Internet Retailer Reports Language Remains a Barrier

June 10, 2008

Internet Retailer’s article is reprinted below.

¿Se Habla Español?

Language remains a barrier to reaching online Hispanic shoppers
By Don Davis

Hispanics represent the fastest-growing group in the U.S. population and among Internet users, and about half of online Hispanics prefer Spanish-language web sites. Yet most major online retailers neither provide web content in Spanish nor respond to customer inquiries in that language.

Some retailers say they don’t see customers clamoring for Spanish web content. And many are daunted by the considerable cost of translating an e-commerce site, continually translating new content as inventory changes, and providing the Spanish-language customer service that Hispanic shoppers would expect.

But at least two of the 50 largest e-retailers, consumer electronics chain Best Buy Co. and online florist 1-800-Flowers.com Inc., have in the last nine months launched Spanish-language sites duplicating nearly all the content of their English-language sites. Their initiatives, and a more modest effort by smaller online retailer PlumberSurplus.com, provide a glimpse of what it takes to serve customers in Spanish and how they respond.

High marks

While Best Buy isn’t providing sales figures, it says many Spanish-speaking customers have commented favorably on the Spanish content. And the Spanish site gets higher marks on such survey questions as “Would you refer to a friend?” and “Would you return?” than the English site, says Ana Grace, the retailer’s Spanish site manager.

The way customers use the site suggests they are hungry for Spanish content, although Grace says it’s too early to draw firm conclusions. “Customers are spending roughly double the amount of time on the Spanish site as English-language customers,” Grace says. “We’re wondering, is that because they haven’t had this level of detail before and are really digging in? We’re not sure.”

Spanish speakers may well feel deprived of opportunities to shop online in their own language because most e-commerce sites are English-only. Only 18 of the 102 largest online retail sites had any Spanish content in late 2006, according to research firm Common Sense Advisory Inc. Seventeen of the 102 sites responded in Spanish to all three Spanish e-mail inquiries researchers sent in August 2006, an improvement from two in a similar test two years earlier.

Despite the lack of Spanish content, Hispanics are buying online. They spent $12.8 billion on the web last year and will spend $21.6 billion by 2011, estimates research and consulting firm JupiterResearch LLC.

But online retailers may be able to reach most of those consumers in English. Only 32% of Spanish-dominant Hispanic adults use the Internet, versus 76% of those who are bilingual and 78% of Latinos who mainly speak English, according to a 2006 survey by the Pew Internet and American Life Project.

What’s more, only 23% of online Hispanics who prefer Spanish have ever purchased online, versus 41% of English-preferring Hispanics, according to a 2007 Forrester Research Inc. report. And Spanish-dominant consumers have less to spend, as their average household income was only $26,800 last year, compared with $45,000 for bilingual Hispanics, $56,200 for English-dominant Hispanics and $60,200 for non-Hispanics, Forrester says.

Most retailers don’t need Spanish-language sites to reach their customers, argues Fernando Espuelas, chairman of Voy LLC, operator of bilingual Latin music web site Voy Plaza. He views the Hispanic market as bifurcated between mostly Spanish-speaking, older and less affluent immigrants and younger, native-born Latinos who mostly speak English.

“If a product is aimed at an early arrival Hispanic, Spanish is a must,” says Espuelas, who was born in Uruguay and came to the U.S. in 1976 when he was nine. “But if someone has a credit card, the chances are low that he can’t transact in English.” The Voy site is bilingual in order to address Latin American consumers, but also, Espuelas says, to signal to U.S. Hispanics “that this is a Latin space.”

Not all agree. A Forrester survey last year showed that, while only 23% of Hispanic consumers require Spanish, a total of 51% prefer using Spanish web sites. And 28% said they were more likely to trust a company with a web site in Spanish. “A Spanish-language site is not just about reach but is also about brand trust and customer goodwill,” says Forrester analyst Tamara Barber.

For retailers considering launching a Spanish site, cost is a major stumbling block, Barber says. “Not only do you need to translate it once, but you continually have new inventory coming, so you need to be able to translate quickly and inexpensively,” she says.

Completely translating a major web site can cost “a couple of million dollars” and retailers can expect annual maintenance to run about 30% of the original cost, says Chuck Whiteman, senior vice president of client services at language service provider MotionPoint Corp., which provided the translation and serves up the Spanish-language sites for Best Buy and 1-800-Flowers.com.

Those retailers would not comment on what they’ve invested in their Spanish sites, but say fast turnaround has not been an issue. MotionPoint translates new product information for Best Buy within 12 business hours, and can do it in four hours for a higher fee, Grace says.

Offshore translation services can be surprisingly inexpensive, says Espuelas of Voy. While not saying how much he’s paying, Espuelas says he gets good results from a translation team in Argentina whose work is checked by in-house personnel.

Best Buy’s strategy

While there is debate about the value of translation, there is little about the growing importance of Hispanic consumers. The U.S. Census Bureau reported last month that the U.S. Hispanic population reached 45.5 million as of July 1, 2007, when it represented 15.1% of the U.S. population and was the largest and fastest-growing of U.S. minority groups.

In certain states, Hispanics make up a much larger share of the population, the Census Bureau says. Hispanics represent 44% of the population of New Mexico and 36% in California and Texas.

It was feedback from store managers in the Southwest and Southern Florida about the importance of Hispanic customers that led Best Buy to review its strategy for reaching Hispanics about 18 months ago, Grace says. The retailer decided to take steps to enable customers to shop in Spanish in stores, on the phone and via the web, she says. “We want to connect to customers in the way they prefer and the language they prefer,” she says. “It’s not just about building a web site.”

Best Buy hired Spanish-speaking call center agents and in stores added Spanish-language kiosks and gave associates badges that welcome customers in Spanish.

As for the web site, Best Buy had MotionPoint translate almost all the product pages, more than 12,000 SKUs, a 110-day project that was completed in late September, just before the holiday rush, Grace says. A four-person team manages the Spanish site, including one staffer who checks all new translations.

Among the categories not translated were movies and music that are not complex purchases. “When you’re buying a computer or a refrigerator, you want to fully understand the intricate details,” she says.

Next: Customer reviews

In fact, Best Buy research shows the preference for shopping in Spanish is stronger when customers shop for complex products like home theater systems or computers. Customers are printing out product detail pages from the Spanish site and bringing them into stores, and call center agents are using the Spanish web content to help Spanish speakers on the phone, Grace says.

Ratings and reviews have not been translated, although Grace says Best Buy hopes to do so in the future. That could be important, as JupiterResearch says Hispanic consumers are more than twice as likely as others—22% versus 10%—to say they were influenced to make unplanned purchases after reading a favorable online customer review.

Some customers—less than 20%, according to Best Buy surveys—toggle back and forth between the English and Spanish sites. Asked why, some say they want to compare the two translations, while others are confused by the wording in one language and go to the other site seeking clarification. Some customers say they want to be sure they are getting the same deal on the Spanish site as on the English site, “suggesting that the customer is still building confidence in online retailers, perhaps,” Grace says.

The Spanish site aims to encourage Hispanics to consider Best Buy, and the growing traffic suggests it’s working, Grace says.

Rosas for Mama

While Best Buy so far has displayed the same merchandise on its Spanish site as on the English site, 1-800-Flowers.com tweaks the product assortment to present items on 1-800-Flowers en Español that have particular appeal to Hispanic customers. That means more roses and brightly colored offerings.

“What bubbles up from our Mother’s Day report is roses, vibrant colors and very colorful arrangements,” says Tania Peralta, general manager of the Spanish-language site.

More than 80% of the products available on the English site are also available on the Spanish site, which went live in late January, Peralta says. A team of about a half-dozen oversees the Spanish site, and the retailer, which previously had a few Spanish-speaking agents, has beefed up its Spanish-language call center staff to about a half-dozen.

Visitors to a Spanish-language site will expect a retailer to provide help in Spanish and the difficulty of attracting bilingual personnel has kept automotive site StylinTrucks.com from adding Spanish content, says Roy Bielewicz, director of Internet marketing for the Cleveland-based company.

For PlumberSurplus.com, the hiring of a bilingual staffer a year ago enabled the web retailer to take a few steps toward better serving Spanish-speaking customers. Under the toll-free number on the Contact Us page is a note “Hablamos español” (we speak Spanish), and calls from Spanish speakers are routed to the Spanish-speaking employee, Arianna Sanchez, who was born in Puerto Rico and raised in Texas.

She also answers e-mail from Spanish speakers and handles live chats in Spanish when she’s in the office. During Sanchez’s working hours, the company places Spanish-language ads on search results pages, hoping to drive Spanish speakers to the plumbing supplies and housewares site.

The click-through rate on Spanish ads is 2.10%, versus 3.64% for English ads. But calculating the conversion rate is difficult, because many of the Spanish speakers ultimately call to place orders rather than completing them online, says Josh Mauldin, customer service manager.

“They do need a lot of handholding because they’re new to the Internet,” Sanchez says. She recalls helping one customer who called to place an order on the site, walking him through each step. “He has now placed three or four more orders on his own, but then he contacts me to tell me, because he wants to hear someone on the other side of the transaction,” Sanchez says.

Sanchez is now working on translating the Terms and Conditions page of the site into Spanish, which the retailer hopes will minimize customer concerns about ordering online. She expected that would take 10 to 12 hours to complete, but admits the process, which includes conferring with Spanish-speaking friends about the translation, is taking longer than she had anticipated.

Is there demand?

Some other major retailers, including Office Depot Inc. and electronics retailer Crutchfield Corp., have translated major portions of their web sites into Spanish. Others display only customer service information or a contact page in Spanish.

For instance, J.C. Penney Co. Inc., has since November 2004 had a “para ayuda” (help) link on the home page of JCP.com, and has Spanish-speaking agents available to help customers around the clock. The retailer has not had many requests for additional Spanish-language web content, a spokeswoman says.

Demand for Spanish could diminish over time as more of the Hispanic population growth is organic—births among U.S. Hispanics outpacing deaths. The latest Census Bureau data shows 59% of the increase in the U.S. Hispanic population from 2000 to 2007 was organic, and only 41% resulted from immigration. Immigrants account for 82% of Spanish-preferring online Hispanics, Forrester says, and each succeeding generation becomes more proficient in English.

Still, if Spanish dominance decreases from about 42% of U.S. Hispanics today to 35% in five years when the Hispanic population is 50 million, that’s still more than 17 million consumers who prefer to speak in Spanish, a big market to ignore, says Felipe Korzenny, director of the Center for Hispanic Marketing Communication at Florida State University.

What’s more, Hispanics today are more likely to retain their identification with Latin America and Spanish because they can go online to listen to radio stations and read newspapers from home, and keep in touch with friends via e-mail and cell phones, says Ray Celaya, a partner in the Barraza Consulting Group, which specializes in multicultural marketing.

Whether that adds up to a compelling argument for Spanish-language web sites will be hard to say as long as the e-retailers with translated sites keep their results confidential. But given the rapid and ongoing growth in the U.S. Hispanic population, this is an issue that’s not likely to go away.