Our 2019 Retail Customer Loyalty Study uncovers factors critical to earning loyalty among Hispanic consumers.
- Hispanics are a loyal, diverse and growing customer group
- 60 million Hispanics represent $1.5 trillion in buying power
- Hispanic customers trend young, digitally oriented & social media savvy
- Top loyalty drivers include good value, low price and quality products
- Brand differentiators include trust, incentives and a caring staff
In 2019, Hispanic brand loyalty boomed. Hispanic consumers now surpass African American shoppers as the most loyal of all ethnic groups, according to customer.com’s groundbreaking Retail Customer Loyalty Study. Until 2019, African Americans had represented the most loyal ethnic group among all shoppers.
The 2019 study found that 53% of Hispanics report they tend to find a good source for their purchases and stick with it. This is compared to 37% of Americans overall and 46% of African Americans who said they stick with a good source for purchases once they find it.
At a population approaching 60 million, Hispanic shoppers represent $1.5 trillion in buying power, which is expected to grow to $1.9 trillion by 2022, according to the University of Georgia’s Selig Center report: 2018 Multicultural Economy.1 To put the buying power of this group in perspective, the report notes that $1.5 trillion is larger than the GDP of Australia. This underlines the importance for retailers to employ a multi-cultural and inclusive marketing strategy.
When targeting Hispanics in your marketing — and to win them over — you’ll want to understand the factors that influence their loyalty, as well as key demographic traits that will influence your strategies.
Top Factors Driving Hispanic Brand Loyalty
Hispanic respondents to our study listed several factors that strongly influence their devotion to any specific retailer.
Compared to the general population, Hispanic consumers were more likely to rank lowest price and quality products over convenience and ease of making purchases. In addition, Hispanic respondents were more than twice as likely as the general population to list status as a factor important to driving their loyalty.
When asked what would induce them to select one retailer over another when price, access and products are identical, Hispanics listed many of the same factors as above, but also highly ranked factors such as trust, incentives to shop with that retailer and caring staff.
Where do Hispanics shop?
To determine which retailers garner the most Hispanic brand loyalty, study respondents were also asked to list the stores they were most likely to exclusively shop for particular needs. See the chart below for a comparison of their selections versus the general U.S. population.
|Top Retailers: Hispanic Consumers||Top Retailers: General Population|
Marketing to Hispanics
When developing marketing strategies to build Hispanic shopper loyalty, it will also help to keep these general group traits in mind.
The Hispanic market is both growing and diverse.
According to the U.S. Census Bureau, nearly 60 million Hispanics live in the United States, which equals about 17% of the overall U.S. population. The Census Bureau projects the Hispanic population will account for 28.6% of the U.S. population by 2060.
That said, it’s important to remember that the term Hispanic refers to individuals coming from a very broad range of Spanish-speaking countries with their own heritage and culture. For instance, 92% of the U.S. Hispanic population comes from 10 origin groups: Mexicans, Puerto Ricans, Cubans, Salvadorans, Dominicans, Guatemalans, Colombians, Hondurans, Ecuadorians and Peruvians. Marketers who are targeting the Hispanic market need to be sensitive to cultural and language variations from group to group as national origins influence the idioms and phrases used by these consumers.
Hispanic customers are young.
The Census Bureau also reports that Hispanics represent the youngest of all U.S. ethnic groups, with a median age of 28 compared to a median age of 43 for non-Hispanic whites and a median age of 37 for the total U.S. population. Stated another way, 50% of all Hispanics are under 28 years old.
This has ramifications not only on your strategies for marketing to Hispanics, but also how long you can market to them. With one of the longer life expectancies of all ethnic groups, the median-aged Hispanic customer represents more than 56 years of “effective buying power” — the longest of any ethnic group. By contrast, median-aged non-Hispanic whites represent 36.7 years of effective buying power when life expectancy is taken into consideration.
Hispanics are digital.
It should be no surprise, given the youth of this ethnic group, that Hispanics tend to be digitally-oriented, leaning heavily toward the mobile-channel. According to eMarketer’s 2016 report on Hispanics, these consumers spend nearly 10.5 hours per week using the internet on their smartphones, compared to the overall average of 8.4 hours.2 A Yahoo study found that, compared to the general population, Hispanics spend more time watching digital video and less time watching traditional TV.3
Pew Research Mobile Fact Sheet shows that year over year, Hispanics have been the most “smartphone dependent” group, meaning Hispanics tend to rely on smartphones for online access more than other groups.4 During the back-to-school season, a National Retail Federation survey found that 70% of Hispanic parents planned to use their smartphones to either research or make a purchase.5
Hispanics are social.
According to research by Viant, a Meredith Company, nearly 50% of Hispanic millennials reported they had talked about a brand online with others or used a brand’s hashtag, as compared to only 17% of non-Hispanic millennials.6 The research also showed that “Hispanic Millennials have a big presence on social media, showing the highest affinity for Twitter and Instagram, versus non-Hispanic Millennials.”
The Bottom Line on Hispanic Brand Loyalty
With a large population wielding impressive (and growing) purchasing power — and with their recent move past African American shoppers as the most loyal ethnic group — Hispanic consumers demand retailer attention. But to win over this group, your marketing strategies will need to account for the group’s inherent diversity and youth, as well as the specific factors most influential in driving their loyalty. If you can put it all together, you stand to win big by developing deep, lasting relationships with these customers.
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Whether you’re marketing to Hispanics or any other particular customer segment, our CRM agency can help. Our retail marketing consultants are adept at leveraging research and customer data to identify the tactics, messages and offers that change behavior and motivate loyalty. Schedule a free consultation or call 303.986.3000.
1 “UGA report breaks down ‘buying power’ by demographic,” Atlanta Business Chronicle, posted April 9, 2018, https://www.bizjournals.com/atlanta/news/2018/04/09/uga-report-breaks-down-buying-power-by-demographic.html
2 “US Hispanics 2016: Who They Are, What They’re Doing on Digital and Ad Spending to Reach Them,” posted June 21, 2016, eMarketer, https://www.emarketer.com/Report/US-Hispanics-2016-Who-They-Are-What-Theyre-Doing-on-Digital-Ad-Spending-Reach-Them/2001794
3 “U.S. Hispanics Online Video Consumption,” Christina Choy, Yahoo!, posted June 13, 2016, https://yahooadvertising.tumblr.com/post/145869501145/us-hispanics-online-video-consumption
4 “Mobile Fact Sheet,” Pew Research Center, posted June 12, 2019, https://www.pewresearch.org/internet/fact-sheet/mobile/
5 “Back-to-school spotlight: Hispanic shoppers,” Katherine Cullen, National Retail Federation, posted July 24, 2018, https://nrf.com/blog/back-school-spotlight-hispanic-shoppers
6 “The Marketer’s Guide to Hispanic Millennials,” Viant, http://www2.viantinc.com/w/marketers-guide-hispanic-millennials
“State of the Hispanic Consumer: The Hispanic Market Imperative,” Neilson, published Quarter 2, 2012, http://multicultural.com/images/books/Nielsen_The%20Hispanic%20Market%20Imperative%20_2012.pdf