Posted on December 24, 2008

Retailers Catch On to the Buying Power of Immigrants

Tiffany Hsu, Los Angeles Times, Dec. 24, 2008

Delfino Turan remembers his first trip to a Best Buy store, but not very fondly. Turan, at the time a recent immigrant from Mexico, said he could barely understand what salespeople were saying. What’s more, he couldn’t afford to pay for the purchases he wanted upfront, and the store didn’t offer to extend credit. So Turan now shops for electronics at the La Curacao department store near downtown, where he went the other day to replace the broken TV in the lunch truck he operates. “Here they understand Spanish, and they understand people like us,” he said after signing off on a down payment. “They treat you really well, they give easy credit, and they don’t ever say no.” Catering to immigrant customers has long been the stock in trade of ethnic-focused stores such as La Curacao Famsa, which caters to Spanish-speaking customers, and Kim’s Home Center, a favorite of Korean immigrants. But as electronics sales wilt in the tough market and immigrants’ buying power blooms, major big-box retailers such as Best Buy Co. and Wal-Mart Stores Inc. are catching on and catching up.

Many are using bilingual websites to turn online browsers into in-store clients, while others are hiring staffers with language skills and updating in-store signs and displays to appeal to immigrants.

“The Famsas and La Curacaos of this country have had those clients to themselves for a long time,” said Juan Tornoe, an independent consultant who has worked with companies such as Domino’s Pizza and Budweiser on Latino-targeted advertising. “Stores are looking for customers, and the wise ones are reaching out to immigrants through multiple channels.”

Wal-Mart activated its Spanish-language website in September to coincide with Hispanic Heritage month and has special holiday sites in Chinese and Vietnamese.

Last year Best Buy launched a bilingual website with a Spanish-language option after some customers complained that they couldn’t research products. Activity on the Spanish site has since far exceeded that of the original site, executives said. The company also recently signed Mexican soccer star Cuauhtemoc Blanco as a brand ambassador and has put up bilingual signage at 350 of its more than 1,000 stores, said Jeff Weness, director of Hispanic initiatives.

One reason for the initiatives is buying power. Latinos alone spend more than $870 billion on consumer products. By 2015, the amount is expected to boom to $1.3 trillion, or 12% of total U.S. purchasing power, according to Hispanic Business Inc. At the entrance to the Best Buy in West Hollywood, a sign boasts that employees speak 15 languages (including Russian, Bengali and the Nigerian languages Ibo and Ogba). In the last six years, the store has hired a burst of young, second-generation immigrants, said manager Margie Kenney.