[More on Wal-Mart]
Whenever Margarita Natividad of Pecos, Texas, joins her daughter in Dallas for an extended visit, they enjoy shopping together at a local Wal-Mart for items including books and movies in Spanish.
"She likes the prices," Rosie Saucedo says of her mother and their swings by Wal-Mart. "A copy of [best-selling] "The Purpose-Driven Life" costs $9.97 here. The only other place she could find it in Spanish was at a Christian store and they charged $20."
Wal-Mart Stores Inc. has been the largest retailer in Mexico for five years. But until recently, its approach to targeting Hispanics in the U.S. has been low key. Now the world's largest retailer is stepping up efforts to attract America's fastest-growing immigrant group.
A little over a year ago, Wal-Mart began printing its monthly ad circulars in English and Spanish. It also launched its own Hispanic magazine, called Viviendo [Living], which it distributes free at 1,300 stores heavily shopped by Hispanics. The glossy quarterly magazine features profiles of Latino leaders and celebrities next to ads highlighting Wal-Mart's expanding line of products and services geared toward Hispanics.
In other moves, Wal-Mart recently announced it teamed up with Sprint Corp. and several other companies to offer a new prepaid wireless service expressly targeted to Hispanics. In the fall, it began stocking a line of bathroom and tabletop accessories from New York restaurateur and cookbook author Zarela Martinez, whose designs are inspired by Mexican folk art and culture. And Wal-Mart's three-year-old financial-services department offers cut-rate fees on money wire transfers, a big lure for immigrants who support family back home.
The Census Bureau said last year that Latinos are the country's largest and fastest-growing minority group, now representing about 14% of the population. Hispanic disposable income has risen 29% since 2001, twice the overall U.S. increase, reaching $653 billion last year, according to a University of Georgia study.
Wal-Mart, in some ways, was later to the game than other retailers. Sears Holdings Corp. began heavily targeting Hispanics in 1993 with the launch of a quarterly magazine called Nuestra Gente [Our People]. Sears also was one of the first to market credit cards to Hispanics. In 1999, Target Corp. followed, refashioning its merchandise mix in heavily Hispanic markets in the U.S., developing special marketing events and launching its own Hispanic magazine.
"As the Hispanic community has grown, our efforts have grown, too," says Wal-Mart spokesman Gus Whitcomb. "You're seeing a lot of extra effort on our part to attract Hispanic customers for the first time and to keep them coming back."
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*Buying power is defined as the total personal income of residents available, after taxes, for spending on goods and services. source: Selig Center for Economic Growth, University of Georgia |
Wal-Mart's efforts appear to be paying off. In a recent study of 500 Hispanic shoppers by NOP World, a marketing-research firm, 36% of respondents chose Wal-Mart as their favorite store. J.C. Penney Co., Sears and Target tied for second favorite, chosen by 4% of the respondents. The survey also asked respondents what factors they consider most important in choosing where to shop. Low prices, cited by 77% of respondents, was most important.
Wal-Mart's approach in targeting Hispanics reflects the decentralized way the retailer runs its chain. Unlike many other retailers, Wal-Mart doesn't have a national manager of ethnic marketing. Through a program Wal-Mart calls "store of the community," every category buyer is responsible for tailoring merchandise to each individual store's demographic, says John Westling, Wal-Mart's senior vice president and general merchandise manager for food, cleaning supplies and paper goods.
Wal-Mart's vaunted inventory-tracking system and data-mining capabilities allow it to quickly monitor changes in customer-buying patterns on a store-by-store basis. In several of its South Florida stores, where the population is heavily Cuban, for instance, Cafe Bustelo and Pilon coffee brands outsell Procter & Gamble Co.'s Folgers, Wal-Mart's best-selling coffee overall.
Mexican-Americans represent about 58% of the U.S. Hispanic population, and Wal-Mart de Mexico's 697 stores and restaurants in Mexico help expose immigrants to its brand before they arrive.
And Wal-Mart's U.S. and Mexico buyers and executives are increasingly working together to get the right products for both Mexicans and Mexican-Americans. Celia Clancy, Wal-Mart's general merchandise manager for women's and children's apparel, noticed Wal-Mart stores in Mexico devote a larger percentage of total space to baby and children's clothing than its U.S. stores do. And they have a larger selection of items with licensed cartoon characters.
Ms. Clancy plans to tweak her product line in the U.S. to reflect that. And she also is teaming up with her Mexico-based colleagues to bring more Latino-flavored women's apparel to Wal-Mart's U.S. stores. "They do a better job in women's apparel, serving a higher level of fashion," Ms. Clancy says. "We are partnering with our peers there and exciting things are coming up."
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