The Hispanic population in the United States is exploding. There were an estimated 53 million Latinos in the United States in 2012, and the Census Bureau expects that number to more than double by 2050. The group’s purchasing power was $1.2 trillion in 2012, according to the Selig Center for Economic Growth.
Latinos also happen to be 28 percent more likely to own a smartphone than non-Hispanic whites, according to Nielsen.
So it’s not especially surprising that this year, cell-phone retailer The Cellular Connection (the doing-business-as name of Moorehead Communications) teamed up with Jennifer Lopez, Verizon Wireless and wireless distributor Brightstar to launch Viva Móvil, a separate company that is specifically targeting the Latino market. But how exactly will that be done, considering that Latinos have strikingly variable demographics, needs and incomes, depending on factors like country of origin, region of the country and even neighborhood? CFO sat down with Chad Jensen, finance chief of both TCC and Viva Móvil, to find out.
As the CFO of two companies, how do you divide your time?
I leverage my teams to complete a lot of the work. Our corporate offices are housed in the same location. So on the Moorehead side I have a full finance and accounting team of about 50 people. On the Viva team I have one dedicated finance person that works directly with me, and we effectively outsource the tactical functions to the rest of the Moorehead team.
What are the shopping preferences of Hispanic consumers when it comes to mobile phones?
To start off, when we looked at that demographic it was really underserved, specifically by our Verizon market. One of the key things we focused on was the shopping experience. There’s more of a family atmosphere when they’re shopping, more of a sharing feeling in that process.
How does that play out when it comes to cellphones?
One of the key things is having a family “share everything” plan. Another is focusing on making Viva Stores a family zone, specifically having an area set up with tablets so the kids can be occupied and use some technology while the parents spend time with our sales agents so they better understand what the customers’ personal needs are — what type of phone, what type of plan, what type of apps would really fit their lifestyle.
Family is important to other groups as well. How did know your Hispanic consumers would be especially interested in this kind of family focus?
There isn’t a broad-brush answer that serves any demographic. Our real focus is on getting embedded into communities and understanding the customers there. We have hired people within communities to service those stores and to build that connection with customers and understand what’s important to them.
Purchasing power is growing in the Latino community, particularly among Latinas. Is that the case with cellphones?
Yes. Clearly there’s an opportunity. It is a growing demographic that we felt was underserved for the product we offer, and we felt our market share was low.
We learned through focus groups and other market research that there’s a perception that our product may be more expensive than other options a specific demographic may be currently purchasing. So we want to really educate all consumers on the value you get from our products.
The demographic and cultural norms of Dominicans, Puerto Ricans, Mexicans and so on may be very different from one another. How do you build a company that caters to all of them?
Right. It’s not like there’s just one typical Hispanic customer and a boilerplate template for that. We’ve done market research to understand some of the differences and we’re trying to close that gap. People in one neighborhood may be different from those in a neighborhood that’s a mile or two away.
We’ve focused on smaller stores staffed with people from that community who can build bonds. We’ve overstaffed these stores. You don’t come in and you grab a ticket and wait in line while no one talks to you. We make the financial investment so that we can immediately greet you and get to know them and eliminate the time that you’re waiting for your ticket to be called.
How fast are Viva and Moorehead growing?
On the Moorehead side we’ve gone from $191 million in revenue to north of $600 million in the past couple of years. As for Viva, we launched our first stores this year and will have approximately 20 by year-end. We’re looking at a rapid growth plan from there.
Where are the Viva stores besides your flagship Brooklyn location?
We’re currently open in the New York, Miami and Los Angeles markets, and are looking at Chicago and Phoenix.