Physical and high-street stores still exist for one specific reason: in-store customer service that caters to customer needs in the moment.
Some months ago I finished reading the masterwork by Stephen King, The Dark Tower, all the seven volumes. If you haven’t read it, try the film and the TV series coming live next year with Idris Elba and Matthew McConaughey.
In a remarkable scene in the first book, the character Jake Chambers says to Roland Deschains, the main protagonist:
“Go, then. There are other worlds than these.”
Why am I quoting this, beyond my appreciation for the book?
Brazil, my motherland, is going through hard times, everybody knows. Maybe you at least read about it in the news. Besides the serious political crisis—leading to the second presidential impeachment process in our recent history—we’re living the third year in a row of the worst recession period since 1930.
The Brazilian economy is facing a 3-4% decrease in GDP per year. It’s a time for survivors—especially innovative survivors. During the fat years, selling was easy, almost automatic. Now, we need to really think – and the e-commerce trends in Brazil demonstrate that retailers there realize this.
For example, let’s take the retail market.
E-commerce trends in Brazil: Going digital will reap rewards
According a report from the Institute for Retail Development, the Brazilian retail market decreased 4.8% in 2015 compared to the previous year. This resulted in the closing of stores, in reviewing expansion plans and the departure of some international players.
But there are other worlds, Roland, if you’re capable of leaving your comfort zone.
The annual report Webshoppers, from E-bit institute, describes huge growth for e-commerce retailers: 15% YOY (2015/2014), totaling around USD 11 billion. Why? Because the companies, the entrepreneurs and the customers are truly embracing the digital transformation as no longer merely a slogan, but an imperative.
Digital is a real and feasible way to create a new, engaged, and direct relation between commerce and buyers.
And the task is being well developed: Webshoppers also reported a better satisfaction level from e-commerce users: 65% in 2015 versus 61% in 2014.
In fact, it appears to be a trend that all countries in Latin America can rely on. A 2016 white paper prepared for the Nielsen research firm claimed that Latin America took the second place among all the world regions regarding e-commerce growth, highlighting Brazil and Mexico. While the Baby Boomers dominate global consumption today (40%), Millennials already are the majority in LATAM, creating the need for a mix of formats and channels still more indispensable.
I loved the words by Flávio Rocha, CEO of Riachuelo, one of the larger retail fashion chains in Brazil, about his vision for 2016: “Nothing like a crisis to unfold creativity, smart solutions, changes … and a lot of abandonment of comfort zones.”
By the way, this year Riachuelo is looking to launch its e-commerce project. Later than its competitors, but, according Rocha, the time is right now, after gathering years of learning and preparation. Welcome to the digital world, Riachuelo!
The road is still being built, but the outcome will be brighter when in-store retail learns from e-commerce, and e-commerce learns from physical retail – of this I have no doubt.