T-Mobile is launching an ambitious new effort to seize a bigger slice of the growing U.S. Hispanic market for mobile phone services.
The telecommunications giant plans to introduce from 100-150 new retail outlets in 2009. The retail stores will target Hispanic consumers.
Furthermore, T-Mobile will be seeking out Hispanic entrepreneurs to own and manage the 100-plus stores, said Lesley Hawks, T-Mobile's manager of partner acquisition. Experienced Hispanic retailers will participate in T-Mobile's authorized retail dealer program and, in particular, in the initiative called "ERP 2.0 Latino."
The battalion of stores will be located in urban districts with heavy concentrations of Hispanics. The expansion program kicked off with three stores in Southern California. Located in El Monte, Palmdale and Lynwood, the stores operate under the ownership and management of David Massry, a savvy business executive who is also the CEO of Ritmo Latino, a chain of 50+ music retail outlets.
T-Mobile's massive expansion joins efforts by other cellular phone companies eager to grab a share of the increasingly lucrative Hispanic market. Not only is the Hispanic population the largest-growing segment of the United States, but the purchasing power of the Hispanic community has been increasing at rate of almost 7 percent annually since 1996. It is expected to reach $1 trillion in 2010, according to data from HispanTelligence, the research branch of Hispanic Business Media.
According to Manny Gomez, market director for T-Mobile in the Los Angeles, Orange and Inland Empire, California, while mobile phone penetration of the general population is around 85 percent-90 percent, sales to Hispanic consumer are about 65 percent-70 percent. Consequently, competition for the Hispanic consumer is heating up.
T-Mobile's rivals too are intensifying their efforts to capture the Hispanic customer. Cingular, for example, announced last year that it was shifting 400, or one-fifth, of its retail outlets nationwide into Hispanic-focused sales operations.
Mr. Gomez said that previously T-Mobile was underperforming in the Hispanic market. "We recognized early this year there was a poor representation of our brand in the Hispanic community," he said. "Authorized retailers were not performing adequately, and while T-Mobile's corporate stores offered adequate service, they failed to "make a deliberate effort to address the Hispanic market. It was all cookie cutter."
That recognition resulted in a two-pronged plan to capture the Hispanic consumer, said Ms. Hawks. First would be the opening of new authorized retail stores with greater professionalism and run by retailers who understand the Hispanic market. Second, the retail units would adopt a Hispanic focus.
Expereinced Hispanic Retailers
"We set out to partner with quality dealers who were already retailers," Mr. Gomez said. Those retailers did not need to be experienced in the wireless market, but it was important that they "possessed experience selling to the Hispanic consumer," he said.
Mr. Massry, who is spearheading the T-Mobile effort in Southern California, is an ideal example of T-Mobile's desired candidate. In fact, in addition to those outlets already owned by Mr. Massry, he is planning to open the doors on an additional 15 stores in the greater Los Angeles area in 2009. "He met our criteria of providing quality retail and marketing to a consumer successfully in a way that got the consumer to respond," Mr. Gomez said.
"We leveraged his experience in the community, and we gave him our experience in the wireless community. It just worked out." In Mr. Gomez's assessment, "He took to it like a fish to water. The stores are extremely successful."
Hispanic Friendly Stores
Mr. Massry was selected as pioneer of the ERP 2.0 Latino initiative in part because of his extensive knowledge of the Hispanic customer. T-Mobile says it has learned much from him. "He understands how to treat and greet the customer, and how important that is." Spanish-language use is important too, Mr. Gomez said, but for later generations, being bilingual is a must.
"He understands traffic patterns and buying patterns of the Hispanic consumer. He knows key holidays and which are important for the Hispanic community." In addition, Mr. Massry has mastered the art of "creating a welcoming environment" with the use of color, music and other décor items. In sum, "he did things that cater more to the Hispanic consumer, who often shops with the family."
The T-Mobile authorized retail program is "one of the most favorable models out there that provide the owner with low startup costs, compared with starting a franchise business," Mr. Gomez said.
T-Mobile is making a strong push to attract many more entrepreneurs. The company recommends those interested call 877-526-7922 or visit www.t-mobilelimited.com/eoy
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