How Hispanics Use Loyalty Programs

By Christine Kern, contributing writer

By 2050, estimates show that Hispanics will comprise one-third of the American population and hold over $1 trillion in annual purchasing power.  That means that retailers need to start paying attention to the Hispanic market.

A new Punchtab white paper, “From Awareness to Purchase: The Loyalty Journey and the Hispanic Market,” explores the relationship between Hispanic consumers and loyalty programs, with some interesting conclusions.

Census data shows that the Hispanic market has grown by 43 percent in the last ten years, now representing one in six Americans.  By 2050, this market is expected to expand from 46.7 million to 132.8 million, responsible for over $1 trillion in annual spending.

Research has demonstrated that the Hispanic Market is more interested in loyalty programs than the average American consumer.  While only 27 percent of the general population credit loyalty programs as they reason they select a particular brand or company, among Hispanics that number jumps to 38 percent.  The Hispanic market also was the segment with the highest scores regarding how relevant loyalty programs were in their daily lives.

By digging into the data, and examining how the Hispanic Market interacts with existing loyalty programs, the White Paper presents the best strategies for optimal brand engagement.

The Hispanic Market is also desirable for retailers because they rely on mobile devices to seek content, spends an average of 4.5 hours a day in social media channels, and is the largest growing segment of the U.S. population. 

The study found that:

• Social media conversations begin once a potential loyalty card holder has expressed interest in the card.
• Target’s REDcard, with its air of exclusivity, was the most discussed loyalty program by the Hispanic Market during the pre-purchase phase.
• Hispanic loyalty card owners commonly engaged with the associated brand on social media.
• While purchasing with their loyalty cards, consumers were proud to share the rewards and benefits they got.
• Hispanic members are much more engaged on social media after they have acquired their loyalty cards.
• Balance Rewards from Walgreens and SHOP YOUR WAY from Kmart and Sears generated the most loyalty card conversations.

When studying the habits of the Hispanic market, the study also found that Hispanic shoppers are embracing private-label brands, influenced by in-store marketing and use it to make purchasing decisions, and prefer convenience over cost, searching for one retailer that caters to all of their needs. 

According to The Center for Hispanic Leadership, “The Hispanic Market prefers messaging that doesn’t view them as a consumer segment, but rather as people with a rich culture.  Hispanics represent a new type of consumer who is connected to their own cultural nuances that support the needs of their family, their heritage, and customs.  These consumers are looking to build loyalty with brands that properly represent their voices and authentic identity; and that empower their heritage by effectively embedding their cultural characteristics in how a brand speaks to them.”