Staples gains footing in Hispanic market

Business Success program helps chain attract growing number of Latino small-business owners

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After arriving in New York from Guatemala two decades ago, Lida Castillo cleaned Manhattan apartments before working her way up the economic ladder by landing a job as a skin-care therapist at Clinique. A flier for a Staples-sponsored business seminar program called Exito Empresarial (or Business Success) has helped her climb higher.

"I always dreamed about owning my own business," said Ms. Castillo, 40. In 2004 she started Shine, a commercial cleaning service in Manhattan. "I learned about insurance, taxes, how to find an accountant, how to promote myself and my business-how to go around and make prices. Now I have four people working for me."

Life has changed dramatically for Ms. Castillo. Instead of endless workdays, she's chatting on her cellphone on a Friday afternoon while getting her hair styled at a spa.

By 2007, one out of every 10 small businesses will be Hispanic-owned, according to a recent Internal Revenue Service report. And those Hispanic small-business owners differ significantly from the general market, according to marketers and advertising executives targeting this booming market.

"This is a fiercely loyal market," said Ken Brooks, who oversees Hispanic and grassroots marketing as regional marketing champion at Staples, which, at $16 billion in sales and 1,491 stores, is U.S.'s largest office-supply retailer. "Once you convince them you care, Hispanic business owners will shop at your store for life."

First tested in Los Angeles, Staples is rolling out Exito Empresarial in Chicago this year, in addition to expanding efforts in New York. "It's a way to go beyond simply being a passive sponsor at Chamber of Commerce events," Mr. Brooks said.

The classes, held first at community centers, have also expanded to one-day events in stores, drawing crowds as large as 150, with Hispanic speakers from the local business groups.

getting personal

"Staples is so geared to the business owner, the natural question was what can be done to reach the Hispanic owner and make them aware of the services beyond what's stocked in the stores," said Carlos Cordoba, director of account services at Acento, Los Angeles, an independent Hispanic ad agency. "The goal was to reach out not only in a mass way, but almost to get your hands on them."

For Ms. Castillo, drawing her in the store was easy. A $25 gift certificate for attending the seminar funded her first business purchase for contract invoices. And her purchases haven't stopped there.

"I'm very loyal and very grateful they sponsored this, so I'm giving back some of my loyalty to them," she said.

Office Depot is less aggressive in targeting Hispanic business owners, but has an active program to reach female business owners with online seminars through its Web site and Web Cafe. In early February, the nation's No. 2 office-supply retailer, with $14 billion in sales and 1,047 stores, donated $500,000 to the Hispanic Association of Colleges and Universities to provide scholarships and program support over the next five years.

A spokesman for No. 3 player OfficeMax, which posted $9 billion in sales in 2005, said the 950-store chain has no Hispanic-targeted programs in place "although we've been looking at some things."

Phil Jacobs, chief marketing officer at CompUSA, said the Dallas-based electronics chain has been running a few pilot programs that will go beyond the chain's bilingual ad campaigns, but wouldn't disclose details. CompUSA's agency for Hispanic project is Omnicom Group's Dieste, Harmel & Partners, Dallas.

"There's a great opportunity and we plan to tailor our offers to this demographic," he said. "It's an area we are going to be putting more effort against."

Despite hefty growth rates for Hispanic businesses, the slice of corporate America with services to sell to Hispanic entrepreneurs, such as insurers, health-care companies and financial-services firms, has yet to take advantage of the growing market, said some experts.

"It's still kind of token conferences, setting up booths, PR stuff and it doesn't really address the issues," said Hector Orci, chairman and co-founder of La Agencia de Orci, Los Angeles, an independent Hispanic agency. "It took many years to get most of corporate America to see that the consumer segment could offer incremental business growth. It's time for the business sector to get the same level of recognition. Hispanics don't consider price to be the only thing in the sales equation and loyalty is very high when effective service is there."

more organization

Hispanic-owned businesses topped 1.6 million in 2002, according to the U.S. Census Bureau, up 31% from 1997, with revenue of $226.5 billion. The market is not just growing, but getting better organized. In 2003, there were 132 Hispanic Chamber of Commerce chapters nationwide. Today there are 215 with an estimated growth rate of five new chambers a month, according to the United States Hispanic Chamber of Commerce.

Even so, marketers have to work harder to win over the Hispanic entrepreneur, according to Michael Barrera, president and CEO of USHCC.

"You've got to spend time and invest in the Hispanic market," he said. "Culturally, doing business is different. It's not like doing business here. In American business, you'll have 15 appointments in four hours, where in Mexico, you might have one or two."

The Staples strategy has paid off, at least for the ambitious Ms. Castillo, who doesn't intend to stop at cleaning offices. She plans to build up a network of clients, sell her business and plow the earnings into opening a health and beauty retail store in Manhattan within two years. And she'll be heading to Staples for even more office supplies.
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