GfK Analysis: 2021 is still unknown

By Leda Cavalcanti

The year 2021 started with two “Brazils”, one formed by consumers from the middle and upper classes, mainly based in the South and Southeast regions of the country, and the other composed by classes C, D and E, who, in 2020, went shopping with the extra income received from emergency aid. “There are doubts about the return of the aid. Therefore, the challenge for the industry is to assess how it can stimulate consumption in these two “Brazils”. The purchase of durable goods is due to the availability of income and confidence”, says Fernando Baialuna, director of the research firm GfK.

The wealthier classes, even without the income power of years past, will continue to consume, but the poorest will resent the lack of money to do the same. On the other hand, trust is a common need for all social strata, and this translates into vaccination, job security and emergency aid. “Fear represses. All uncertainty creates insecurity”, says Fernando. For him, the end of this first quarter will define the behavior of the following months.

“It is necessary to equate margin and volume. This is a reality in 2021”

Given this situation, it is up to retailers to stimulate credit and extend the purchase payments terms. “There is no other alternative. Both are important factors to encourage consumption among the poorest, even considering today the indebtedness is currently one of the largest in history. Without income, the consumer changes the desire to buy”, says the director of GfK.

High Prices

In 2020, pressured by greater demand than supply, prices in the electrical segment rose. From January to December last year, they increased by 21% compared to the same period in 2019. “There was an increase in the cost of input, inflated by the scarcity of raw materials and the rise in the dollar, but this does not lessen the challenge of controlling prices. The margins transfer was high. It is necessary to equate margin and volume. This is a reality in 2021”, highlights Fernando.

The increases occurred in virtually all categories. In the gamer segment, for example, it was 51% and, in the tablets, 49%. Last year, consumers bought, regardless of price, but their behavior in 2021 is still not very clear. It will depend on the availability of income and the increase in confidence, says the director. “Another important aspect is the industry working on the product mix with more careful and sparse margin transfers.”

“Trust is a common need for all social strata, and this translates into vaccination, job security and emergency aid.”

In parallel, there is the new consumer behavior, which is more informed and prepared to deal with products. Consequently, it is worth analyzing your reactions this quarter. “In Brazil, the issue is economic. A lot of people in class D are trying to buy their first computer, while those who have more income upgrade their devices because of their work in the home office”, says Fernando.

The dearest products

In products, the trend in 2021 remains the same as last year. The dearest items remain the robot vacuum cleaner, video games, once a niche and now a promising category for the coming years, smartphones, TVs, kitchen appliances – only electric fryers grew 51% in sales in 2021 compared to the previous year – and laptops, whose estimated demand for the coming years is 25 million units.

In general, e-commerce helped to increase the numbers of these categories, which are highly sought after in the sales channel. In the case of the white line (large home appliances), which recovered and performed well in the fourth quarter of 2020, consumers prefer to see the product in the physical store. “It is a two-step purchase, he can even finish online, but he goes to the store to see the space that the product will occupy in his home,” says Fernando.

“The dearest items remain the robot vacuum cleaner, video games, TVs, electrical kitchen appliances, and laptops.”

The fact is that the home has changed and may not return to what it was, says the director. “The consumer has learned to enjoy a new routine, lives and works in the same place. Thus, the changes were many. The act of cooking became a hobby, so he better evaluates the food, the service and the price charged when he goes out to dinner, for example, and took the means of entertainment into his home.”

Source: Eletrolar News Magazine #141