Scale (or multi-brand) retail programs have been around for a long time. This is not new news. However, when it comes to Hispanic scale programs, the dynamics tend to be a little different.
Below are takeaways from working with brands in the CPG, spirits and beer categories.
1. Scale makes more sense for Hispanic shopper programs, strictly from a budget perspective. Hispanic marketing budgets have “diseconomies of scale” programs that bundle multiple brands for a specific occasion or purpose. When budget allocations are 10- 15% of the total shopper marketing budget, a Hispanic budget allocation will barely be enough to cover fixed costs.
Variable costs, such as printing, shopper incentives, dealer loaders, etc., are not even considered. Therefore, when marketers have the opportunity to bring in several partnering brands, it’s finally possible to afford in-store and pre-store messaging.
2. Unique occasions give marketers an opportunity to zag while other brands zig. In the Hispanic market, there are unique moments and occasions that provide an incremental opportunity to reach shoppers. In addition to the traditional holidays like Cinco de Mayo and Independence Day, there are also Latino-centric occasions such as Hispanic Heritage, Día Del Niño, Premio Lo Nuestro and Latin Grammy’s to consider.
Think about occasions where Hispanic shoppers may more receptive to a particular proposition from your brand and category.
3. Master brands can have stronger equity with Hispanic consumers. Brand names such as Nestle, Unilever, Procter and Gamble resonate and drive more equity. The reasons for this include a stronger presence in country of origin and more frequent scale programs and scale portals which actively target Hispanic shoppers.
4. There are some great “lighthouse” online scale platforms such as El Mejor Nido (Nestle), Bienvenida Vida (Clorox), Dias Grandiosos (Kelloggs) and Comida y Familia (Kraft) that have done a terrific job building a following by pushing great content to Latinos. However, in many cases, these Hispanic scale platforms could do a better job helping turn prospects into shoppers through location-based targeting of offers and coupons.
Wouldn’t it be great if I just typed my Zip code and the portal just told me where and in what store I can find the ingredients being marketed at the best price?
5. A magazine or media partner can bring a lot to the table. I have seen many successful scale programs that tie in a conversion incentive to generate sell-through through media properties. Bringing a media partner can add a layer of excitement with buyers/retailers, thus generating more sell-in.
The dynamics for a Hispanic retail scale program maybe a little different but if you can align the stars the right way, they can also be a very effective tool to drive volume during key periods.