As the US economy prolongs the frustration, nearly everyone from marketing pundits to average Joes talks about the Latino market as a single cohesive unit capable of stimulating growth. And if the recent surge in activity aimed at winning over Latino consumers is any indication, then perhaps they are on to something.
A wonderful thing about capitalism is that there is always someone who can snub a nose, albeit gently, at economic doom and gloom. Social and professional networks like Facebook and Linkedin continue to invest and perform well, in spite of the weak economy. We will have to wait and see how far they can go when the market turns. Similarly, coupon sites like Groupon and Living Social seem to thrive, or at least they give the appearance of being able to fight off the dismal economy.
While most try to figure out where the market is headed, there is a growing trend of commerce sites targeted specifically at the Hispanic consumer. Groupon and Social Living copycats like Groupacho and Descuento Libre offer similar coupon-like discounts. This has become a popular way to create impulse buys. Univision, the Spanish TV network giant even launched their own version of discounts, cleverly named, Ufertas. And while the economic slowdown and the sluggish results thru traditional channels presumes that no one is really spending, the popularity of these models suggests that 1) people will pay attention to “flash” offers and spend – if the offer is good enough, and 2) US Latinos are underserved by the likes of Groupon and Social Living necessitating additional competition.
In previous posts, I’ve discussed the efforts to find out what works best when trying to appeal to the Latino consumer. I have also advised against simply resorting to the 80/20 rule given the subtle differences between Mexican-Americans, Puerto Ricans, Cuban-Americans, etc. Yet, because of the strong appeal of capturing the relatively untapped buying power and the gnarled current economic climate, flying under the radar with the opportunity to work out the kinks in their Latino model might just bode well for those willing to take the risk.
And what a risk it is. While all three major races lost net worth from 2005 – 2009, Hispanics were the hardest hit. While White Americans lost 16% during that period, African-Americans lost more than half of their net worth (53%) and Latinos lost a whopping 66% of their net worth to create the widest gap between races in 25 years.
¿Y ahora qué? It may not be the time to be courting Latinos. In fact, but for a few brave entrepreneurs, the risks may be too great to stomach. But for those willing and able to brave the storm, there may well be a warm welcome once the skies turn blue again.
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