NEW YORK — Purchasing of women’s apparel by Hispanic consumers has abruptly slowed down.
The decline comes even as the country’s Hispanic population of approximately 43 million is surging — and reaching critical mass in secondary markets from Arizona to Georgia — and as the group’s buying power is approaching that of the nation’s 38 million African-Americans.
Spending on women’s apparel by people who identified themselves as Hispanic — those whose heritage lies in a Spanish-speaking culture — rose by just 2.1 percent in the 12 months ended May 31, to $13.4 billion, according to The NPD Group. The increase was less than a third of the overall growth in women’s apparel purchases, which grew by 7.25 percent to $105.1 billion in the period.
The downtrend marked a reversal from the strong growth in outlays for women’s apparel by Hispanics in the 12 months ended May 2005, when the group’s expenditures rose by 9.4 percent to $13.1 billion, up from $12 billion in the prior-year period, and easily outpaced a gain of 2.3 percent in overall spending on apparel.
However, the realization that an in-culture approach to marketing is as important as a savvy use of language, plus a flurry of new targeted media, could compel apparel brands to boost their outreach to the Hispanic community and recoup some of the lost spending. Twentieth Television’s English-language “Cristina’s Court,” hosted by Cristina Perez; ABC’s “Ugly Betty,” a fashion world dramedy produced by Salma Hayek, and MTV Tr3 (pronounced très), will all air starting this fall. Targeted media making their debut recently include Nashville’s WNVL-AM, a former satellite-fed Spanish hits station, which, in April, was reformatted as a personality and music-driven Spanish-language station, and Entravision’s WHTX, channel 43 on the Comcast Cable system in western Massachusetts, reaching roughly 130,000 households with news and entertainment in Spanish.
In the past three months, Marshal Cohen, chief industry analyst at The NPD Group, for one, has observed a falloff in marketing aimed at Latinas (a word often used interchangeably with Hispanics) by various apparel players, after a year or so in which the likes of Macy’s, Target, Kohl’s and Kmart had upped such efforts. “Convincing the Hispanic consumer the brand is for the Hispanic culture is not as simple as the use of Hispanic music and models,” Cohen said. As a result, he added, apparel players have begun “throttling back” such efforts.
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Rather, Cohen advised, “It’s about communicating the essence of a brand and staying true to that.”
In 2004, the most recent period for which figures are available from the Association of Hispanic Advertising Agencies, spending by apparel marketers on Hispanic-targeted ads in print and TV was nearly flat compared with 2003. A Hispanic media share study conducted for AHAA by TNS Media Intelligence found that 19 apparel purveyors, led by Sears Holdings with expenditures of about $109 million, were among the top 250 advertisers in Hispanic-targeted print and TV in 2004, spending a combined $237.5 million. This compares with $237 million spent by 20 such advertisers a year earlier. Four companies offering apparel joined those 250 biggest spenders in 2004 — Nordstrom, Mervyns, Dillard’s and Levi Strauss — while four dropped off — Reebok, VF Corp., Saks Inc. and Polo Ralph Lauren.
In addition to fourth-ranked Sears Holdings, other leading Hispanic advertisers in 2004 included Wal-Mart, with expenditures of $54.1 million, ranking 11th; J.C. Penney, with $16.9 million, placing 44th; Target, $15.6 million, ranking it 45th, and Gap Inc., the 79th biggest spender, with a budget of $8.2 million.
Although such advertising efforts are not insignificant, observers like AHAA chairman Carl Kravetz, maintained apparel players would need to increase their marketing spending if they are to maximize the opportunity that Hispanic consumers represent. AHAA recommends that companies should allocate 7 to 8 percent of their national ad budgets to Spanish-language media, and another 6 to 7 percent of those budgets to target Latinos in English-language media.
“Can I be brutally honest,” Kravetz queried, when asked to evaluate the apparel sector’s marketing outreach. “I think it’s pretty pathetic. Basically, we’re seeing department stores, particularly the lower end, and jeans brands” reach out to the Hispanic population, Kravetz continued. “With the exception of Nordstrom, there’s not much [activity] in the high end. This is one of the missing-in-action categories of the world.”
The unrealized potential is considerable: The self-named Hispanic group ranked second only to those who designated themselves as white in spending on apparel, with the group’s $13.4 billion in purchases nearly 90 percent more than the $7.1 billion in purchases by African-Americans, the third biggest spenders in the 12 months ended May 31.
In addition, Jeffrey Humphreys, director of the Selig Center for Economic Growth, is projecting the buying power, or posttax personal income, of the country’s 43 million Hispanics in 2006 will reach “about equal footing” with that of the 38 million African-Americans. Humphreys expects the trend to continue into 2007, with Hispanics’ buying power topping African-Americans’ posttax personal income by a single-digit percentage.
The anticipated gains in buying power among Hispanics, Humphreys noted, are being driven mostly by population growth, which is expected to advance by 34 percent between 2000 and 2010. Increases in personal income are having less of an impact, with the Hispanic group’s income standing at a real median of $34,241 per household in 2005, 30 percent less than the $44,389 real median income of all U.S. households. In 2005, Hispanics had buying power of about $736 billion, or roughly 3.3 percent less than the $761 billion controlled by African-Americans, based on the Selig Center’s assessment of the multicultural economy.
With the question of how best to appeal to the country’s Latino consumers remaining a complex one, some marketers are beginning to focus more intently on messages with cultural resonance, rather than focusing primarily on whether a message would hold the most meaning if delivered in English, Spanish, or Spanglish — a combination of the two. “One big change now is people are thinking more in-culture versus in-language,” noted Melissa Karp Smith, senior vice president at Latino-specialist RL Public Relations and Marketing, whose clients include Nike, iPod and Verizon.
At Kmart, for example, Beatriz Rojas, director of multicultural marketing, noted managing programs for the multicultural community necessitates “ensuring a [culturally] relevant message and relevant media.” This week through the week of Aug. 21, Kmart will be testing Hispanic-targeted radio spots in Chicago and Los Angeles to see how well they complement the chain’s back-to-school TV campaign, which began on July 28. There are also bilingual signs posted in 150 of Kmart’s roughly 1,400 stores, predominantly in California, Florida, New York, Chicago and Puerto Rico.
At MTV Tr3, which will launch on Sept. 25, Emma Carrasco, the cable channel’s communications director, said, “One of the most exciting things about MTV Tr3 is it’s not about language. It’s about tapping into the unique cultural identity of Latino teens, who slide seamlessly between English and Spanish cultures.” Songs and interviews will be broadcast in English or Spanish, depending on the entertainer, on the 24-hour channel aimed primarily at Latinos ages 12-24.
At Fox Television, Perez, a 37-year-old bilingual Latina, will star as the judge in “Cristina’s Court,” a syndicated show she anticipates will draw marketers “who want to associate with and attract people like me.” However, Perez, born in the U.S., and raised here and in Mexico, was quick to add, “It is superficial to think someone would buy Kleenex just because [Kleenex] advertises on a particular show. It’s not enough that I’m Latina.”
Initial commercials during “Cristina’s Court,” slated to premiere this fall, are anticipated to stem from Fortune 500 companies, while advertisers with the biggest presence for MTV Tr3’s debut emanate from the telecommunications, automotive and soft-drink sectors.
The choice of language to use in a Hispanic-targeted marketing foray continues to be a tricky one. Language itself can’t carry a campaign and could even alienate people if its use is perceived as pandering, patronizing or just dead wrong, as in the awkwardness of a misappropriated word. “Sometimes I disagree with using a word here or there in Spanish or English,” Perez said, noting it can devalue an image or a message if it’s used incorrectly.
“The question is no longer whether to market in Spanish or English — you’re going to have to go after the different segments,” observed Betty Cortina, editorial director of 10-year-old Latina magazine, which is published largely in English with some Spanish sections. “L’Oréal wouldn’t put one ad on Lifetime, one in Cosmo, and say they’ve got the country’s women covered.”
While there has been some controversy over the use of Spanish communications in stores, observers noted the most effective language with which to reach Americans of a Spanish-speaking heritage continues to vary, based mostly on how long the audience being aimed at has lived in this country. For example, Spanish-language newspapers are springing up in so-called secondary markets, beyond the nation’s most populous Hispanic communities, in places like Georgia, North Carolina and Arizona that are seeing their populations surge, RL Public Relations’ Smith said. This spring, for instance, Thomas McSweeny purchased the rights to Nashville’s WNVL-AM because he’d been a corporate person for 12 years with Univision and wanted to strike out in a place, he said, “where the next [Hispanic] population surge will be — Tennessee, Georgia, South Carolina, Arkansas.”
And while Kmart has stopped publishing La Vida magazine, it continues to produce a weekly shopping circular in Spanish.
At the same time, said AHAA’s Kravetz, “Everyone would like to use English to target the younger, more acculturated Hispanic, but we only have one [major, targeted] English-language cable TV network, Si TV [in Los Angeles], and a few English magazines, like Latina, Urban Latino and Hispanic Business,” Kravetz continued. “Little by little, we’ll see more Hispanics in front of the camera and more English-language, targeted media in general.”