The quick-service industry is all about attracting the right population group at the right time, as the top brands have successfully marketed to the masses in hunt of a quick, decent bite at a reasonable price. However, there are lucrative population groups that have been primarily afterthoughts of core marketing and distribution strategies. These groups will separate the new winners from the losers in an increasingly competitive market.
Specifically, data has shown that many of America’s “new mainstream” consumers rely on quick serves to feed themselves and their families. More than 36 percent of America’s population is multicultural, and projected to grow to 40 percent by 2021. For the limited-service, Hispanics alone account for 20 percent of quick-service sales and are predicted to aggregately spend over $125 billion on food and beverages alone in 2016. Hispanics are also more family-oriented when eating out. Half of Hispanic restaurant visits from Spanish-dominant Hispanics include parties with children, and one-third of visits from English-speaking Hispanics include children. This is compared to only 29 percent of non-Hispanic families who bring their children to restaurants.
The challenge is that multicultural consumers are as complex as they are lucrative. These modern consumers vary greatly by acculturation level, country of origin, and buying preferences. Many brands are hesitant to take the next step to deeply understand their customers; this requires taking the time and money to collect granular consumer data and then use that data to develop a variety of marketing campaigns. But this extra effort is worth it.
In many cases, a failure to capitalize on the multicultural population is a misunderstanding of who these consumers are and how to reach them effectively. Translating a TV or radio ad into a particular language isn’t always enough; marketers must understand how to target messages sensitively and personally. They also need to understand that multicultural consumers are sophisticated shoppers that peruse all forms of media.
So what are three common multicultural misunderstandings, and how can you avoid them?
Choosing a location with incorrect or inadequate data. Many times, marketers are in the dark in terms of the information that’s at their fingertips. Brands need to consider granular demographic characteristics, in order to set themselves up for success.
Household size: Hispanic households tend to be larger in size, thus their spending in all categories is extremely high.
Daytime population: The group around your location Monday to Friday 9 a.m. to 5 p.m. is likely not the same as the people who reside there. Restaurants should reconsider how they advertise in a certain area to attract the right group of buyers at the right time.
Acculturation level: One adopts elements of a new culture and combines them with their old culture at different levels. The level of acculturation may indicate the food consumers want to eat, the level of English they speak, and thus, their understanding of a menu, restaurant employees, and willingness to try a new type of cuisine.
Sending an inaccurate message. It’s common for brands to add a multicultural component to a general market campaign, which appears inclusive with the hope that the message will be understood, but there is a more efficient way to market to consumers. It starts by understanding who exactly your multicultural buyers are. Are they Hispanic, Asian, black, or something else? Going deeper, which specific ethnicity are they? A Dominican customer may not be as intrigued by a marketer’s messages as a Puerto Rican customer, depending on the product, how it is advertised, and where it is advertised.
Assuming that multiculturals only respond to traditional media. Multicultural consumers are over-indexing on mobile, with 64 percent of shoppers using mobile devices as part of the “pre-tail” shopping process. For this reason, restaurants must focus their marketing efforts on engaging with multiculturals on these digital platforms. Twenty years ago, many of these platforms didn’t exist and marketing to consumers was simple; today, things are vastly different, and multiculturals are leading the march toward digital.
Forgetting about the value of customer loyalty. When you consider that Hispanics are much younger on average than non-Hispanics and have larger families, an investment today will pay off over a longer period of time. As more quick serves implement loyalty programs—and actually mine the data for actionable insights—garnering long-term customers from often-fickle diners can become a reality. Platforms like CultureCoding enable linkage of language, country, acculturation, spending indices, and many other data points that will shed light on what’s happening over the whole footprint and individual store level.
Multiculturals aren’t a fad—they’re the new mainstream. They are here to stay, and any brand that is not targeting this group is wasting time and money. The resources put into reaching multicultural consumers will undoubtedly pay off in the form of profit and the trust of these new consumers. A message to quick-service marketers: Get in on the multicultural opportunity before your competitors beat you to the punch.