NEW YORK — Call it fashion’s blind spot.

That’s the unfortunate reality of the industry’s failure to focus on the country’s 11.1 million Hispanic women, a group that spent $6.6 billion on apparel during the 12 months ended this May, up 3.7 percent from the $6.34 billion spent a year earlier, according to NPD Fashionworld. That increase in apparel purchasing was one of only two posted by American women grouped by racial and ethnic background; the other was the 4 percent growth in purchases transacted by Asian-Americans, who spent $709.1 million in the 12-month period, up from $681.6 million.

That $6.6 billion spent by Hispanic women, though, represented only 8.1 percent of the $84.9 billion spent on apparel by women overall, illuminating the untapped potential Hispanic women pose to the fashion business: It’s a group that accounts for about 11 percent of the country’s female population, yet spends disproportionately on apparel.

Indeed, Hispanic women spent 0.86 percent of their median household income on apparel during the 12 months ended in April 2002 — a significantly larger share than the 0.76 slice expended by American women overall during that period, according to Mediamark Research.

With the passage of time, this opportunity will only loom larger. At work are a confluence of psychographic and demographic dynamics shaping Hispanic Americans — those whose heritage lies in Spanish-speaking nations — into an ever more attractive consumer market. Those forces include the group’s:

  • Sheer size — 39 million in 2002, or 13 percent of U.S. citizens — the Census Bureau said in June. With undocumented immigrants, it swells to about 47 million, estimated Lois Huff, a senior vice president at Retail Forward.

  • Rapid growth: 60 percent, or 23 million, are U.S.-born, a segment seen expanding by 36 percent in this decade, and 33 percent between 2010 and 2020, according to the Census Bureau and Pew Hispanic Center.

  • Rising income levels, translating into spending of $630 billion annually and a projected $1 trillion by 2007, if not a year or two sooner, noted Ingrid Otero-Smart, president of Mendoza Dillon, a communications agency and Hispanic specialist. Spending and population projections for Hispanics have generally erred on the low side.
  • Median age of just 24, versus 34 overall in the U.S. That means half of Hispanics, or 19.5 million, are ages 23 or younger — many of them the teens and young adults the fashion sector finds most desirable. Two-thirds of Hispanics, or 26 million, are ages 18-29, according to the Census Bureau.

  • Tendency to shop as a family, resulting in larger-than-average sales tickets per store visit, sources said.

  • Strong interest in being fashionable. For instance, 53 percent of Hispanics said they “feel the need to dress in the latest fashions,” versus 35 percent overall, found Yankelovich’s 2002 Hispanic Monitor.

  • Position at the “vanguard of pop culture,” observed Yankelovich president J. Walker Smith, among others.

    Despite the overwhelming statistical portrait of a fashion-savvy Hispanic woman who is ready, able and more willing than most to buy apparel, the fashion business has failed to respond because of incorrect perceptions stemming from a lack of knowledge of those traits, related consumer researchers, marketing consultants, media and ad executives. Although fashion is far from the only sector underserving these consumers, the void is particularly noteworthy given the group’s taste for stylish apparel and close attention to personal care and beauty.

    “The Hispanic consumer has been ignored by the fashion industry forever,” asserted Alex Lopez Negrete, president, chief executive and chief creative officer of Houston-based Lopez Negrete Communications. “Fashion brands working with better-to-upscale stores assume Hispanic consumers won’t buy quality, name-brand goods, due to annual median household income that’s lower than average,” he added, reflecting the broader view.

    In fact, median annual household income for Hispanic women amounts to $36,552, compared with $47,039 for all American women, according to an apparel consumption survey of women ages 18 and older, fielded by Mediamark Research in the second quarter of 2002. But the greater share of that income spent on apparel by Hispanic women than women overall — 0.86 percent versus 0.76 percent — shaved the difference in average spending per person to just $42.49 annually, or $312.84 among Hispanic women against $355.33 among all American women, Mediamark found.

    In addition, Hispanics are more heavily swayed by advertising, market research has shown. For example, a national AOL/Time Warner Hispanic Opinion Tracker Survey showed 14 percent of Hispanics “strongly agree” with the statement “I often make purchases based on advertising,” compared with only 4 percent of non-Hispanics.As a result, apparel has been left in the dust of marketing campaigns mounted by such sectors as automotive, packaged goods, food and beverage, which sources credit for having established an effective appeal to the Hispanic consumer. While apparel megabrands like Levi Strauss, Nike and Reebok have made forays into the Hispanic market at various times, they’ve yet to make a commitment to such efforts.

    “The better and upscale fashion brands don’t realize we’re getting better educations and jobs, our incomes are rising, and we are spending more,” Negrete noted. “Premium car makers like BMW and Lexus, and premium beer maker Heineken are doing a better job than fashion.”

    It is ironic, Negrete added, that “Polo Ralph Lauren, for one, has such a huge business in Latin America but does not focus on the Hispanic market here.”

    Indeed, 13 percent of Hispanics consider wearing designer clothes a “sign of success,” the Yankelovich 2002 Hispanic Monitor shows, nearly twice the 7 percent share of non-Hispanic whites who express that attitude, and nearly one-third more than the 10 percent of all non-Hispanics who said so.

    Further clouding the picture are apparel brands’ anxiety over being pigeonholed as Hispanic labels; the sector’s fear of alienating some customers with bilingual hangtags and store signs, or with targeted ads in mainstream media, and the fashion industry’s lack of knowledge of the Hispanics’ rising levels of education and income.

    Indeed, the Pew Hispanic Center’s 2002 National Survey of Latinos — a word used interchangeably with Hispanics — found approximately 11 percent of Hispanics, or 4.3 million, have graduated from college; 21 percent, or 8.1 million, have annual household incomes of $50,000 or more, and more than half of Hispanics — 21.2 million — occupy white-collar jobs. Observed Bill D’Arienzo, ceo of WDA Inc., a Princeton, N.J.-based fashion marketing consultant, “There are a lot of [inaccurate] perceptions hanging over from the past. In reality, there’s a tremendous upward mobility and drive for education; family cohesion and tendency to shop as a family, and an aspirational sensibility very similar to that of non-Hispanic white and African-American consumers.”“A lot of fashion brands use in-house agencies, which may not contain people who understand the Hispanic market,” said Otera-Smart of Mendoza Dillon, whose clients include Unilever, Pfizer and Kia Motors America. “Most fashion brands are not considering how they can effectively talk to Hispanic women, who love to dress up and wear makeup.”

    For example, the Bureau of Labor Statistics and Simmons Market Research found in 2000 that Hispanic women were 63 percent more likely to buy skirts than American women overall, and 17 percent more likely to buy leather outerwear.

    A small roster of retailers are attempting to bridge the gap with their marketing and merchandising, including Wal-Mart; Kmart; Target; Sears, Roebuck & Co.; Macy’s, and Nordstrom. Seeing the evolution in the customers who shop their stores daily has raised the awareness of such retailers, sources reasoned, prompting such forays as J.C. Penney’s Spanish signs in its Dallas-Fort Worth stores and micromerchandising of its San Antonio sites; Kmart’s Thalia brand of apparel and Spanish magalog La Vida; Wal-Mart’s micromerchandising of apparel and accessories in Los Angeles, and Sears’ designation of 237, or 29 percent, of its 870 stores as Hispanic sites, micromerchandised and marked with Spanish signs, and its upcoming August launch of the Lucy Pereda line, named after the hostess of Galavision’s “En Casa de Lucy,” aimed at Hispanics, with anticipated crossover appeal.

    Affirming its 10-year commitment to serving the needs of its Hispanic customers, as well as its African-American and Asian-American shoppers, Sears last year named Sandra Diaz director of multicultural marketing and Cynthia Rodgers Maignan as director of cultural merchandising.

    “When Hispanics account for more than 15 percent of the population within a 10-mile radius of a Sears store, we designate that store as a Hispanic site,” Diaz explained. Besides using bilingual signs, Sears hires bilingual associates for those stores and offers a larger selection of small sizes, suited to a healthy portion of Hispanic customers.

    In April, Sears launched, a Spanish-language shopping guide to and platform for virtual brochures detailing products that can be bought at Sears stores as well. There’s also a Sears Fiestamobile, which travels to local events like the 116th Street Festival in Spanish Harlem, exposing people to the Sears brand and enabling them to sample electronics from Hewlett Packard and Compaq, brands sold at Sears. And Sears has an 11-year-old lifestyle magazine called Nuestra Gente (Our People), with a circulation of 865,000, which carries Sears’ own ads as well as those from such companies as Kraft and Procter & Gamble.Joining in the fray is Old Navy, which, on June 26, began a search for an ad agency, a Gap spokeswoman said, “to support us for our TV commercials aimed at our Hispanic customers.” It’s the first media campaign Old Navy will use specifically to target Hispanic consumers, the spokeswoman added, but she declined to elaborate.

    That a chain as mass in scope and appeal as Old Navy is only first aiming to air commercials aimed primarily at Hispanic shoppers speaks volumes about the state of fashion’s efforts to capture this market. Observed Robert Rosenthal, president of Latin American business at Chiat Day TBWA, “Hispanic women are the ultimate frontier for fashion marketers. It’s only over the last five years that there’s been a broader recognition of Hispanics as a large, dynamic, affluent, aspirational audience.

    “The 2000 Census and newest [June] numbers kicked it up a notch,” Rosenthal continued. “The next five years will be a wake-up call. If companies don’t respond, it will be at their own peril.”

    The stakes are particularly high for Old Navy, as it’s one of the top five sportswear brands purchased by Hispanic customers, according to Cambridge, Mass.-based STS Market Research, along with Gap, Tommy Hilfiger, Levi’s and Lane Bryant.

    For the foreseeable future, geography will keep providing an edge in reaching Hispanics, 56 percent of whom, or nearly 22 million, live in 10 major metropolitan areas, according to Synovate’s U.S. Hispanic Study 2002: Los Angeles, New York and Miami, which account for a 33 percent share, which expands to 41 percent with the addition of the populations of Chicago and Houston, and to 56 percent when San Francisco-San Jose, Phoenix, Dallas, San Antonio, and McAllen-Brownsville, Tex., are in the mix. (The country’s Hispanic population surged 58 percent between 1990 and 2000, rising to 35 million people from 22.4 million.)

    “This concentration makes it easier to target the Hispanic market through advertising and local events, like the Fashion Event of the Americas, held each April in Miami,” noted Aida Levitan, co-chair and chief executive of Publicis Sanchez & Levitan. In addition to raising marketers’ awareness, designers including Sylvia Tcherassi and Esteban Cortazar have been discovered at the FEA, added Levitan, who also is president of the Association of Hispanic Advertising Agencies.Indeed, a local appeal is critical in reaching the country’s Hispanics, who come from numerous countries and cultures. “A national billboard in Spanish doesn’t get the job done,” emphasized Marshal Cohen, chief industry analyst at Port Washington-based market researcher NPD Fashionworld. “It’s about localized marketing more than national advertising. The Hispanic consumer is looking to be educated, not to be sold.”

    More recently, Hispanics have emigrated to small towns, though, a trend that will make it harder to reach a growing share of the group going forward. The fastest-growing Hispanic populations are in small towns in North Carolina, followed by those in Arkansas, Georgia, Tennessee and Alabama, said WDA’s D’Arienzo, citing research from the University of Georgia’s Terry College of Business. And Wal-Mart could wind up a big winner in that regard, because its stores are located predominantly in such small markets. “These more recently arrived Hispanics are not mall rats,” said Yankelovich’s Smith. “So Wal-Mart is probably going to be a Hispanic power just because it happens to be where much of the new immigration is occurring.”

    He pointed out that low-wage manufacturing and farming jobs others are unwilling to fill are attracting these newest arrivals.

    No matter where the Hispanic target is, spending on advertising in general and fashion ads in particular is falling far short of levels necessary for an effective appeal, the AHAA advised in reports entitled The Right Spend, issued this spring and in spring 2002. Overall, corporations are devoting only 3.2 percent of their national business and marketing dollars to Hispanics, on average, compared with AHAA’s average guideline of 8 percent — a figure that doubles to 16 percent for the country’s major metropolitan markets, and rises as high as 29 percent for Miami and 20 percent for Los Angeles and Houston.

    One reason for the heightened levels advised by AHAA is the Hispanic customer’s loyalty to brands and larger incidence of purchasing premium quality products than seeking low prices, characteristics cited by numerous consumer researchers and advertising executives. For example, STS Market Research has found Hispanics spend more on apparel per item and per capita, on average, than the overall market despite the slightly greater dollar share expended in mass and chain stores by that group than by the broader population.In fact, STS reported, higher spending by Hispanics on women’s sportswear alone, totaling an average of $329.71 annually, compared with $323.46 for women overall. Jeans present a particular opportunity, as they capture 17 percent of the Hispanic shoppers’ sportswear spending, against 14 percent for all consumers. And despite the greater share of wallet Hispanics spend in chain stores (14 percent versus 12 percent of all consumers) and mass merchants (18 percent versus 17 percent overall), 7 percent of Hispanics’ spending on sportswear is for designer labels, versus 5 percent for the total market.

    Although teens and young adults are growing up with a sense of multiculturalism as their norm — considering all groups part of the mainstream — it may take several years until their point of view catches up with much of corporate America, including the fashion industry, sources projected. As more of the 71 million Millennials, people ages 8-25, enter the workforce, it’s expected they will help spur such changes in mind-set, both by their greater purchasing power and influence over corporate decision-making.

    Millennials account for the largest share of Hispanic and nonwhite, non-Hispanic groups ever in a U.S. generation: a combined 38 percent, or 27 million Millennials.

    That compares with the 15 million Hispanic and nonwhite, non-Hispanic Gen-Xers, or 36 percent of the 42 million people immediately preceding the Millennials; 27 percent, or 22 million, of 83 million Baby Boomers; 21 percent of the Silent Generation, and 16 percent of the G.I. Generation, according to combined analyses of the Census Bureau and Columbus, Ohio-based consultant Retail Forward.

    In all likelihood, said observers, the lagging economy and sputtering fashion business, combined with Hispanics’ rapidly rising numbers and affluence, will also assist in eventually overwhelming what marketing consultant D’Arienzo, for one, called “a skittishness and a latent prejudice on the part of the better and upscale apparel companies.”

    “We’re a nation of immigrants and though many of us are a generation or two away from immigrant status, that shadow is always behind us,” D’Arienzo offered. “Many Americans don’t want to be seen that way again,” he maintained. “We’re a democratic society, but we still don’t view everyone the same way.”

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