6280: Buy Now, Immigrants!

From The Los Angeles Times…

Retailers catch on to the buying power of immigrants
With sales wilting, big-box stores are starting to cater to shoppers whose primary language is not English.

By Tiffany Hsu

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.

And when staff run into translation problems during a complex sale, they just hop on the new website and consult one of the bilingual videos posted there.

“When you’re making big purchases, you need to ask intricate questions, and you feel more comfortable doing it in your own language,” Kenney said. “Having employees that are a mixture of all the communities makes shopping a more comfortable experience.”

At one point, only two Korean speakers worked at the store, just a few miles from Koreatown. Korean immigrants were avoiding the Best Buy, Kenney said, so she tripled the number of Korean speakers and put a coupon in a Korean-language newspaper.

Employees also noticed that on weekends, Latino customers made shopping a family event. So Kenney offered special deals on weekends and brought in popcorn, balloons and actors dressed as SpongeBob SquarePants to occupy children while their parents shopped.

Retailers who cater to immigrant populations say they are well aware of the rising competition, and they are adding to their arsenal of tactics to lure customers.

Kim’s Home Center in Koreatown, for example, stocks its electronics department with products from Korean companies such as Samsung and LG. Also, “we have an advantage over other dealers because we mainly speak Korean in our store,” said Si Youn, vice president of the 20,000-square-foot store.

At La Curacao, the 10 stores operate under the motto “Un poco de su país” (A little bit of your country), hoping that aisles hung with Brazilian and Spanish soccer jerseys and walls drenched in Mayan and Aztec symbolism can draw customers through the sheer force of nostalgia and homesickness.

Still, with the economy in a rut, immigrants are penny-pinching like any other consumer, shopping and spending less, defaulting on their store credit cards.

“It hasn’t been easy,” said Mauricio Fux, executive vice president of La Curacao, whose headquarters are in Los Angeles.

To stay competitive with the big chains, La Curacao tries to demystify the electronics it sells to its customers.

For example, La Curacao offers to send staffers to the homes of first-time computer buyers for two hours of in-home training in Spanish if they buy a warranty package. (Prices on these vary, but an optional four-year warranty on an $800 Sony Vaio laptop costs about $200.)

In stores, signs in Spanish—such as one hawking a remote control that reads “No se complique la vida—Todo en un solo control universal” (Don’t complicate your life—everything in one universal control) -- are scattered across the sales floor.

They also recognize that many of their customers don’t have established credit or hefty checking accounts, and will work with them on payment terms.

La Curacao can’t always compete on prices with the chain stores, but that kind of flexibility on payments helps the store compete, Fux said.

When buying his TV, Turan opted to pay $99 each month over nine months instead of $77 each month for 12 months. To be approved for the loan, he was required to produce only an ID from the Mexican consulate, not a California driver’s license.

That flexibility makes buying expensive electronics more appealing to immigrants in tough times, said Turan, who has gone to La Curacao in the past to buy an Xbox for his son, a laptop and a computer that he sent to his sister in Mexico.

“We try to offer things that are relevant,” Fux said. “If we did not evolve and just provided the same tired thing, people would stop coming.”