Tapping into the Hispanic OTC market

Segmenting the go-to-market strategy to fully incorporate the Hispanic consumer in any OTC product launch is a great way to accelerate sales growth, noted Carlos Gutierrez, VP strategy and insights healthcare at Univision Communications. Univision Communications Inc., in partnership with Nielsen, in October took a deep dive into how Hispanics buy and shop the self-care aisles. They are an important demographic for OTC purveyors — they have larger households than average (3.5 people per household versus 2.5 in non-Hispanic white households); they’re more brand loyal; and they’re not only younger than the average American (28 years old versus 43 for the average non-Hispanic white), but also have a longer life expectancy (82 versus 79 for non-Hispanic white).

(To view the full OTC Trend Report, click here.)

With 58 million people, the U.S. Hispanic population represents 18% of the total population.

“Hispanics represent a huge opportunity for OTC brands looking for growth,” Gutierrez said. “U.S. Hispanics currently spend about $6 billion on OTC products, [representing] 12% of the total OTC market. But remember, Hispanics are 18% of the U.S. population. Considering the growth potential of this valuable consumer, it is essential for marketers to understand Hispanic emotions, attitudes, behaviors and experiences when shopping for OTC products.”

Hispanic households hold their family’s health in high regard, said Felisha Lewis, VP healthcare custom insights at Nielsen. “Although health care is a top priority, nearly half of all Hispanics do not feel they are in good health, compared with only a quarter of non-Hispanics,” she said.

That may be why Hispanics are more likely to participate in retail health fair events, for example. “This reflects cultural differences between [Hispanics] and non-Hispanics,” Gutierrez said. “We tend to be more social, more extroverted [and] we tend to share more [with one another].” So anytime there’s a local healthcare event, the Hispanic community alerts those who may be in need.

“It’s about collectivism in the community, and we see that in terms of their shared decision-making and multi-generational household units,” Lewis added. “These are community events [where] they can get involved socially. It’s a great place to access this audience.”

Within the store, Hispanic consumers appreciate inclusivity, Lewis said. “Once in-store, Hispanics are looking for cultural cues, such as bilingual signage and having a Spanish-speaking staff. Almost two-thirds of Hispanics appreciate it when stores have a Spanish-speaking pharmacist,” Lewis added, noting that the Hispanic community holds the pharmacist in high regard as a healthcare aficionado. “This is particularly true when [a Hispanic consumer] is purchasing a new category [or] trying a new brand. … Hispanics really want to get the opinion of the pharmacist in the store.”

Both Target and Walmart have been successful in their in-store marketing position against the Hispanic community, Gutierrez said. “Target includes bilingual signage in their stores,” he said. “[And] Walmart is a second example; they actively engage with the Hispanic consumer.”

Nielsen found that Hispanic shoppers are extremely brand loyal, preferring brand over private label more frequently as compared with non-Hispanic shoppers, and are willing to shop another store in an effort to get their favored brand as opposed to selecting an alternative product in the first store. “Hispanic brand loyalty also offers brands the opportunity to grow through line extension,” Lewis said. “Hispanics are more likely to try new products from their preferred brand compared [with] non-Hispanics.”

And finally, while price is a consideration for the Hispanic consumer in shopping for OTC products, it’s not the key driver, Lewis said. “We found Hispanics to be less price sensitive overall, compared [with] non-Hispanics,” she said.