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Blockbuster Aims for Hispanic Market
By Ellis Mnyandu
November 1, 2002
NEW YORK (Reuters) - Blockbuster Inc., the world's No. 1 movie rental chain, said on Thursday it has begun setting aside floor space in nearly 1,000 of its U.S. stores to target Hispanics, a group estimated to have about $500 billion in annual purchasing power.
The installation of the purple sections comes as Blockbuster attempts to triple its 3 percent share of the $13.6 billion DVD retailing market that analysts see topping $20 billion by 2006.
Hispanics living in the United States now number more than 35 million, according to recent U.S. Census data. By 2005, Hispanics are expected to make up the largest U.S. minority group. Texas, the home of Dallas-based Blockbuster, also is home to a sizable Hispanic population.
Nick Shepherd, executive vice president, merchandising and chief concept officer for Blockbuster, said the company is incorporating Spanish language signage at the designated stores and increasing the selection of Spanish language rental and retail products.
"The Hispanic population is the fastest-growing customer segment and we feel these new changes will help us better serve our Spanish-speaking customers," Shepherd said in a statement.
Blockbuster also plans to stock up on confectionery goods that appeal to Hispanic home movie and video gaming enthusiasts, another company official said in an interview during a tour of one of Blockbuster's New York stores.
Hispanics' estimated annual spending power of about $500 billion has made this group a very attractive target market for corporate America.
In one sign of just how vital the Hispanic market has become, a number of Hispanic-oriented broadcasting companies have successfully weathered a brutal advertising slump that has rocked most U.S. media outlets in the past 18 months.
In September, discounter Kmart Corp. also announced the launch of a magazine for Hispanics as part of a stepped-up marketing campaign to help the company in its effort to emerge from a bankruptcy restructuring.
Blockbuster, a subsidiary of Viacom Inc., operates more than 8,100 stores throughout the Americas, Europe, Asia and Australia. The company competes with the likes of Hollywood Entertainment Corp., online DVD renter Netflix Inc., and giant Wal-Mart Stores Inc., which is launching its own online DVD renting service.