The Challenges of E-Commerce in Brazil: Event Recap from Fórum E-Commerce Brasil 2017
Channel integration is an undeniable reality. Either by embracing the conventional move of starting off in physical retail and then moving to digital channels or taking the less common route of going online prior to launching their first brick-and-mortar stores, retailers are unanimous to acknowledge the importance of having a presence in both physical and digital spheres of commerce.
Euromonitor was invited to attend the Fórum E-Commerce Brasil 2017 which happened from July 25 to 27, in São Paulo, where speakers of all sorts of backgrounds shared their experiences regarding sales strategies, management and technology when it comes to digital commerce in Brazil.
Mobile channel has stablished a new behavior amongst consumers
According to Anthony Long, from Kimberly Clark, mobile devices made a revolution in retail by making it possible for an ever-wider group of consumers to have access to the internet. According to Long, the mobile technology led to a new global mindset.
A similar point was made by Euromonitor International’s head of Digital Consumer research, Michelle Evans who gave an overview of the digital landscape in Latin America, addressing how income inequality among consumers and high costs with mobile phone services are obstacles for digital channels to expand their business. Evans presented a segmentation study of Latin American’s to emphasize the importance of mobile for retail, as consumers are more likely to purchase products through their smartphones than using their computers. Despite being still far ahead from markets in developed economies, Latin America presents interesting growth opportunities in e-commerce, especially those related to electronics, food and air tickets. Euromonitor expects that these categories combined will drive over USD36 billion in online sales in 2020.
Omnichannel: an undeniable reality
Lodovico Brioschi, co-founder of the fashion brand Amaro, spoke about how the omnichannel is reshaping the relationship between online and offline. Brioschi predicted the “death” of shopping malls as known today, stating that they might turn into places where consumers go for entertainment and social gathering rather than shopping. Brioschi emphasized the importance of shopping malls adapting to this new reality where digital and store-based channels are intertwined, with purchases being carried out online at brick-and-mortar stores. According to Brioschi, those sales are counted as sales of the store itself, which therefore will not be in conflict with the mall’s interest.
The challenge of integrating channels convincing store-based retailers that the online channel is an ally rather than an enemy was one of the topics brought by Jonas Waisberg, sales director of Mash Underwear. Waisberg presented the case of Mash’s kiosks, soon to be launched in shopping malls, where consumers will be able to shop using tablets available at on-site. In addition, Waisberg spoke of the online channel as an element to help increase traffic in brick-and-mortar stores. The reason behind this is that consumers are more likely to make the transaction online and then go to a physical store to get the product, so as to not have to pay for shipping. Once at the store, it is easier to engage them with the brand.
The same point was made by Fernanda Galhego, marketing manager at Campneus. Galhego presented her case of building Campneus’ e-commerce from scratch and discussed the challenge of creating the company’s first e-commerce to sell a product that, such as underwear, is not typically purchased online: tires. According to Galhego, “tires” was the keyword whose search grew the most during last Black Friday in Brazil when compared to the year before, signaling that Brazilians are seeing digital channels as an alternative worthy of consideration when searching for the best value deal. While they shopped online for tires, the actual product was taken off from the physical store, where they typically end up paying for additional services, such as tire balancing. Therefore, besides increasing the traffic at brick-and-mortar stores, this strategy helps stimulate additional purchases that contribute to sales at physical stores.
Another hot topic in nearly every presentation was the struggle to integrate channels, so as consumers can return products at the most convenient channel, no matter where the product was purchased in the first place. Price integration was common issue to all speakers, pointing out the urgent need to build strategies so that prices displayed online are the same as the ones on the shelves.
On the technology side, Rodrigo Nasser, founder partner at ITU Partners, spoke of the future of client service in e-commerce when assessing the increasing pace of adoption of chat bots that can not only work through filtering of attribute values, but also through comprehending natural language. André Fatala, Magazine Luiza’s CTO, pointed out that artificial intelligence favors the online channel so as to enhance consumers’ purchasing experience, as well as help retailers manage their inventories.
Recapping the event
From a broader perspective, channel integration was posed as a key challenge to make e-commerce move further in Brazil. A consumer who purchases a good online wants to be able to return that product, if necessary, at any store from that brand – which is currently not the most commonplace. Price integration is essential, as consumers still encounter different prices for the same product when comparing online and offline channels form the same retailer. With the help of artificial intelligence technologies, customers expect retailers to eliminate barriers between digital and store-based retail, so as to put consumers’ purchasing experience first. Those retailers who can adapt will certainly be the ones to gain consumer’s preference over the following years.
Click here to download Euromonitor’s presentation at the Fórum E-Commerce: http://go.euromonitor.com/EV-LA2016-Forum-e-commerce_LandingPage.html