ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, December 24, 1996 TAG: 9612240038
SECTION: BUSINESS PAGE: B6 EDITION: METRO
DATELINE: OAKLAND, CALIF.
SOURCE: CLIFF EDWARDS ASSOCIATED PRESS
THE MELTING POT is constantly simmering, and companies are increasingly scrambling to get their share of the stew.
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.
Some say it's about time.
Sears this fall opened seven new stores in the San Francisco and Los Angeles areas, complementing a return to the inner cities that includes New York City's borough of Queens and 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, which typically produce larger families, grow at a faster clip than the general population.
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 Martinez. ``Our approach is, as we look at the growing multicultural 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.
``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 Audrey Guskey, a marketing expert and professor at Duquesne University. ``It helps revive a community by adding energy and a spark, but it's also a very lucrative opportunity.
It's the individual touches that seem to matter most for success, urban experts and marketing people say.
Sears, for example, sells a line of clothes called African Village that are designed specifically for black women. Merchandise at some stores also is tailored to meet the needs of the majority of the clientele, such as rice cookers for populations with a heavy Vietnamese presence.
Others are going even further. Dollar General Corp. recently worked with the Columbia, S.C., Housing Authority to open a third store near a public housing development, with residents working in those stores. The Nashville, Tenn.-based chain also requires public housing residents working for them to take literacy training programs.
``My secret hope is that other companies, other executives will see in this a challenge for them to figure out how to leverage what their business does for the greater good,'' said Cal Turner, the company's chairman.
Doing more now might provide for a bigger payoff down the road. The Census Bureau projects the minority population will grow at a much faster rate than the white population through 2020.
The agency said whites by far will make up the largest number of Americans, although not as big a percentage as they do now. The percentage of the population that is white will shrink by 2020 to 78.2 percent from 83.3 percent.
Immigration and rapid population growth are expected to make Hispanics the nation's largest minority, totaling 15.7 percent of the population. Blacks will be the second-largest minority at 13.9 percent, with Asians and Pacific Islanders at 6.9 percent.
LENGTH: Medium: 90 lines ILLUSTRATION: PHOTO: AP Retailers are becoming increasingly aware of theby CNBvalue of targeting minority consumers. Sears included displays for
its African Village collection when it reopened in Oakland, Calif.,
in November. color