"In a collective decision [by a Hispanic family], they become an impediment," said Gary Bassell, president of La Comunidad, Best Buy's Hispanic agency.
Best Buy is the first major Hispanic advertiser in the consumer-electronics category, but won't be the last. Rival Circuit City named its first Hispanic agency, Publicis Groupe's Bromley Communications, San Antonio, in January but won't have creative work ready to break before fall.
Both marketers are researching the hitherto neglected Hispanic buyer of consumer electronics carefully.
"The huge trend forward growth in this category will come from Latinos, who are at a different stage of development," said Ruby Anik, Best Buy's VP-advertising. "There is also dramatic growth in new [Hispanic] home formation, and pent-up demand for technology because no one's been talking to them about this category."
Before hiring La Comunidad-a 3-year-old independent that has become known for both its creative work and in-depth Hispanic research for clients like Citibank-Best Buy had simply translated a couple old commercials as a stopgap until the retailer could find the right agency, do intensive research and develop a targeted program, Ms. Anik said.
Best Buy, which works with its own 300-person in-house agency for the general market, will spend in the "high single digits as a percentage of our total TV advertising" with further growth in Hispanic dollars as the program develops, she said. Publicis's multicultural media agency Tapestry, Chicago, buys Hispanic media.
La Comunidad's research included home ethnography, long visits to Hispanic families from Los Angeles to New York's Spanish Harlem to see how they live. The agency spotted domestic dissonance between geeky young family members that La Comunidad called the "chief information officers" and the older, less-acculturated Hispanics who may be intimidated by technology but must sign off on purchases as "chief financial officer." That generation gap isn't unique to Hispanics, but Hispanic families are more likely to discuss and make collective decisions, and go shopping together.
Best Buy broke the first of three spots in late July, focused on both branding and hot trends such as digital imaging and plasma TVs, with a pre-Christmas spot to encourage purchase of MP3 players breaking in October. In each spot, the father flees when other family members try to persuade him to buy high tech products. And he doesn't just run out of the room. In one spot, he goes upstairs and jumps out the window when his daughter talks about a plasma TV and other family members nod agreement.
The tagline translates roughly as "If you're far away, get closer with Best Buy."
Jose Molla, La Comunidad's founder and creative director, said, "The campaign will trigger dialogue, especially if parents and kids watch TV together, as Hispanics often do, and the kids say, `Dad, that's you!"'
Best Buy dominates the consumer-electronics segment, with a U.S. market share of 16.9%, with Wal-Mart Stores close behind at 12.7% and Circuit City a distant third with 7.9%, according to estimates by Credit Suisse First Boston. Wal-Mart is already an aggressive marketer to Hispanics, working with independent Lopez Negrete Communications, Houston.
Best Buy has also grown faster than its competitors. According to Credit Suisse's analysis, Best Buy posted 15.2% sales growth in 2003, compared to Wal-Mart's 10.9%. Circuit City's sales dropped 2.1%. Consumer-electronics retailers have benefited from the popularity of digital products, such as the explosion in DVD sales and digital cameras, and from lower prices for flat-screen TVs, which are driving increased adoption of those products. However, anticipating a slowing of the cycle as the market matures and becomes saturated, retailers are turning to Hispanics to fuel new growth.
contributing: mercedes m. cardona