L.A. RETAILER IN TOUGH MARKET CUSTOMER PROFILE CHANGING ALONG WITH COMPETITION.

Byline: JULIA M. SCOTT Staff Writer

Los Angeles retailers are facing one of the toughest markets ever as the Internet draws more shopping dollars, competition grows among stores, and a changing customer base now features a mushrooming Latino population.

``The landscape has changed for everybody,'' said Al Frank, a consumer business expert at the consulting firm Deloitte & Touche, which recently released two reports that address the changing nature of retailing. ``Everybody has to figure out in their own way how to stand out in the crowded market.''

Nationwide, the Latino population is expected to triple by 2050, making up 24 percent of the country, according to the U.S. Census Bureau.

In the San Fernando Valley, Latinos have increased from about 18 percent of the population in 1980 to 42 percent in 2004, said Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge.

Many immigrants are undocumented, living without a Social Security number or checking account. Saving up to buy pricey items can be difficult, and finding a retailer who can give credit without the traditional qualifiers is even more of a challenge.

One retailer, La Curacao in Pico-Union, is turning a profit by offering nontraditional credit to a community largely ignored by the mainstream, Frank said. La Curacao gives credit based on well-researched personal references, not yearly income or Social Security numbers.

``Surprisingly, the default rate is not that much higher -- slightly higher, but not that much higher -- than a prime kind of customer,'' Frank said.

Many retailers are aware that Latinos will become an ever more important part of their clientele.

Stores catering only to Latinos have popped up, and mainstream retailers have added clothing lines that appeal to Hispanics. Others have hired bilingual staffers, added Web sites in Spanish and printed bilingual advertisements.

``It's a growing market segment,'' Blake said. ``It's growing in terms of people and in terms of money spent.''

To survive the new retail landscape, Deloitte offers a few tips.

Stand out from other stores.

``If you're in a rural area, maybe you're going to go to Wal-Mart to buy your clothing,'' Frank said. ``If you are standing in downtown Los Angeles, there are a million retail choices. Why are people going to choose to drive over to Paseo Colorado rather than go to The Grove?''

For a store to create a different brand means knowing the customer intimately. Without that understanding, it's difficult to build a business around a particular niche. Big-box stores like Home Depot and Barnes & Noble are going to have a hard time growing, partly because they appeal to such a wide customer base, Frank said.

Boost the percentage of browsers who buy.

Some outlets, like grocery stores, convert nearly all the people who enter into shoppers, but others have a harder time. Internet retailers make a sale just 2 percent of the time, and department stores convert customers about 25 percent of the time, according to Frank.

Using technology to understand what inventory moves quickly -- and in what sizes -- will improve chances that customers will find the item they are looking for. And shorter lines will reduce the number of shoppers who are ready to buy but leave because of the wait.

Pump up the customer service.

Creating a friendly atmosphere with good service will entice customers to return. Retailers such as Jamba Juice and Best Buy already have aggressive greeting policies in place, with employees saying hello to each person who walks in the door. Target ups the ante by referring to customers as ``guests.''

julia.scott(at)dailynews.com

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