of SN, has an ad campaign that clearly attempts to highlight the store's brand image. It's tagline is "Mas y mas Frescura Latina," which means "More and More Latino Freshness." This campaign extends to a new customer base the chain's longstanding corporate marketing concept of "Fresh to your Family from Jewel."
Jewel has significantly increased Hispanic product assortments. The initiative is concentrated in 50 of the chain's 190 combination stores with significant Hispanic customer bases. The media campaign includes television spots running on a mix of carefully chosen media, most notably Spanish-language cable stations.
Jewel is stretching its brand by focusing not just on grocery or fresh-food items but by embracing more of a storewide approach, with general merchandise categories included in the mix.
Jewel's overall campaign links with its parent company's strong focus on neighborhood marketing.
Conventional wisdom indicates that chains have a harder time with micromarketing than independent operators, who often stress their flexibility by merchandising differently in each of their units. Chains attempting ethnic marketing campaigns run the risk of taking a too-general approach that doesn't recognize cultural differences among subgroups of the population. For instance, Jewel has to be sensitive to the specific needs of its Hispanic customers, including those from Mexico, Puerto Rico and a number of Central American countries.
How does Jewel fare in this task? Wisely, the chain takes differing approaches to its advertising and merchandising. Rather than producing multiple advertising messages, the chain gets around the problem by sending out a single broad message on Latino freshness. But when it comes to merchandising, Jewel caters to individual groups with balanced in-store assortments that ensure most bases are covered.
