Spanish Lessons

August 31, 2006  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on September 2006 Citizens of Hispanic origin have been a part of U.S. culture for hundreds of years, predating many other population segments in large parts of what’s now the United States by centuries. And while some furniture retailers have made Hispanics a key customer group for years, some are just now exploring the potential for nation’s fastest growing the demographic.

Retailers with experience among Hispanic consumers, though, warn that it’s not a one-size-fits-all proposition by any means. The overall demographic varies hugely in terms of language use, cultural attitudes and the extent to which they blend with so-called mainstream American life.

Especially for more recent Hispanic arrivals, country of origin is another variable. You only have to look at how Americans of, say, Scottish, Irish or Italian descent retain a sense of pride and community with their mother countries to understand the way Hispanics can vary greatly in terms of cultural attitudes.

Encountering Hispanic customers is certainly a new experience for many furniture retailers. Philip Williams, manager of Williams Furniture in Gilmer, Texas, for instance, described selling some furniture to a woman who spoke no English, but had her 13-year-old daughter translating for her.

“Since then, I’ve had other adults come in our store who apparently spoke only Spanish or Chinese,” he said. “I speak virtually no Spanish, and no Chinese whatsoever. Our area of East Texas had a very small Hispanic population when I was growing up here in Gilmer in the 1950s, ’60s, and early ’70s. But today, we have a burgeoning population of these folks, and we’d probably be well-served to learn at least some conversational Spanish, and to use a bit of Spanish in our advertising.”

Fact is, the whole language issue can be a hot button these days. The news media has put a spotlight on illegal immigration, and Williams voiced concerns about that issue when considering advertising in Spanish, but still hopes to appeal to a new prospective customer base.

Commitment Counts

Some retailers have a clear head start on attracting the business of Hispanic consumers. Dearden’s, for example, has targeted the Hispanic market in Los Angeles since the 1960s, said Ronny Bensimon, president and chief operating officer. He estimates that Hispanics account for close to 90 percent of the business at Dearden’s seven stores in the greater Los Angeles area.

The retailer sells not only furniture, but also appliances and electronics. Bensimon said running a few ads in Spanish is not enough to guarantee access to Hispanic consumers. It takes long-term strategic commitment.

“Don’t do it halfway—everyone wants a piece of the Hispanic market, but not many want to make the commitment,” Bensimon said.

The effort involved in developing Spanish-language advertising, a key especially among newcomers to the states, bilingual capability on the sales floor, and merchandising geared toward Hispanics, in fact, could well lead many retailers to pass on a major effort in that direction.

At Dearden’s, though, that commitment even includes shipping to Mexico, El Salvador and Guatamala at no extra charge.

“You can’t go after everyone, so if we go after a group, we make sure it’s one that’s growing” Bensimon said. “I think you really have to pick your targets, and if you’re serious about approaching this segment, you almost have to decide to do business in Spanish or English.”



Addressing the Culture

Continental Furniture has three 25,000-square-foot Chicago-area stores, and has catered to the Hispanic market for decades. Founder Ray Portugal extended the sewing machine sales business he began in the 1951 to open storefronts where furniture—plus appliances and electronics—have comprised most of the product offerings since the late ‘60s.

From its first store, Continental has followed the Hispanic market as that demographic spread throughout Chicago-land, always with a focus on offering credit to a consumer base that was in need of purchasing power. Credit on Continental’s own paper remains a mainstay of the business, which still counts on Hispanic consumers for 85 percent of its sales, but the retailer has adjusted over the years to accommodating the needs of varying segments of its targeted demographic.

Continental’s original customer base primarily consisted of first-generation Hispanics, mostly Puerto Rican in origin, who were moving to the Chicago area in the ‘50s and ‘60s. Now that consumer base includes the children of those immigrants and their offspring, many of whom are fully acclimated to life in the United States.

Mitch Portugal, president of Continental Furniture, said the company’s targeted audience has changed a lot in the 30 years he’s worked in the business. He has the advantage of having lived for a year-and-a-half in Mexico, where he not only learned Spanish, but gained an understanding and appreciation for the culture and the people.

“Now we’re faced with second- and third-generation Hispanics,” he said. “They’re bilingual at least, and the third generation is more comfortable coming into the store and speaking English. They’re more educated, they’ve established credit, bought homes, and they’re moving to the suburbs.”

That’s a far cry from 40 years ago, when most of Chicago’s Hispanic community lived within a 10-mile radius of center city.

While there’s a generation of Hispanic consumers who pretty much follow the same media and advertising influences as other U.S. consumers, Portugal said retailers who hope to attract this segment had better pay attention to its distinct culture.

“Even the younger (Hispanic) consumers here are still very attached to their culture, especially the music,” he said. “A lot of our advertising goes to those radio stations they’re listening to.”

Continental, following market research tracking its consumer base, opened a second store on Chicago’s south side, then a third location in the suburb of Melrose.

“We’re still going after that Spanish-speaking or bilingual customer who relies on credit—I haven’t changed the way we do business creditwise,” Portugal said. “We’ve never done ‘no-no-no’ like you typically see it—it’s always been four months, no interest.”

He cited Harlem Furniture as another Chicago area retailer that’s done a good job building business in the Hispanic community.

“Harlem Furniture has gone after both groups, those newer arrivals and people who’ve been here a long time, and it’s easier for them because they have so many stores,” Portugal noted. “They’ve captured some of the more sophisticated Hispanic customers.”

Portugal said retailers hoping to build business among Hispanic consumers need to build a connection that goes beyond just selling furniture.

“You have to understand the culture and the people,” said. “If they don’t feel the Hispanic culture has a place in a store, they don’t connect.”

Retailers can do all the advertising in Spanish they want, but the real key is involvement in the local Hispanic community, Portugal said.

“We take part in all the local celebrations such as Cinco de Mayo,” he said. “We also host a health fair in each of our stores every summer with blood pressure testing and all sorts of health screenings. We sponsor soccer and baseball teams in local leagues. We’ve committed ourselves to participating in the culture. If you want to address that consumer segment you have to make a paradigm shift—putting a couple of Spanish speakers on the sales floor just isn’t enough.”

The reward for Continental is strong word-of-mouth out in the community.

“In any given month, 50 percent of our sales are with repeat customers, and 20 percent are referrals from existing customers,” Portugal said.



A Different Type
of Shopper

Frank Lorenzo worked on the sales floor at Leath Modernage in Miami, where he was a top producer, before going to the supplier side of the business. Now he runs a large rep operation for AICO in South Florida.

He said that addressing the Hispanic community requires a different way of thinking, and that salespeople catering to the higher end of the demographic had best be well-informed.

“To a Hispanic, especially in better price points, post-delivery service is extremely important, and they’ll give you a lot of questions on those issues prior to purchasing,” he said. “Getting all the details on quality and construction are very important. They won’t just accept that something looks good, but ask a lot of questions about how the product is made, exactly what each veneer or detail is made from. ... A lot of non-Hispanics just buy based on how an item looks and when it will arrive, but this market expects all the details.”

Portugal at Continental noted that his Hispanic customers are trading up more than in the past.

“Back in the early days, we’d advertise three rooms of furniture for $399, and we had a lot of borax promotional product, carved woods and elaborate flower prints” he said. “Now we’ve developed into carrying more contemporary looks, because that’s where the market seems to be going.”

“The Hispanic consumer now will spend extra money to buy better-quality items,” he added. “We now carry Sealy bedding and the step-up line from Ashley, Millennium, and our average sale is more than $1,600. Six or seven years ago, it was around $1,000. Since we offer credit options that let customers make a down payment, we can sell up.”

Also helping to build those tickets are packaging options that include accessories such as lamps, and bedding to add onto mattress and bedroom purchases.

Hispanic consumers tend to view furniture shopping as a family affair, said Pedro Capo, chief operating officer of El Dorado Furniture, a Miami-area retailer whose own roots lie in the Cuban community that came to the United States after Castro’s takeover of the island nation.

“The Hispanic family will come to buy furniture together,” he said. “That ties in to the whole family background that is so important to Hispanics.”

Hispanics also tend to suite up, he said, buying matching goods to outfit particular rooms.

“They also like colors—they don’t like dullness,” Capo said. “In our market, that has a lot to do with the Caribbean influence. You’ll see them looking for earth tones, but also blues and greens.”

Capo said that only recently he’s seen suppliers look to merchandise and marketing materials such as bilingual hang-tags that address the needs and tastes of Hispanic consumers.

“Until recently, the effort has been very minimal,” he said. “Ashley was among the first to have Spanish on the cartoning and give (bilingual) instructions on how to handle the merchandise.” HFB