YOUR NEW NEIGHBORHOOD

How your shop can win over the neighborhood.

By Hector Orci

It’s a fact—we’re a country with all different nationalities, cultures and demographics. And, frankly, that’s what makes our country great. On the whole, the diversity is a blessing because it forces us to constantly learn and try new things.

However, many small businesses find this frightening and consider it a problem. With diversity comes constant change in metropolitan areas—one ethnic group moves out and another moves in. So how is a small retailer supposed to succeed with the new demographic? How are they supposed to stay afloat in the ebb and flow of ethnicity in their neighborhood? Is it even possible? Absolutely, yes.

There are a few key things a retailer needs to know and practice to succeed with diverse ethnic communities. While these tips apply to all ethnic communities, we’re going to focus on the exploding Hispanic population in Chicago for this example. According to the 2000 U.S. Census, Chicago has the third largest total population in the nation and, of that population, 26% are Latinos. 

It is a formidable market with tremendous spending power that cannot be ignored. In fact, according to the Selig Center for Economic Growth at the University of Georgia, Hispanic buying power was above $580.5 billion in 2002 and is projected to $926.1 billion by 2007.

Learn About Your New Customers
First and foremost, retailers need to know who their customers are, especially when the demographics in a neighborhood change. It seems like the simplest of ideas, yet many small and entrepreneurial companies go out of business because they don’t adjust to changes in their customer base.

If you own a small store, you may notice that the neighborhood around you is becoming increasingly Latino. A first reaction for many people is to get scared and fear for the success of their businesses because they are not Latino themselves. This perpetuates the myth that you have to be Latino to do business with Latinos.

However, Latinos are terrific customers. They patronize stores owned by all other nationalities—African Americans, Asians, everybody. Just like anyone else, they want to buy products and services where they get good quality and a good price. They love to try new things, but don’t typically like to change brands. So, if you get them to try your product and win them over, they’ll be loyal customers.

It is possible—and frankly rather easy—to win this market segment over. Latinos across the board are very big on being invited. If they’re not invited in a way that is personable and obvious, they’ll simply go somewhere else. By putting a sign in the window that says “Bienvenidos,” “Welcome,” or “We welcome our Latino Community,” they know they are welcome and will happily enter your store. It is not as important if the sign is in English or Spanish, since most Latinos already speak enough English to be involved in commerce. They need to feel respected and comfortable.

Speaking of being welcomed, Latinos are a very polite culture and expect to be treated with politeness. This makes them feel comfortable and we all know that when you feel comfortable, you tend to spend more money. It doesn’t matter how great a product is or what a deal you have on it, if a Latino customer thinks he/she isn’t personally respected, they just won’t do business with your establishment.

Tailor Your Offerings
A one-size-fits-all approach just won’t do. You can’t expect Latino buyers to want the same things that the formerly Russian, Korean, Irish, Italian, or other community requested. You must tailor your merchandise—not completely—only slightly. 

If you owned a small jewelry store in an Irish Catholic neighborhood, your products would include medallions of Catholic saints. However, in a primarily Latino neighborhood, you can entice Latino buyers by offering traditional Hispanic jewelry such as virgin medals: Guadalupe for the Mexicans, Del Cobre for the Cubans and de la Caridad for Puerto Ricans. 

Want another example? Let’s say you owned a small bakery in a Jewish neighborhood. You would carry all the cultural favorites such as challah bread, rugalach, and marble cake. Well, the same goes for a bakery in a Latino neighborhood. With Latinos, family activities such as birthdays, anniversaries, weddings and the like are at the forefront of their lives. So, as a bakery owner in this neighborhood, you would feature cakes of all sorts, along with the traditional pastries and cookies familiar to the culture.

The basic lesson here is that if you do it early and you do it right, you will gain loyal customers. Remember, the Latino culture is one steeped in family roots. Latinos value family and friends more than anything else, so if you capture one Latino’s business, more are sure to come. Your customers will tell their friends and families that you welcome their community in your store, and they, in turn, will patronize your establishment.

On the flip side, if you don’t make them feel welcome, not only will they not patronize your store, they’ll also tell all their friends and families to stay away from your store. Given that a typical Hispanic household is 33% larger than a general market household, this could mean the end of your business. It’s easy to welcome new customers to your establishment when you are committed to servicing them. •

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