Minority micro-marketing - retail industry

Discount Store News, Dec 6, 1993 by Paul Demery

As discount department store retailers turn toward the 1994 horizon, they face more than style and color decisions in sketching a successful appeal marketing strategy. Demographic shifts are also defining the way they plan their businesses as minorities exert a greater influence consumer buying patterns.

Minority population sizes are enough to whet any marketer's appetite, as indicated by the most recently available data from the U.S. Census Bureau. The U.S. Hispanic population, the country's fastest growth minority group, is already equal to that of Canada, at 25 million. And it's projected to surge well into the 21st century, surpassing American blacks by the year 2010 with 40.5 million people. Black Americans, now numbering 32 million, are projected to reach 40.2 million by 2010, while the Asian-American population is projected to increase from 8.8 million to 12 million.

Income figures have also gone up among minorities, but more important for apparel marketers is a corresponding rise in clothing purchases. Blacks, for instance, surpassed non-blacks in the amount of money spent per household on apparel/footwear, according to the Census Bureau's Consumer Expenditure Surveys.

In overall apparel spending, blacks' annual expenditures per household rose 60 percent between 1984 and 1991, from $1,122 to $1,803, surpassing that of non-blacks, whose apparel expenditures rose 28 percent, from $1,344 to $1,726.

In separate apparel categories, blacks' expenditures pulled to nearly even with non-blacks' in men's, women's and children's wear made for 2- to 15-year-olds. Blacks nudged ahead of the others in purchases of clothing for children under 2. They widened their long-time lead in footwear, for which their expenditures surged 81 percent to $364.

"There is a huge potential minority market and it's getting larger, and we have to learn how to market to it better," says Cecilia Swartz, senior vice president, soft lines, Bradlees. Bradlees, she adds, will hone such skills as it expands in New York and other urban areas.

Identifying and selling these lucrative markets is developing as a science unto itself.

Sears uses its SAMS (Sears Apparel Merchandising System) to electronically record what is sold in stores by size, style and other categories. Although SAMS doesn't specify data by consumer groups, the "combination of a buyer's alertness and SAMS" enables the retailer to identify which products are most needed to satisfy a particular store's dominant demographic groups.

Sears discovered a strong demand for a new hosiery line in stores frequented by black women. In Asian communities, it found a demand for a broader selection of smaller sizes in all apparel categories.

J. Baker, which runs two shoe store chains and operates footwear departments in nearly 2,000 discount stores, uses a multi-prong strategy. It commissions a consulting firm to produce an ethnic blueprint of a store's surrounding neighborhoods and maintains an "active communication" with district managers on their own observations. It also seeks vendors who display an awareness of minority markets, including one that specializes in children's ethnic shoes. And it sends buyers into the streets "to look at what's on people's feet..."

"Our breakthrough," says Linda Kanner, J. Baker's senior executive vice president, is that we can make sure we don't (offer) items that don't have meaning to shoppers." In stores frequented by Hispanic people, for example, J. Baker will skew its merchandise toward dressier styles to fit petite shoppers: lots of high heels in small shoe sizes.

Ross Klein, vice president of marketing for Bonjour, says it is important to get direct comments from minority consumers on style and fit--a strategy Bonjour carries out by pla cing its 800 telephone number on bilingual ads in areas such as Miami and by printing hangtag messages that invite consumer comments. Although he describes Bonjour's product line as "pretty much universal," the company takes into consideration frequent requests for variations such as particular silhouettes and colors.

Indeed, once consumer demand is ascertained, marketing and merchandising take extra effort.

"You can't take a generic ad and hope it works in a Hispanic market," says Edwin Jorge, director of special projects at New York City-based El Diario/La Prensa, a Spanish-language daily newspaper that offers marketing consulting services to businesses seeking Hispanic markets. "Particular words and how you say them are important. Words you would say to a Cuban audience would not necessarily attract a Central or South American Hispanic market."

Rose's Stores, which operates 215 doors from Maryland to Mississippi, has identified about 50 stores to which it ships special products for a strong African-American presence. Products include Maybelline Shades of View cosmetics and an "ethnic-based" private label hosiery program tagged with the Rose's name and designed with a variety of shades and sheer textures to complement a black woman's skin color.