A new shopping journey begins

Has consumer behavior changed with the pandemic? Will they make their purchases only online? The issue is complex. Some bet that yes, and others do not see major changes, despite the increase in e-commerce sales during the period when stores were closed. What has really changed is the shopping journey, because now the consumer is on several different channels. “What will remain is everything that has proven practical or advantageous for them, and not for the brand,” says Ricardo Rodrigues, Co-founder of Social Miner, a company that works with behavioral data and artificial intelligence.

In the post-pandemic game, whoever believes that the same consumer is in multiple channels wins the market.

A research carried out by the company in partnership with Opinion Box shows that, during the pandemic, purchases via WhatsApp greatly increased. When made from the store, they reached 40.7%. By WhatsApp directly from sellers, 27.9%. To find online stores, 46.3% of consumers used search engines, 38.7% used apps, and 31.3% found stores via Instagram. The latter had representativeness of 43.6% among comparators in the range of 16 to 29 years of age, but in the case of people aged 50 or over, the index was only 12.7%.

“The omnichannel factor has always existed, stores have not begun sales over phone, direct mail and e-mail as of today,” recalls Ricardo. “The difference is that now there are multiple channels, especially digital ones. The challenge is the ability to have a unique view of the customer. It means understanding that the person behind the e-mail is the same person who goes to the physical store; it is the same person who is on the phone, and that is why you need to know how the brand or store can deliver a unified experience. It is a trend that has been accelerated and that will continue to change as new channels appear. From now on, those who adapt faster will do better.”

Online growth

“More than 2 million new consumers made their first purchase over the internet during the pandemic,” says Rodrigo Bandeira, Vice President of the Brazilian Electronic Commerce Association (ABComm). “They are likely to continue to buy online. WhatsApp, Twitter and social medias, in turn, also achieved more sales in the period. In some cases, mainly due to the absence of an official sales channel.”

“In Brazil, the percentage of online sales is around 5% to 6%, but it could reach 10% by the end of 2020,” says Alessandro Gil, the executive director of Omnichannel, E-commerce and Marketplace at Linx, a company specialist in technology for retail. “The sales dynamics we know will undergo major changes, and we will have to adapt to a new normality, more digitalized, with a greater number of home deliveries and contactless payments. These are standards that could take years to be altered, but are now being adapted. There will be no going back.”

“Online retailing already had a well-established position before the pandemic, but it still competed a lot with all that the physical shopping experience offered,” recalls Alessandro. “The physical store had differentiated stock and solved customer demands, such as immediacy to obtain the product and less expense on freight. The pandemic has accelerated distance shopping, home delivery and contactless payments. As such, it is important that retailers adapt to this reality.”

Digitalized economy

“The pandemic may have shortened the way for the digitalization of the economy. Contactless technologies, such as QR Code and NFC, will become more present in stores,” says Thiago Chueiri, business development director at PayPal Brazil. “The more we can digitize the economy, the more inclusive we will be. We can make financial services more accessible, convenient and secure, and bring a huge slice of the population into the global economy. Between April and May, we had more than 250 thousand new accounts, a historic number.”

A study by the Global Consumer Survey, carried out just before the quarantine, showed that 82% of Brazilians are interested in downloading an app to perform self-payment at retail stores; 81% to use biometrics for purchases, and 76% to shop online. PayPal processes more than 33.8 million transactions per day and about US$ 22,000 in payments every second, learning about customer spending patterns, behavior and location, to ensure secure transactions. “Due to the scale of our platform, we have become adept at differentiating between normal patterns of customer behavior and potentially fraudulent ones. We use real-time intelligence,” says Thiago.

With the digital inclusion, the opportunity arose to reach new markets,” says Eduardo Vils, Founder and CEO of Justa, a company that operates in the segment of payment methods and retail credit. “Geographical barriers do not exist online, but it is necessary to be more careful than in face-to-face sales to minimize risks. In the pandemic, sales via payment links grew. Retailers have reinvented their businesses and offered new services by transforming their card machines into credit machines to pay bills. They generated a flow of people to the store and revenue from the sale of other products.”

Retail behavior

 The most critical period of the pandemic was faced by retailers, each according to their area of activity. Some bet everything on e-commerce, others on customer loyalty. It was not easy, but they made the crossing and they have plans for the times that are coming. Now begins the battle to bring back the consumer, as the following reports show.

With the temporary closure of more than 1,000 stores throughout Brazil, it strengthened its digital platforms and launched the “vendedor online” (online seller), a tool that enabled purchasing on its websites with the assistance of a specialized seller, and also the digital payment booklet. “It is a great novelty to ensure that non-bank customers enter online shopping,” says Josiane Terra, e-commerce director at Via Varejo.

This new type of sale was successful and should continue with the reopening of physical stores. Vendors are equipped with cellphones, and the units have Wi-Fi so they can also make sales via WhatsApp. The network is using its artificial intelligence structure to access a database with more than 85 million customers, and understand each need, according to the purchasing behavior.

“The physical store will continue to have its space, but with less participation, due to new consumer habits,” says Josiane. “The world will no longer be the same after the pandemic. Companies that are preparing to have support and quality in their respective sales and service channels will be ahead in the market in which they operate.” 

In April, the company acquired ASAP Log and has used the stock and part of the physical space of stores as mini hubs, adding up to more than 1,000 small distributors across the country. With that, it delivers an expressive number of products within 24 hours. “Our biggest sale comes from e-commerce and apps. We worked hard on the exponential growth of the base of active users in apps. We started at 1.5 million in June 2019 and we have reached 15 million in June this year. We are already a mobile first operation, in which mobile (m.site + apps) represents more than 50% of online sales,” says Josiane.

With 279 stores in São Paulo, Minas Gerais, Paraná and Rio de Janeiro, sales doubled during the pandemic, compared to the same period in 2019, even without e-commerce. “Today, it is not a good deal, it cannot be sustained,” says the general supervisor José Domingos Alves. “It is not a matter of going against the tide, but of acting in another format, the ‘retail from people to people,’” defines the executive. Therefore, it also does not sell extended warranty. “Our business is not to sell services,” he says. Only in the pandemic, they used WhatsApp as a sales tool.

Of the total sales, 70% are made via payment booklet. As it is common for customers to go to stores to make payments, the chain sent a message to them, early in the pandemic, stating that it would not charge interest while the units closed. The announcement was aired on radio, television and social media, it had strong repercussions, and increased customer loyalty.

The chain is the third largest in Brazil in retail revenue, amounting BRL 5.5 billion in 2019. It did not discharge any employees, kept paying salaries and paid all suppliers, even without revenue in the first moment of the pandemic, according to José Domingos. “Our cash structure is solid, we had no difficulties. In these 68 years of activities, which the chain completed last July, we have not closed any stores and maintained the standard of 1,400 m² in all of them. We work with a wide range of products, so we must have adequate exposure and comfort for customers. We are on the right path.”

This year, it will invest BRL 150 million in the construction of a distribution center in Salto (SP), with 100 thousand m², which will start to function partially in October. In July, it opened a store in Rio de Janeiro. This month, it will open another one in Ilha Bela (SP), and three more are under construction, in the countryside of São Paulo. “We are confident and doing our part,” says José Domingos. In his opinion, 2021 will be a year of recovery.

Due to an unforeseen event, the company stayed out of e-commerce and had to accelerate the new platform, which would have started operating in August. Until June, when the partial opening came, it used several means to keep up sales, says the President Ubirajara Pasquotto. “In the first moment, we stopped to analyze the situation and the tools we had, in addition to our application. WhatsApp, which we used as a complement, became the protagonist.”

“What happened was a learning experience, the measures taken helped to get through the period, but a lot has changed,” says Ubirajara. “The fact is that we will not go back to managing the company as we were before. Adopting other technologies and a more accelerated vision of transformation, which also includes the relationship with the consumer. All of this became a normal working instrument.”

Despite the acceleration of e-commerce, the company does not believe that the physical store will lose space, as it will be a consumer assistant in the search for the product. “The customer will be better prepared to make the purchase, they will arrive more focused. We are not going to become digital, but whoever does not act in the omnichannel concept will be out of the market,” says the President.

Retail faced the pandemic very seriously. “Customers have advanced much more than what was in the minds of retailers, and our big challenge now is to rescue the Brazilian’s confidence and keep going without fear. The recovery will not be quick, but I believe that we will have a good end of the year,” comments the President of Cybelar, a chain with 80 stores in the countryside and in the São Paulo city.

The agility of the IT team and the renegotiation with the suppliers of products and services were essential for the store chain to go through the most critical period of the pandemic. “The company used its credibility stock. We spoke to each one of them personally and we had full support. We were the first to close, on March 20. It was the saddest day of my administration,” says the President Otelmo Drebes.

As 80% of its sales are in installments, payments are now made digitally. WhatsApp played an important role, accounting for 20% of sales. The company has been in business for 64 years, and works with household appliances and clothing. They came up with Lebes Bag, to take the products to the customer’s home. E-commerce, with which I did not work due to low profitability, is now an alternative.

Today, the customer chooses how he wants to buy and pick-up the products, says the president. “Buy online and receive it at home, in two hours. We have our own logistics company and small distribution centers. Or picking it up at the store. They also choose the payment method, from payment booklet to digital payment. We have to adapt to the situation,” says Otelmo.

Online sales will increase, but will not keep consumers away from the store, guarantees the President. “We cannot think that people will buy everything online. They like to go to the stores, use them as meeting places. They are the malls of small towns.” With 160 units in Rio Grande do Sul and three in Santa Catarina, Lebes plans to open other units, but smaller in size, around 600 m², as opposed to the current 1,000 m².

More than 2 million new consumers made their first purchase over the internet during the pandemic.

In 2019, the Novo Mundo chain felt the need to find a methodology to tie together all its dots and act once and for all in the concept of multichannel, says the CEO José Guimarães. “We started a project for all channels to live without borders, i.e., with the same mix of products, prices, payment methods, delivery deadlines and communication. The implementation would take two years, and it would require a transformation in the company and a change in the profile of employees, but the pandemic accelerated the process.”

In this concept, the stores are smaller – the average of 1,100 m² fell to 450 m² – and the consumer chooses the channel and the place where they wants to buy, receive or pick-up the products. “Today, consumers require convenience,” says the CEO. In the project, the company had the collaboration of Fundação Dom Cabral in the study to map the profile of the generations. And today, there are opportunities for those looking for their first job and for retirees. “Achieving the company’s purpose is greater than hitting the sales target,” says José.

Last July, it opened four stores with the multichannel concept and self-service in Anápolis, Goianira, Inhumas and Nerópolis (GO). It promises another 26 by the end of 2020, and guarantees that by 2021, all of them will be in this format. The investment of BRL 80 million should have a quick return, as shown by the first results. “In June, sales grew 25% over the same period last year, and maintained the same pace in July,” says the CEO.

Before the pandemic, the physical channel sold more than the online one. However, in April, online sales grew 30% over the same month of 2019. WhatsApp accounted for 12% of sales in the period, and the marketplace already has more than 500 sellers in prospecting. The 135 units of the chain are in the states of Tocantins, Mato Grosso, Minas Gerais, Bahia, Maranhão, Pará and Amazonas, in addition to the Federal District. “The future is smaller stores, with online integration, and testing full scale solutions for products and services for the consumer,” bets José Guimarães.

Owner of Americanas, Submarino, Shoptime and Sou Barato, the company has been accelerating the hybrid model of digital platform for the past three years, combining direct sales, marketplace and services. During this period, the assortment of websites grew over 10 times, reaching 31.7 million products in more than 40 categories. By the end of 2022, the expectation is that it will increase to more than 100 million national and imported products, and exclusive brands.

During the pandemic, B2W Digital launched the #Apoieocomerciolocal (#Supportlocalcommerce) campaing on the Americanas, Submarino and Shoptime websites, encouraging consumers to buy from small local entrepreneurs. In the first 15 days of the campaing, hotsites registered more than half million hits related to local commerce searches.

To guarantee working capital to partner store owners, it expanded the credit offer. Now it offers special conditions, such as a grace period of up to 75 days for the beginning of the payment of installments of credit acquired with the company, the possibility of renegotiating contracts and making weekly transfers, instead of bi-weekly.

Google Searches

At the beginning of the quarantine, essencial products, in categories such as food, hygene and cleaning, gained relevance in Google searches. Moving forward, the increase un searches for some categories signaled that Brazilians were adapting their routines to staying more at home. Categories such as sports equipment, games, toys, books and computers. Afterwards, interest in small appliances like bread and coffee machines, and vacumm cleaners grew. From July 4th to 10th, home categories, such as furniture, decoration, bed, table and bath linens, were some of the ones that grew the most compared to the same period of 2019.

By Leda Cavalcanti

Source: Eletrolar News Magazine #137