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Do You Know Who Your Latino Customer Is?

At last month’s Global Retailing Conference held by the University of Arizona’s Terry J. Lundgren Center for Retailing, Macy’s chief marketing officer Martine Reardon introduced Thalia Sodi as the future of brands in America.

Although many of the executives in the audience were not familiar with the Latin megastar, Reardon told of Macy’s exhaustive market research to determine how best to engage the consumer group that is becoming such a critical segment in the U.S.: “For the Latino customer, all roads led to Thalia.”

The recording artist, who also wears the hat of actress, author, wife (she is married to music mogul Tommy Mottola) and mother, shared her insight and enthusiasm with the packed ballroom at the Westin La Paloma where the conference was held. “By the year 2020, one in five Americans will be Latino, so I want you to understand this woman. She works a lot. She has one, two, sometimes three jobs. She goes home, takes care of the kids, is a wife, a daughter, a sister, goes out with friends and has some margaritas. She doesn’t have time to lose.”

According to the U.S. Census Bureau, there are roughly 54 million Hispanics living in the U.S., representing about 17 percent of the total population, making it the largest ethnic or racial minority. It is also one of the fastest growing. By 2050, it is estimated, Latinos will constitute over 30 percent of the U.S. population.

By subgroup, Mexicans ranked the largest, at 64 percent of the total, followed by Puerto Ricans (9 percent), Salvadorans, Cubans, Guatemalans, and others, each of which comprised less than 5 percent.

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The Latino customer spends money–lots of it. Nielsen estimates that the total purchasing power of Hispanics in the U.S. will total $1.5 trillion this year and is growing much faster than spending by non-Hispanics.

The launch of the Thalia Sodi collection was two years in the making and the Macy’s CMO said when the singer shared with them her passion for fashion and her desire to serve this Latina customer who is so grossly under-served, they knew they had found their next big star-quality brand.

“She had such great insights for us on what we needed to do. And actually did some myth-busting.” Reardon said. “Our brand team went to Mexico City three different times to work with consumers, who told us the most important thing is to get the fit right. Then, what we had to do was make her feel beautiful. So she feels like she could get up, go out and get a cup of coffee and look dressed to the nines. Not only did we launch this in apparel, but in jewelry and shoes, so we could make a whole lifestyle look for this Latina woman.”

Unlike most of its new brands, which are tested in, at most, 100 doors, Macy’s had so much confidence that the Thalia brand would succeed, they put it in 300.

The most innovative aspect of the launch, according to Reardon, was the runway show hosted by Thalia during New York Fashion Week. The press was invited and the show was broadcast on Facebook to Thalia’s fans. “We got 2 million views,” he said.

Sodi pointed out the fact that Latina women want to feel beautiful, feminine and sexy without looking trashy. They tend to be a little shorter, and curvier, so garments need to flatter. “You want to go to the store, and buy something that you wear for work, or for an interview, you want to be able to transform it and wear it to go out.” According to Reardon, sales of the clothing, as well as the accessories, shoes and jewelry that complement it, is exceeding expectations.

Other apparel retailers have been tapping into this important consumer segment too. Kohl’s launched the Daisy Fuentes brand 11 years back, to be followed by the Jennifer Lopez and Marc Anthony labels. PVH’s Cubavera brand targets fashion-conscious Latino men. TV star Sofia Vergara recently ended her contract with Kmart, likely because she has something bigger in the works. J.C. Penney put a lot of marketing muscle behind its World Cup collaboration, and has Latinos squarely in its customer focus.

According to the Bureau of Labor Statistics, Hispanic consumers spend on average 14 percent more per year on clothing and footwear than the average consumers.

According to Sodi, this first collection at Macy’s is just the beginning, merely the foundation of what is to come. When asked what’s next, the glamorous, energetic star replied, “Everything, no?”