Kmart has launched a Spanish version of its weekly advertising circular. The retailer hopes that digging deeper into the Hispanic market will help solve its woes – but Kmart needs to be aware of hidden caveats in marketing to the ethnic market. In particular, in-language is not a substitute for in-culture awareness.
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Troubled US retail giant Kmart has begun distributing its 700,000 sales circulars in Spanish at 160 of its stores. The Spanish circular also now appears within ten Spanish-language newspapers. With this move, Kmart becomes the first major discount chain to offer this service.
Kmart has targeted the Hispanic market for some time now. Store managers in markets with a large Hispanic population are encouraged to stock Spanish brands and merchandise. Today, more than 360 Kmart locations display the Estilo apparel line, specifically targeted at female Hispanic customers. Prior to this move in print, Kmart has run its ‘Stuff of Life’ campaign into Spanish-language radio and television commercials.
The Hispanic market is clearly expanding in size and spending power. Hispanics have now surpassed the black population as the US’ largest minority group. Accounting for 12.5% of the population, this group is expected to have the highest population growth over the next ten years. Collectively, Hispanic spending power rose by a CAGR of 7.3% between 1990 and 2001, second only to the spending power growth of the Asian community.
However, additional analysis shows that most of the acceleration in Hispanic spending power has been driven by population growth, rather than growing individual purchasing power. Kmart must remain aware of this subtlety as it decides its product mix.
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By GlobalDataThe company must also remember that while Spanish translations will allow Hispanics with little English skills to understand the advertising messages, the conversion rate will remain low without sufficient in-store support and an understanding of the subcultures within the vast Hispanic market.
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