Stores add product lines, departments
By Fariba Nawa
October 19, 1998
Mainstream businesses across America have tapped into a golden market in the last few years, economic experts say.
The Hispanics in America are great consumers and feeding their demands has become profitable. The number of Hispanics and their buying power are rapidly growing; people are becoming more culturally aware and American culture is becoming more Hispanic, factors that experts cite as the reasons for the marketing frenzy.
And while some companies catered to the ethnic group previously, only recently have their product lines expanded and their marketing strategies become more sophisticated. “It’s taken these companies this much time to settle that (Hispanics) are not going away. By 2025, they’ll be the majority in California,” said Terry Alderete, the former executive director of the Hispanic Chamber of Commerce in Alameda County.
The 1.1 million Hispanics living in the Bay Area make up the richest ethnic community, with an average household income of $43,395, according to reports issued by Spanish television station KSTS.
“More and more people are finding that if you respect another person’s ethnicity, they’re more interested in buying products from you,” said Joan Lawton, vice president of Erlich Transcultural Consultants. The Woodland Hills-based firm conducts marketing and consumer research.
HISPANICS: NATIONAL CHAINS IN ON ACT
In Fremont, Newark and Union City, where an estimated 45,250 Hispanics live, some grocery, music and department stores, and restaurants have joined the rising number of businesses attempting to draw Hispanic consumers.
This year, the Wherehouse music store, a West Coast chain, introduced Tu Musica, a new department opened in Wherehouse outlets in Hispanic populated areas. And the company opened two stores in southern California entirely dedicated to Hispanic music.
At the store in Newark’s NewPark Mall, Tu Musica takes up 20 percent of store space and brings in 7 percent of the $4,000 weekly total sales.
PRODUCT LINE INCREASE
Manager Brian Kates said the shop has sold Hispanic music for a while but recently increased its product line by 10,000 pieces, including CDs, cassettes and videotapes. The increase came with a change in marketing strategy to become a neighborhood store, which caters to the preference of the local population, Kates said.
“It was an attempt to capture a new market. Music retailers avoided the Latino genre. A lot of mom and pop stores sold what we’re selling now,” he said.
The Tower Records music chain also has changed its product line nationwide but at the store in the Fremont Hub Shopping Center the number of pieces hasn’t increased. The store has just shifted its selections of Hispanic music.
Marc Baknine, the buyer at the Fremont store, said instead of randomly stocking Hispanic pop music, Tower is only choosing what sells well. And these days modern pop, such as Ricky Martin and Enrique Iglesias, is making profits, Baknine said. With the new selections on the shelves, sales have climbed by 20 percent in the Fremont store.
The buyer said he noticed the rise in popularity of Hispanic music with the success of Hispanic singer Selena, who was killed in 1995.
“The record industry is looking for anything to move units,” he said.
Since 1991, Sears, Roebuch and Co. with 875 stores nationwide, has embarked on one of the most extensive projects to lure Hispanics using catalogues, advertising and clothing specific to the tastes of the ethnic group.
SELENA SPORTSWEAR LAUNCH
Recently, Sears launched the Selena line of sportswear in 50 of its 14 stores that serve the Hispanic community. The clothes were so popular that the company tripled the number of stores that carried the products, said Linda Bladley, a Sears spokeswoman. The Sears store at NewPark Mall received only a rack full of the Selena clothes line in August. The garments are selling but the products aren’t enough to make an impact in sales, said Luani Jones, manager of the women’s department.
While more Mexican restaurants and taquerias are sprouting up in the area, established restaurant chains are adding more Mexican items to their menus. Lyon’s restaurant in Newark will come out with a new menu in February that includes burritos, tacos and enchiladas. Lyon’s Latin menu now only includes nachos and quesadillas.
“The market’s out there. We can sell it,” said Larry Jackson, manager. But some businesses catered to Hispanics long before the present hype. Lucky Food Centers implemented neighborhood marketing in the early 1980s, said spokeswoman Judie Decker.
The Lucky store on Decoto Road in Union City is one of the 40 designated Hispanic stores in Northern California that sells specialized products, including jalapenos and tamale dough.
Decker said the products and sales have remained consistent. The population growth hasn’t had a dramatic effect on Lucky, she said.
Locally, corporate competition has not yet hurt small businesses that have been catering just to Hispanics, Alderete said.
SMALL SHOPS ESTABLISHED
The mom and pop supermarkets and specialized shops owned and run by Hispanics actually carry products that big stores don’t, she said. And most of the small businesses have established themselves in their areas. They have a loyal customer base. Besides, there are so many Hispanics and they spend so much money that any business serving them will benefit, Alderete added.
Susie’s Party Supplies in Newark has been providing pinatas and other specialized merchandise for seven years. And business has never been better, said Sucy Guzman, owner.
“We get busier and busier,” Guzman said.
And large and small businesses can complement each other to meet consumer needs, she said. She may sell pinatas but when customers ask for a guaybera – a pleated, hip-long Mexican shirt for men — Guzman said she sends them to J.C. Penney.