In the past year, it has become evident that a significant number of people around the world are dissatisfied with globalization and immigration. Concerns include the loss of jobs and national cultural traditions as well as the use of public resources to aid refugees and undocumented immigrants. Terrorist attacks have also created questions about the loyalty of a country’s citizens of immigrant descent. Adding to those legitimate fears, there is latent racism that has now found an acceptable form of expression.
At the same time, we live in a world in which data and technology are driving demand for personalized offerings. Brands cater to that customer expectation through mass customization which requires identifying large and attractive market segments that share common needs.
In the U.S., in-culture personalization focused on Hispanics, African-Americans, and Asian-Americans provides such an opportunity. These segments collectively represent 38% of the population and $3.4 trillion in buying power and account for 92% of 2000-2014 U.S. population growth.
Furthermore, there is proof of the financial return of multicultural or in-culture personalization initiatives. An Association of Hispanic Advertising Agencies (AHAA) analysis of published financial revenue data and Nielsen ad spending for thirty-nine CPG and retail firms found that the share of overall marketing resources dedicated to the Hispanic segment explained about one-third of their overall revenue growth. Another study by McKinsey found that, for every 10% increase in racial and ethnic diversity on the senior executive team in the U.S., earnings before interest and taxes (EBIT) rise 0.8%.
Despite the proven benefit of creating and communicating relevant offerings for specific ethnic segments, some people believe that it goes against preserving a unified national identity. This leaves your organization with two choices in view of rising nationalism: take a stand on catering to culturally-diverse groups, which requires preparing for backlash, or ignore the multicultural market, which requires finding other equally promising sources of growth.
The secret to navigating the tension between in-culture personalization and the new nationalism is to shift from a focus on in-language messaging, niche offerings, and culture-driven entertainment to tapping the nuances in how culturally-diverse consumers engage with your brand’s mainstream items, communications, and touch points.
Six Ways to Manage the In-Culture Personalization and New Nationalism Shift
Here are six practical ways for you to make the shift:
- Address unique needs not driven by language. Look for areas in which ethnic customers are not taking full advantage of your offering because of:
- A lack of experience with your category or brand due to historical exclusion or growing up in an immigrant family.
- Genetic driven differences such as darker hair and skin tones or petite body types.
- Mainstream product or service preferences linked to culture, such as Hispanics and Asian-Americans eating more rice because of their food heritage.
- Identify mainstream items with high ethnic appeal. While there is a role for targeted items, culturally-diverse consumers primarily buy well-known brands. But, they might choose different mainstream brands or specific items inside a line vs. non-ethnic shoppers due to:
- Needs outlined above―for example, Hispanics and African-Americans buy more red, brown or plum lipstick to flatter their dark complexion while Caucasians buy more pink.
- Higher awareness and emotional connection to certain brands that have invested in engaging them―for example, everyone wants to eat a healthy breakfast but Hispanics consume Quaker Oats and LA Yogurt while Caucasians favor Greek or Stonyfield yogurt.
- Optimize channel presentation for multiple segments. Have you ever walked away from buying an outfit because they did not have your pant or shoe size? That situation is more common for ethnic shoppers and it goes beyond the apparel category. It happens because companies only identify overall top sellers rather than ranking items separately for different segments. If you create planograms, displays, signage, and website features that showcase the common best sellers for multiple groups, everyone will find what they want. This is way more powerful to drive sales and shopper satisfaction than bilingual packaging or messages.
- Design store adjacencies to avoid segregation. Where targeted items can add value (for example, when selling both ethnic and regular produce), merchandise by category rather than in a separate ethnic section. Exceptions to that rule are the Asian and Mexican aisles, since most of us have already been trained to shop those categories in a separate location.
- Deliver culturally competent selling and customer support. Remember heritage impacts people’s beliefs about authority, family responsibilities, and good manners. And those ideas are the last to go with the generations. For example, if you are a financial adviser working with an Hispanic client, verify whether their budget includes caring for a family member―even if she or he is 2nd or 3rd generation and college educated. Determine if customer support metrics (such as call length) vary for ethnic vs. non-ethnic customers and adjust your service protocol and performance expectations accordingly.
- Cultivate a diversity mindset among all employees. Most American personal networks only include people of their same race or ethnicity. Thus, your staff may lack the personal experiences of diversity required to organically serve the breadth of your customer base. Having a human resources diversity office, multicultural marketing function, and employee resource groups (ERGs) provides leadership for addressing the needs of under-represented groups of employees and customers. However, those teams must prioritize developing all employees’ cultural fluency, helping everyone see how their background and experiences apply to the unique needs of multicultural segments. Otherwise, you risk creating diversity expertise silos that can’t impact your company’s value proposition across the board.
Notice each of these ideas caters to unique multicultural needs rather than focusing on what everyone has in common. However, they are executed inclusively―as the ethnic nuances are addressed in the mainstream offering and process rather than in separate targeted initiatives. Therefore, there is no need for brands concerned about the new nationalism to avoid in-culture personalization and its proven rewards.
Can you apply any of these ideas in the next 24 hours? How has the new nationalism affected your in-culture personalization plans? How are you navigating the tension? Comment below.