• by Roberto Siewczynski , Columnist, May 31, 2013

At the recent AHAA (Association of Hispanic Advertising Agencies) convention, Walmart was named the first Marketer of the Year. As part of this recognition, the presentation by Walmart's SVP of Marketing Tony Rogers was powerful, as was his point that “everyone at Wal-Mart is in the multicultural marketing department.” This is clearly an organization committed to Latinos. Yet during the Q&A following Rogers’ presentation, something interesting was revealed: Walmart can do better in the grocery section when competing for Hispanic shoppers against independent chains such as Vallarta, based in Los Angeles.

Although Rogers was kind enough to reveal that there was still progress to be made for the retailer the grocery market when competing against some of the smaller Hispanic independent chains, he did not reveal where or how this progress would be made. This raised a couple of interesting questions, most notably:  What improvements can Walmart make to better perform with this group in grocery? 
 
Some answers may come from our recent NVista study of shopper needs and habits among Latino consumers. We call these needs “Mercado Undercurrents” because regardless of acculturation or where Hispanics were born, these undercurrents run deep within the Latino Shopping psyche. Here are some notable study findings.
 
“Line in the sand” -- Our research revealed that Hispanic shoppers see perishable vs. non-perishables shopping as segregated trips with a clear hierarchy: Perishables first, non-perishables second. Over the past few years and across numerous studies, we have seen the growth of Latinos in the Mass Channel, fueled primarily by non-perishable mission trips. We have learned that produce and meat are anchor items on the grocery list -- but more importantly, are trip drivers. Of course, Walmart and Target are clued into this little secret and are actively looking for ways to sell more grocery items to Hispanics -- but cannot do it as well as the independent channel because at their core, they remain a mass merchant for “non-perishables.”
 
“Focused frequency” -- In the country of origin, there are many more frequent trips to the market due to a number of factors (reduced pantry and refrigerator size, more limited income, a quest for freshness).  Latino shoppers in the U.S. cannot go to the grocery store every day -- however, this segment does make more store visits. These visits are very purposeful, and independent retailers know this, which is why they have “value meat days” and “value produce days.” Given the higher predisposition of this shopper segment to make a trip to the store, honing in on trip drivers will yield more trips.
 
“Fresh and alive” environment – Every time I walk into an independent Hispanic store, I am overwhelmed by the sense of “Vida” or life in the store. Often, these stores are not neat or perfectly structured but are colorful and vibrant -- even somewhat disorganized. Larger and more consolidated retail operations have difficulty catering to the Hispanic shopper who is looking for an authentic Mercado experience.

Standardization and efficiencies tend to “tone down and control” the retail environment for obvious cost reasons, creating a less “Mercado-like” experience and a perception among Hispanic shoppers of  “less freshness.” However, the less structured and more authentic Mercado merchandising (particularly in grocery) telegraphs freshness. The fruit is piled high at independent stores because it gives a sense of abundance and recency -- “this just came off the truck; it must be fresh.” More store employees in the produce section gives it a more personal service experience and energy. The rustic and colorful décor imparts the sense of a simpler and less complex supply chain, as if the produce came straight from the field.
 
The Hispanic shopper who goes to Walmart goes for the value -- not necessarily the experience. However, the importance of perishables within the basket and how these items are portrayed in-store are half the battle with Hispanic shoppers. It’s not just what you say, but how you say it that matters with this shopper.  Equally important, it’s not just what you carry but how you carry it that resonates with Hispanic shoppers.