The Home Depot vs. Best Buy
The Home Depot launched its Spanish-language e-commerce site for U.S. Hispanics in early 2009, hoping to reach a new audience and grow a new profit center. After only four months, The Home Depot shut the site down because many of its visitors came from Latin America and Spain. The site was set up to accept credit cards only from the U.S. Nevertheless, Spanish-language consumers internationally very clearly communicated their interest in home improvement content online and e-commerce by visiting The Home Depot's "U.S. Hispanic" site.
Since The Home Depot has 75 stores in Mexico, many Mexicans already knew the brand and easily found the site via search. They were surely pleased that the retailer was "speaking their language" online. Unfortunately, The Home Depot's organizational structure (U.S. versus Mexican business units) clashed with the international, borderless nature of the Internet and its "U.S. Hispanic" e-commerce venture failed.
When Best Buy launched its U.S. Hispanic e-commerce site (in Spanish), it found the same situation as The Home Depot had. Many visitors from outside the U.S. visited the site. In contrast, Best Buy embraced visitors from Mexico and Latin America, encouraging them to buy online with foreign credit cards and pick up in-store when they visited the U.S. While the site generated e-commerce sales, Best Buy also heard from their store associates that many U.S. Hispanics printed out pages from the site and visited and made purchase in-store with a better understanding about what they wanted.
Win-Win vs. Lose-Lose
How could one retailer so completely embrace one of the greatest benefits of the Internet -- its global distribution -- and create a U.S. Hispanic and international e-commerce success story while another rejected it?
Best Buy has created a win-win by building sales with U.S. Hispanics and Spanish-speakers internationally. The Home Depot, on the other hand, has lost not one but two e-commerce opportunities by cutting off service online both to U.S. Hispanics and Latin Americans. Would The Home Depot consider shutting down its English-language e-commerce site as its international traffic grows?
Consumers Always Want Lower Prices and Good Quality
In addition to e-commerce sales, any retailer with stores along the U.S.-Mexico border knows that many Mexicans shop in the U.S. for groceries and especially high-ticket items. Why? With higher taxes and less competition, prices in Mexico are noticeably higher.
Compare prices for identical products on Dell.com vs. Dell.com.mx, for example, and you'll see why Mexicans cross the border to shop: Consumers always shop where prices are lower and the quality is the same or better. The World Wide Web will only bring greater transparency to the shopping experience globally in the years ahead.
Chris Emme, director of sales for Yahoo en Español, says, "I know when relatives or friends of my wife, Leticia, are visiting as boxes arrive at my apartment from the Gap, J. Crew, Disney, and Amazon. My wife's family and friends from Argentina find that the bargains and quality of products in the U.S. far exceed the products they can buy in Argentina." Millions of other consumers shop like Leticia's family and friends.
Tips for Growing E-Commerce with U.S. Hispanics
In conclusion, ask your colleagues the following questions to grow your U.S. Hispanic e-commerce revenues:
1) Is your Spanish-language site/pages optimized for Spanish-language search terms?
2) Do your media partners provide you with U.S.-only impressions? Or are your search or banner ads served in front of international visitors?
3) What percentage of your domestic U.S. Hispanic sales actually come from Spanish-language foreigners like Chris Emme's wife or Mexicans crossing the U.S.-Mexico border?
4) Are you measuring international sales among Spanish-speakers via credit card statistics or couponing programs?
5) How can you promote your e-commerce site or physical stores virtually to strategically grow sales along the U.S.-Mexico border?
6) Do you have a "welcome mat" or pop-up window for international visitors on your U.S. web site funneling them to the right pages for international sales?
By listening and responding to the millions of visitors to U.S. Hispanic web sites from abroad, you can turn your international web site into millions of dollars of new e-commerce business.
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Great article Joseph. As you mentioned 50% of all U.S. Hispanic are under 26 years of age. And with over 25 million Hispanics wired, online retailers are following under-30s Hispanic consumers to social sites like Facebook, MySpace and YouTube. “New Generational Latinos” (NGL) participate in Internet activities more than any younger generation, and this influences their online spending habits. Soome of the rules I follow to reach NGL’s and get them to take action.
NGL's are acculturated, outspoken, they spend, and are online. Reaching NGL's is not as much about language as cultural relevance. Online buying is developing in such a way that conventional PR and marketing strategies are quickly becoming irrelevant. Shoppers are influenced by social media and communications sites when they are looking to shop and buy. Change in influence means more speaking directly to Hispanic customers, defining new methods of influencing them and their buying habits.
Put the “P” in PR
Reaching the consumer, means the online retailer needs to start with the consumer by initiating interaction with products at promotional events coordinated with pre-selected consumers. After the customer adopts the message, it is the time to move the story into the media, to accelerate and sustain the buzz and conversation value.
Give Stuff Away
Drive action and build relationships by offering downloads, samples and freebees information, education, tips, free downloads, entertainment, coupons, loyalty programs and links to sites that support the value of your business, to encourage buying products.
Dialogue Not Monologue
Blogs, chat rooms and forums could be used as a support service, feedback channel or relationship-building tool. Use news releases to promote new products.
Achieve Mass Intimacy
To connect one-to-one with their customers on a mass scale, online sellers have to better understand their customers. They are able to recognize and leverage their most valuable customers, as well as broaden their consumer base by introducing engaging, fun, exciting, and rewarding programs.
In addition to managing your message, develop partnerships with complementary Web sites. Negotiate links; assess if the situation is mutually beneficial--if the services or products complement each other. Partnerships create competitive advantages.
Hi Lucia. Good points. It will be interesting to see how retailers engage NGL (new generation latinos) in the future by using the promotional tactics that you suggest.