Minority Consumers Lure Retailers Back To Inner City

Maurice Glass walked down Broadway Street, once a thriving part of this city across the bay from San Francisco and now a wasteland of boarded-up windows and empty lots that serve as evidence of the forgotten inner city.

Glass, a retired Oakland resident, didn’t get very far before finding something new - a Sears, Roebuck and Co. store, the first this town has seen since the retailer pulled out in 1993.

“It seems like they’re investing in the inner cities again,” said Glass, a former Sears employee, as he looked at ties and slacks in the new store. “I tell you, I know we need them - and they’re beginning to realize they need us.”

From the major retailer to the regional grocer to automobile and boat dealers, companies are becoming increasingly aware of the value and potential rewards of targeting the minority consumer.

Population statistics, street signs, even an infusion of exotic restaurants, point to the fact that the typical American can no longer be considered white and prosperous. The melting pot is constantly simmering, and companies are increasingly scrambling to get their share of the stew.

Some say it’s about time.

“There was a sense of abandonment when Sears and other retailers pulled out,” said Oakland Mayor Elihu Harris, who attended the new store’s opening on Nov. 2.

“You can see from the crowds here that they’ve been looking for this, and I think it shows there is a real underserved retail market. I would think that logic alone would dictate that you come and service that market and reap the profits that come with it,” he said.

Sears opened seven new stores in that same day in the San Francisco and Los Angeles areas, complementing a return to the inner cities that includes recent store openings in the New York City borough of Queens and in San Antonio, Texas.

Like other companies, Sears is finding the money is there for the taking. The nation’s black and Hispanic populations are becoming more affluent, recent studies found, with a combined spending this year of about $630 billion that outpaces white spending in such areas as cars, children’s clothing and perishable foods.

The increased buying power is expected to become more pronounced in coming years as those minority segments grow at a faster clip than the general population.

Now, companies are looking anew at markets where they once said they couldn’t make any money. While the trend is attributed in part to falling real estate prices that make doing business in inner cities more attractive, there’s more to it than that.

“Downtown had been left behind by a lot of people, in fact, left behind by us,” said Sears Chairman Arthur C. Martinez. “Our approach is, as we look at the growing multicultural, multiethnic character of America, we want to do business with all those customers. They’ve got just as much buying power as whites in suburbia.”

And minorities generally tend to be more brand-loyal, which would benefit businesses that move quickly to embrace them, said Ken Smikle, president and editor of Target Market News, a Chicago-based company that tracks black consumer marketing and media.

“For those companies who court black consumers with advertising and special acknowledgment, that rare recognition always pays off in long-term patronage,” Smikle said.

Many companies in recent years have gotten savvy about so-called niche marketing. J.C. Penney, Spiegel, Avon, Hanes and others now have products and catalogs tailored specifically to minority shoppers. Automobile, boat and food companies have begun advertising on predominately black and Hispanic television and radio stations, and banks are teaming with supermarket chains to open branches in inner-city neighborhoods where both once refused to tread.

Not only are companies coming back, they’re portraying their return as a win-win situation for the community and the business.

“Companies are realizing there are a lot of Good Samaritan aspects by returning to the inner cities, and some are even wondering why they didn’t do it sooner,” said Dr. Audrey Guskey, a marketing expert and professor at Duquesne University.