Industry Voices

Huge ethnic marketing opportunity identified for retailers

A recently released study from LoyaltyOne shows there is an enormous opportunity for retailers in the area of ethnic marketing. Specifically, African-American, Asian and Hispanic shoppers are not finding the products they want in their local stores, and these customers would buy more from stores that stock ethnic products than the typical shopper.

Several interesting facts from the study:

  • 59% of ethnic American consumers go to three or more grocery stores regularly in order to find the full product selection they are looking for.
  • 61% of ethnic consumers are not finding enough ethnic food/ingredients at their main grocery store.
  • More than half of consumers are going elsewhere to purchase ethnic food/ingredients: 33% of ethnic consumers go to a local independent market/grocer, while 44% go to a specialty food store.
  • 86% of ethnic consumers say that a grocery store that offers ethnic food/ingredients is considered when choosing where they shop.

The survey results suggest the opportunity for retailers and CPG brands isn’t just to grow market share and basket size with ethnic shoppers. Both ethnic and non-ethnic shoppers say they would cook ethnic cuisine more often if the ingredients were more readily available at their local store. Alongside 85% of ethnic shoppers who state that they would cook ethnic foods more often if the right ingredients were available, 65% of non-ethnic shoppers say they too would cook ethnic foods more frequently if their main grocery store carried a better ethnic variety.

Some leading grocers are using a three-pronged, customer-centric approach in taking advantage of the ethnic food opportunity. First, they analyze customer data to identify the stores which have customers that would present the most attractive opportunities for more ethnic or adventurous foods. Second, they identify items on the shelf that are not performing and can be removed with low risk to make space on the shelf to allow them to introduce new ethnic products into the assortment. Third, they take a rigorous Trial & Repeat approach for any new item introduced to ensure it is performing as expected. These retailers also understand it’s a delicate balancing act to pursue new opportunities while not alienating current shoppers and are mitigating this by understanding customer needs at a detailed level and identifying customers who are already purchasing products that may be similar or complementary to new ethnic products.

The bottom line from the survey results points to a huge opportunity in calibrating product mix to satisfy the desire for foods and products that ethnically diverse consumers are looking for. Retailers that take note and offer a product assortment to meet these needs will develop a loyal following of valuable customers that will only continue to grow in importance and profitability as the population and their tastes continue to increase in diversity.

Retailers can receive a free copy of the full survey results by contacting LoyaltyOne.

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