As reported November 8, the Minneapolis-based electronics retailer has decided to abandon plans to bring its big-box retail stores to Europe due to the sovereign debt crisis plaguing the EU. Furthermore, Best Buy announced it would close its 11 retail locations across Great Britain, operated in a joint venture with Carphone Warehouse Group, putting nearly 1,100 people out of work. Why? Economic malaise throughout the EU, in addition to a slowing British economy, were cited as key reasons for the move.
The international news media has focused on Greece, and now Italy has reared its ugly head. What’s more disconcerting is the state of the Iberian peninsula, with Portugal and Spain stuck in low-growth economies that see no sign of a short-term reversal. In Spain, youth unemployment is no different than during the boom years of the late 1980s and early 1990s, when an Expo and a World Cup propelled the nation forward yet failed to create meaningful jobs to college students who fled to Germany upon graduation.
With Nicholas Sarkosy of France busy insulting Israel’s prime minister and Downing Street moderately silent on Britain’s own economic woes, other U.S. companies could follow Best Buy’s lead. This could lead to dangerous and problematic waves of anguish on Wall Street, which has myopically focused on Europe and its ills as harbingers of what awaits on this side of the Atlantic.
It doesn’t have to be this way. The growth engine of the U.S. economy is the multicultural marketplace, led by Hispanic consumers. These important components of today’s America are no longer “segments” — they are the fuel to escape recession and avoiding The Second Great Depression. Best Buy, hopefully, understands this, especially upon hearing the news that as part of its EU roll-out abandonment, it’s decided to invest fully in Best Buy Mobile, committing to its North American platform by buying it outright from UK-based Carphone.
Growth from within, by properly targeting and committing to multicultural marketing efforts, can yield the strong ROI and jump-start the U.S. and Canadian economies at a time that’s crucial to North America’s economic future — offering Bay Street and Wall Street a needed escape from the maladies in Europe and stand out on our own as dual economic forces of the Western World. Given North America’s close economic ties to China, where Pepsico last week secured a major deal for improved bottling and distribution, and the U.S.’s good relationship with Brazil, one of the traditional “BRIC” nations, North America’s potential is still untapped.
Sadly, some companies continue to confound by shrinking their multicultural budgets — or kill them altogether. According to multiple sources, Starcom MediaVest last week was informed by U.S. Cellular that it will not be investing in Hispanic marketing and advertising initiatives in 2012. This shocking news only begs the question ‘Who’s Buying You?’ Otherwise, why would a telecommunications company abandon its activity 100 percent in the one market segment that holds the most potential for long-term consumer growth. Then again, U.S. Cellular may have looked at 2010 Census data and determined that its target Hispanic consumer is English-dominant, consumes FOX and ABC more than Univision or Telemundo and therefore can be reached in general market creative.
The fact that Latinos may consume FOX and ABC more than a Spanish-language television network does not mean that they no longer consume Spanish-language media. As demonstrated at the recent ANA Multicultural conference in Miami Beach, cultural relevance counts: A Miller Lite spot created for Spanish-language television flopped when tweaked for English-language television. Again, relevancy matters — but activity itself matters the most.
In 10 years the U.S. economy could be roaring, with prosperity returning to key Latino states such as California, Texas, Florida, New York and Illinois. Vibrant marketing and advertising to this group can then spur African-American budget increases in Georgia, Michigan, Illinois, New York, Maryland and Virginia. Then, Cantonese and Mandarin efforts in California, British Columbia and the GTA (Toronto) can be the icing on the cake.
Or we can bite our nails nervously as Europe sails into darker waters, dependent on politicians and policies we cannot control while our own actions and abilities are needlessly ignored.
Adam R Jacobson Editorial Services & Research Consultancy
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