Retailers Need to Understand Better the Complexity of Ethnic Retail Markets to Develop Loyal Customers

Newswise — Awareness that Toronto is home to one of the largest ethnic markets in the developed world is growing among the retail sector. But according to one Ryerson researcher, cash registers won’t ring simply by pinpointing the location of ethnic consumers. Retailers also need to understand the enormous size and complexity of these ethnic markets in order to attract and retain them as loyal customers.

Tony Hernandez, director of Ryerson’s Centre for the Study of Commercial Activity (CSCA), is the lead author of the study, Ethnic Markets in the Greater Toronto Area (GTA). His latest report offers a detailed examination of the region’s ethnic consumer base, and is the second in a series investigating ethnic retail markets in the GTA.

“The scale and nature of ethnic markets are changing, and retailers are starting to take notice of this change and cater to these consumers,” said Hernandez. As proof, he points to the purchase of T&T Supermarket Inc., the largest Asian food retailer in Canada, in 2009 by Loblaw Companies Limited.

Co-authored by Jim Simmons and Shizue Kamikihara of CSCA, the researchers used 2006 census results from Statistics Canada and individual census questionnaires from the Public Use Microfile. The former enabled the researchers to map the spatial distributions of various ethnic communities, while the latter facilitated the creation of group profiles, including demographic and income characteristics. Finally, the researchers used the “Transportation for Tomorrow” survey of travel behaviour to explore the evolution of shopping areas among ethnic communities.

The researchers found that ethnic populations are far from homogenous; nearly half of GTA residents are immigrants and several ethnic communities have a population base of more than 100,000.

Toronto’s ethnic communities are also unique in their degree of diversity, and there are significant variations among and within groups. Each community, for example, lives in a different neighbourhood, shops in a different location, and buys different products and brand names. Furthermore, members of the same ethnic group also vary greatly in age, level of education, occupation, income and type of housing.

For instance, more than 65 per cent of Chinese shoppers own a home, with half of all households consisting of three or four members. In addition, a substantial number of Chinese consumers are located between Finch and Steeles Avenues, with Victoria Park on the west and McCowan Road on the east. For this ethnic group, the most visited shopping destinations include Bridlewood Mall, Scarborough Town Centre, Miliken Crossing, Woodside Square and Agincourt Mall.

In comparison, South Asians are more inclined to rent than Chinese consumers and are less likely than Chinese households to have five or more members. Considering the sizable growth of the South Asian community in Mississauga and Brampton, the top shopping destinations for this ethnic group include Bramalea City Centre, Mountain Ash Road/Bovaird Drive and Trinity Common Mall.

So how might retailers use this information to attract ethnic consumers? Hernandez believes stores may offer a larger range of products, advertise in other languages and even change storefront signage, as the LCBO did in Chinatown.

“We still have a lot to learn about immigrant consumer behaviour,” said Hernandez. “We may know where ethnic stores are located, but we need to know more about immigrants’ consumption habits and generational differences.”

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