New in Retail: Andrea Connect by Fábricas de Calzado Andrea SA de CV
This article is a part of Euromonitor International’s New In Retail series that showcases some of the most interesting retailing concepts from 2016. This month’s entry in the New in Retail series is an overview of Andrea Connect, the internet retailing initiative of direct seller Fábricas de Calzado Andrea.
Fábricas de Calzado Andrea SA de CV is a Mexican direct seller, the core business of which is the manufacturing and distribution of footwear, apparel and personal accessories under the brand Andrea. In addition to its direct selling sales, it has presence in internet retailing through Andrea Connect. Andrea Connect is Andrea’s solution to the issue facing many direct sellers about how to promote internet retailing sales without cannibalizing the sales of its representatives.
Several direct sellers offer online platforms in Mexico, but these are designated for their representatives. Andrea Connect, in contrast, targets consumers, allowing them to shop online while also permitting their sales representatives to earn a commission. When a consumer registers with the website to shop online, one of the required fields is to identify his or her sales representative. The sales representative will then earn a 5-15% commission on the consumer’s online purchases. In the event that a consumer wants to shop via Andrea Connect but does not know a sales representative, the platform has two tools for connecting them. If a consumer signs up through Facebook, the platform will display a list of the consumer’s Facebook friends that are Andrea sales representatives. If the consumer does not find a sales representative in his or her contacts, the system will assign him/her a representative based on the consumer’s location.
Andrea Connect is expected to post positive growth rates during the forecast period, taking advantage of the internet retailing development in the country where an increasing number of people feel comfortable shopping online. The website is visually attractive and easy to use. Also, it allows a variety of alternative payment methods, such as paying for the purchase at a convenience store, which is a good option for consumers that do not have a credit card or prefer not to use one due to security concerns. At the same time, Andrea Connect is attractive to sales representatives as well, because it allows them to earn additional income without needing to invest time delivering the products to their clients and receiving payment.
Andrea Connect will represent an additional distribution channel for the company; nevertheless, it is not expected that the online store will replace Andrea’s direct selling channel. Although internet penetration reached 63% in 2016 according to the Mexican Internet Association, AMIPCI, only 37% of internet users are used to purchasing online. Also, there is the fact that the 5% to 15% commission that a sales representative earns though online sales, is lower than the one he/she earns though direct selling, which ranges from 20% to 30%. Therefore, it will continue to be more profitable for sales representative to make an effort to close a direct selling sale than address their consumers to the online store.