If by "clubbing" you think I refer to a Friday evening trendsetter or Saturday midnight music lover, actually I was referring to that apple of the CPG manufacturers' eye, Hispanic shoppers. That is, the regular weekend Latino customers at Sam's Club, Costco Wholesale, BJ's Wholesale Club, and other shopper club stores across America.
Latino shoppers are quite the clubby influencers when it comes to the club channel — that, according to our latest shopper marketing research, i.e., the recent quantitative study to which I referred in my two preceding columns.
At the national level, our Hispanic shopper study revealed that Latinos ranked Walmart #1 and Target #2 when asked their top shopping destination over the past three months. But Costco and Sam's were #3 and #4, respectively. In fact, the incidence of Latino shoppers at Costco and Sam's was higher than for the general market shopper. So, although I knew that Hispanic shoppers like to "go clubbing," the new data made me want to dig deeper for the real reasons, which follow.
1. Big Families. Hispanic families are somewhat larger (3.4 persons per household) than non-Hispanic (2.4 persons). The traditional extended family is more common. So, buying in bulk, i.e., mayoreo (yes, there is a Spanish verb for the practice), is merely common sense. Even non-club retailers cater to this behavior by offering club packs across many categories. Next time you are in one of Kroger's Food 4 Less stores, you will see what I mean.
2. Small Business Ownership. Hispanics are living the American dream by owning a disproportionate percentage of American small businesses. A recent report by GeoScape noted that over the past seven years Hispanic businesses grew at a rate of 42%, that is, at twice the rate for all U.S. businesses. These Hispanic enterprises, whether a bodega or restaurant or shop, rely on the club channel as their supplier of choice. Nowhere is this more evident than at cash-and-carry outlets in the New York metro area, such as the leader, Jetro’s. Although technically not a conventional club because of its strict focus on business owners (primarily grocery retailers and foodservice operators), Jetro’s wholesales to more than 100,000 independent bodegas in the U.S.
3. The Experience. A lot of both the qualitative and quantitative research I've seen corroborates the conclusion that the Hispanic shopper and the general market shopper shop differently. For starters, shopping for the Hispanic shopper is not necessarily a quick individual chore, but rather something done in a more pluralistic way (e.g., 141 index to shopping with spouse, 180 index to shopping with children). The in-store experience, in particular, is quite important, with ambassadorship being a key influencer. Have you ever seen the amount of sampling that goes on in this channel? I have often heard in focus groups that sampling at the club channel is how many Hispanic shoppers have been introduced to a new category or brand.
4. Treasure Finds. The club channel, particularly Costco, has a reputation for incredible finds by the impulsive "treasure hunter." Data along these lines indicate the psyche of the Hispanic shopper tends toward making decisions while in-store or in a shopping mindset, rather than being influenced so much by brand ads on radio, TV, newspaper, or Internet. Whether it's an in-store find or advertised on the pre-store circular, we know that one of the key drivers for shopping multiple stores among Hispanics (2.8 stores per shopping excursion vs. 2.4 for the general market shopper) is the concept of "stretching the budget." Data show that Hispanic shoppers, especially bicultural or unacculturated consumers, have a more pronounced behavior when it comes to treasure hunting, i.e., buying the best at each store/channel.
So what's a shopper marketer to do? Clearly, reaching shoppers in the club channel can be trickier for CPG brands because of the inherent limitations on in-store execution. Still, Latinos' love affair with clubbing makes a closer analysis worthwhile. The most effective tools are a mix of the obvious ones, like pallet skirts and in-store sampling, and the not-so-obvious, like pre-store direct marketing, purchase data targeting, and digital advocacy in social media and virtual communities.