PRESIDENTS SPECIAL – RETAIL
by Leda Cavalcanti and Dilnara Titara
Once again, companies in Brazil are calling for the much talked about and debated tax reform, political stability, tax reductions and legal certainty as the most effective way to attract investment. It’s almost a mantra that is repeated every year. We trust that the image of the proverb “soft water on a hard stone so beats until it pierces” is valid, an allusion to the fact that tenacity is capable of overcoming all difficulties; we hope so.
The company’s appeals are the same as in recent years and remain unanswered. It must be recognized that recent times have not been easy due to covid-19, whose effects have reached countries around the world, with serious consequences. One of the most serious problems for the electronics segment was the lack of inputs, which caused very large losses in production. In addition to the increase in international shipping costs. Another was the devaluation of the real against the dollar.
Inflation and interest rose, and Brazilian purchasing power fell, affecting consumption. The inflationary mentality seems to return with force when the country believed that it was finished. In 2022, Brazil’s growth forecast is 0.8% to 1.9%, while in emerging countries it reaches 5.1%, according to experts and the International Monetary Fund (IMF). Companies do not ask for miracles, but to look at the country more seriously.
It is necessary to improve economic indicators, as well as education and training of manpower. It is also necessary to put a stop to the high unemployment rate and the fall in income. Companies are ready to collaborate, but the basic problems mentioned above require a solution. Brazil cannot walk with endless debates. It’s time for conclusions, less polarization in politics and more common sense in decision-making.
AMAZON
The company is obsessed with the customer, says Amazon’s retail leader in Brazil, Marcelo Giugliano. “Our focus is for the consumer to have the best shopping experience possible. That means providing the best deals in a portfolio with more than 50 million products in more than 30 categories, good prices, and free shipping options all over Brazil.”
When talking about buying experience, the company is essentially referring to the person who expects their product to arrive safely and quickly. “One of the main ways to guarantee this is by investing in logistics. Today Amazon operates 12 distribution centers in the country: five in Cajamar (SP), two in Cabo de Santo Agostinho (PE) and the others in Betim (MG), in Santa Maria (DF), in Nova Santa Rita (RS), in São João do Meriti (RJ) and in Itaitinga (CE),” says the retail leader.
“It’s worth remembering that globally, 55% of units sold are from partner sellers, which are mostly small and medium-sized businesses.”
Present in the country for 10 years, in 2019 it had the major expansion in its store and, in 2021, introduced new categories, providing job opportunities and support for the development of small and medium enterprises. “Recently, we expanded the FBA, a program in which the entire logistics process of the seller partner is on Amazon. By 2022, we want to reduce the barriers for small and medium entrepreneurs to reach the international market. It’s worth remembering that globally, 55% of units sold are from partner sellers, which are mostly small and medium-sized businesses.”
BEMOL
finance director
The year 2022 will be extremely challenging given the economic and political scenario, says Marcelo Forma, BEMOL’s finance director. “On the other hand, the pandemic projects to have its effects modulated, and the supply chain seems to normalize. We expect a better year than 2021, with a focus on efficiency, greater productivity in operations, and improvement in our margins. We will continue our expansion plan, but at a slower pace.”
This quarter, it launches its digital financial services platform, Conta Bemol. Its main attributes are payment and installment accounts for purchases in stores and e-commerce, as well as loans to customers. Integrating channels is essential. “At Bemol, the customer buys and pays from anywhere. In the last two years, e-commerce has increased its share of our sales by 10 times. It went from 2% to 20%. Since 2020, we have expanded our presence in stores in the interior of Amazonas, Rondônia, Roraima and Acre. They are smaller, but served simultaneously by our e-commerce”, says Marcelo.
“We expect a better year than 2021, with a focus on efficiency, greater productivity in operations, and improvement in our margins.”
In the economy, inflation worries the director. “It needs to quickly drop from 10% to 5% and then move towards the center of the target established by the Central Bank, in the range of 3%. The interest rate, which has risen to double digits, should decrease as inflation becomes more balanced. Incentives and programs are imperative for the generation of jobs in order to increase the population’s income and consumption capacity.”
BERLANDA
The economic scenario presents challenges, but the company has invested in management since 2015 and trusts in the strength of its leadership, says President Nilso Berlanda. “This year, we plan the opening of 15 units and the expansion, renovation and reopening of another 10. We will complete the internal positioning of the physical stores, which will have a new visual presentation, to improve the customer experience.”
The consumer’s shopping experience is one of Berlanda’s biggest concerns. “We want him to have the same satisfaction with the brand regardless of the means by which he acquires the product or service. For this, we invested significantly in multi-channel and we have the entire team connected. The best sales channel is where the customer wants to buy”, says the president.
“We have three furniture factories, which supply our physical stores and e-commerce. This is one of the biggest differentials that a retailer can have, combined with investment in logistics and strict quality management.”
In 2021, the network suffered, especially in the first half, with the difficulty of suppliers to deliver products due to the lack of components, but this year it is much better. The availability of items encourages, says Nilso. “Last January, we grew 18% in sales compared to the same month in 2021. Our goal was 10%. It is worth remembering that we have three furniture factories, which supply our physical stores and e-commerce. This is one of the biggest differentials that a retailer can have, combined with investment in logistics and strict quality management.”
LEONFER ATACADO/ LEONFER SHOP
The company’s perspective is that 2002 will be a year of great caution, says partner-director Leonardo M. Busiquia. “We started observing a beginning of recovery in the economy, but now there is the possibility of several economic consequences of the war in Ukraine that will be reflected in Brazil. Our biggest challenges will be the external factors, such as the high prices of commodities, inflation, high interest rates, uncertainty about the elections, and the production of industries. Even so, we are confident in Leonfer’s growth ahead of 2021.”
This year, the company will take advantage of the calendar of commemorative retail dates to seek opportunities with the industry, thus meeting the expectations of its customers. “We will also have the World Cup, an event that always generates growth in demand for products in our segment,” says Leonardo. For him, inflation control and the advancement of tax reforms can contribute to retail development and consumer confidence.
“We will also have the World Cup, an event that always generates growth in demand for products in our segment.”
The current consumer is increasingly demanding, says the partner-director. “They search more easily and seek greater agility from the service to the closing of the deal and the delivery of the product. In distribution, we see our retail customers using a lot of non-presence sales with withdrawal in the store, which generates customer loyalty and greater confidence in the purchase. In e-commerce, we seek to increasingly perfect the multichannel, generating various ways for the customer to find us and be served in the best way.
LIBERATTI
Retail is fully correlated with GDP. When there is a trend of GDP growth, the same happens with retail, says Pedro Henrique Regazzo, CEO. “In 2021, we suffered from the hangover from the monetary base increase in 2020 and experienced a drop in sales. I believe that 2022 will be challenging for retail, it is an election year and the choices that the state and the next president make will be essential to keep Brazil with GDP growth or decline. This year, our focus is on inventory management and increasing productivity per employee.”
Today, consumers are hyperconnected, transiting through all channels and benefiting from increased competitiveness and its impact on prices, which improves their purchasing power, so one can enjoy lower prices for the same products. “For retail, the challenge remains to be more and more efficient, even in comparison with global players”, explains the CEO.
“This year, our focus is on inventory management and increasing productivity per employee.”
The tax tangle in the State is a problem, says the executive. “One of the measures that can contribute to the development not only of retail but of the entire economy is tax simplification. Another point to be highlighted is that the State must be more efficient, that is, spend the collected taxes better and respect the spending ceiling so that the hole does not increase. This would bring investments, security and competitiveness to the country.”
LOJAS CEM
The last two years, 2020 and 2021, were very challenging due to the pandemic, the lockdown, the return of inflation and the increase in interest rates, says general supervisor José Domingos Alves. “We started 2022 with inflation still high, plus an increase in interest rates. We believe it will be a better year, we believe in growth. The biggest challenges remain rising prices and consumers’ loss of purchasing power.”
In 2022, Lojas CEM will turn 70 years old and will carry out many internal and external actions, customer promotions, and a mega-competition for employees with important awards. “We expect to open 10 to 12 stores, all in our own buildings, with air conditioning and photovoltaic energy. By the end of 2022, all our stores will have photovoltaic energy”, says José Domingos.
“We expect to open 10 to 12 stores, all in our own buildings, with air conditioning and photovoltaic energy. By the end of 2022, all our stores will have photovoltaic energy”
Channel integration, when done well, benefits retail, says the general supervisor. “However, it is often seen that some companies with multichannel integration end up generating significant losses in the source channel. Today’s consumer is very aware of all this.” In the economy, he defends the tax reform that will bring many gains, in addition to controlling inflation, reducing interest rates and decrease unemployment, generating an increase in consumer income and, consequently, giving him better purchasing power.
LOJAS EDMIL
2021 was a year of stagnation for Lojas Edmil, says president Adaoney Pereira Valias. “In 2022, although we know that it is a year of uncertainties, we are confident and with perspectives that it will be better. Our goal is to grow 10% over last year. Our biggest challenges are recovering purchasing power, creating jobs and controlling inflation, in addition to advancing structural reforms and reducing interest rates.”
The network defined its actions this year. “We are going to expand the physical stores in our area of operation – that is, in the south, in the center-west and in the Zona da Mata of the state of Minas Gerais. We are also going to revitalize four stores, increase online sales, expand our website and service to the entire Minas region, establish a presence in the largest marketplaces and invest in technology and innovations to reach consumers,” says Adaoney.
“We are going to expand the physical stores in our area of operation – that is, in the south, in the center-west and in the Zona da Mata of the state of Minas Gerais. We are also going to revitalize four stores.”
For the president, physical stores will never end. “On the contrary, online sales came to add up. Today, we can serve our customers wherever and whenever they want. In addition, we are very concerned that the virtual store does not compete with the physical one. Our prices are the same on the website and in the store, in addition to each Edmil Store clerk being able to sell through their own online store.”
LOJAS LEBES
The company grew 40% last year compared to 2020 and expects 2022 to be even better, says president Otelmo Drebes. “We made large investments in technology and consolidated new businesses, which will bring good results to the group this year. However, we have some challenges, such as rising inflation and dollar exchange rate and political instability, which can influence consumption.”
In 2022, it will continue its process of expansion and investments in the digitization of the group. “In this way, we will further strengthen Intechlog, our logistics intelligence company, and Lebes Financeira, which makes personal loans possible, in addition to consolidating Lidia Bank, a fintech that offers digital accounts for free throughout the country, including the C classes, D and E”, says Otelmo.
“We made large investments in technology and consolidated new businesses, which will bring good results to the group this year.”
The integration of physical and online sales channels greatly benefits retail. Therefore, the network implements solutions in this sense. What matters is that the customer has a fluid and efficient experience. Retail, however, has been greatly affected by inflation, rising prices and low wages. “The government needs to contain inflation for consumption to grow again. The combination of high interest rates and growing commitment to family income tends to reduce loans in 2022, harming all economic activity. In addition, companies eagerly await the approval of the tax reform. Brazil cannot wait any longer”, says the president.
LOJAS MM
Retail performed very favorably even in the midst of the pandemic, says president and founder Jeroslau Pauliki. “The last two years have been the best for the company, and repeating this will be a huge challenge due to several factors, among them the reduction in purchasing power. But it will be possible with our planning, which is not only for 2022 but until 2028, when MM will complete half a century. The goal is to triple revenues and place the company among the 10 largest sales channels in the country.”
For investing more in technology, he created MM Tech. “We will also invest in the renovation of assets, 1/3 of the stores will be re-inaugurated within the new company standard. Expanding the channels is a priority. We intend to grow 10% in the number of physical stores and 30% in e-commerce, with an advanced website. We will also invest in wholesale and in a financial branch, including personal loans,” says Jeroslau.
“We will also invest in the renovation of assets, 1/3 of the stores will be re-inaugurated within the new company standard.”
In the economy, the president believes that two measures are important: the reduction of the Selic rate and the reduction of the retail payroll tax. “The sector generates jobs in the country, so the payroll exemption, as has already occurred in other areas, should also be done in retail. The company works strongly on the ESG concept, with projects directed to young people and for the animal cause. For almost eight years it has been considered one of the best companies to work for in Brazil.
MERCADO LIVRE
The year 2022 started with a more challenging scenario than that of 2021, says Fernando Yunes, senior vice president in Brazil. “The increase in inflation and interest rates affected the consumption power of families and, consequently, the demand and costs for companies. We follow and believe in the growth of retail sales, which was 14% in 2021, with a projection of reaching 16% this year. Thus, we plan healthier growth rates for our business for 2022, working on developing and improving products and services.”
Over the years, the company has pursued excellence in the buying and selling journey, and this year will be no different. “We have many projects underway, but I want to highlight here the strong investment we are making in machine learning and artificial intelligence. We believe these are key factors for Mercado Livre, both in promoting the best user experience and in generating impact for our business, strengthening our mission in democratizing access to commerce and money,” says Fernando.
“I want to highlight here the strong investment we are making in machine learning and artificial intelligence. We believe these are key factors for Mercado Livre.”
In e-commerce, the senior vice president believes there is still a long way to go, with incredible possibilities. “We will continue to invest in our logistics, working to increasingly offer fast delivery that meets the consumer’s expectation of having more assortment and the best cost with agility. With the pandemic, e-commerce entered once and for all into the routine of Brazilians and changed some consumption habits.”
POLISHOP
President João Apolinário says 2022 will be a challenging year. “Polishop is adapting to the impacts caused by the pandemic and believes in a stability of the company in terms of maintaining jobs and sales. The biggest challenge for retail from now on will be to adapt to the new reality of the consumer and serve them faster and more efficiently.”
This year contemplates the launch of several innovative products in all product categories (which did not happen to the same intensity in 2021). “Launching innovative products has always been a key driver for the company. Innovation extends to all the company’s strategies, especially in the actions related to the digital transformation area,” says the president.
“The biggest challenge for retail, from now on, will be to adapt to the new consumer reality and serve them faster and more efficiently.”
The company has always believed in the integration of all sales channels, says João. “The future is to serve the customer wherever he is. When I built Polishop, in 1999, I already believed in the multichannel business model and the importance of giving the consumer all the consumption possibilities within the channels.” For the executive, the simplification of the fiscal, tax, and labor systems would help develop retail and create a more favorable environment for the entrepreneur to really focus on developing his business.
TELHANORTE TUMELERO
It will be a challenging year for the retail of building materials, says CEO Juliano Ohta. “The home centric movement will not continue, as in 2022 consumers will have to dedicate their investments to segments that have been heavily impacted in recent years, such as travel and leisure. Thus, we will commit ourselves to increasing customer recurrence through our programs and improvements. The scenario requires even more resilience from companies, because it is a presidential election year, which naturally generates economic and political instability in the country.”
Among the main actions this year are the integration of channels with the implementation of purchase by video-call and the improvement of the others. “In customer service, to continue strengthening this front in which the company is already recognized and where it implemented an Artificial Intelligence tool called TINA, which supports more than a thousand salespeople. In expansion, we foresee four new stores under the TJá banner (Telhanorte and Tumelero) and one under the Obra Já banner, in São Paulo”, says Juliano.
“There is no alternative to retail but to work more and more on the integration of channels, as we have a new customer, with different consumption habits.”
For the CEO, it is currently not possible to consider the physical separate from the digital, as consumers have changed their way of shopping, especially in the pandemic. “Online shopping is here to stay, but the customer can start their journey online and end up in the physical store or vice versa. There is no alternative to retail but to work more and more on the integration of channels, as we have a new customer, with different consumption habits.”
VIA
The company is optimistic about 2022, says Abel Ornelas, commercial operations VP. “We see the present economic scenario with attention, but Via is a matured company. The investments should continue in the next Years. The growth potential of the Brazilian retail is huge. E-commerce has penetration of Only 10% while in the US is closer to 20%. I believe it is possible to advance in the penetration and market share.”
In 2022, will invest in innovation, expansion of physical stores and in the integration of online and offline, tells Abel. “We started the year betting in logistics, with the acquisition of CNT logtech, that will accelerate the implementation of our fulfillment and fullcommerce to our sales partners. The differential will be to take over the logistics of these sellers in a holistic way in an integrated manner, that is, regardless of the sales platform – Casas Bahia’s marketplace, Ponto or Extra.com.br or through its own platform – delivery will be made by Via.”
“We started the year betting in logistics, with the acquisition of CNT logtech, that will accelerate the implementation of our fulfillment and fullcommerce to our sales partners.”
The expansion of physical stores will continue, with the integration of sorting offline and online, so sellers can sell the product to partners presents in the company marketplace. Adding to that, the stores will operate as a logistic mini hub improving the time to delivery on for internet purchases. “This integrated strategy is essential for our growth, so one channel supports the other”, says Abel. For him, larger credit offers and the decrease in taxes and interests are fundamental to sustain consumption.
ZEMA
The company expects that 2022 will be very challenging than last year, affirms Romero Zema, CEO. “In 2021, we opened 31 new stores. Certainly, we will not repeat the same number this year. We have high inflation, at a global level, home-default, and we have an election year ahead. In short, all the indicators are unfavorable.”
This year the chain, one of the largest in the country, will prioritize the implementation of its marketplace, searching to expand the product-mix and add to its e-commerce revenue that registered meaningful growth in 2021.” Therefore, along with the Zema card launch and the opening of digital accounts (Zema Finance), we will have a better understanding of clients’ needs, in order to support them even better”, tells the CEO.
“Along with the Zema card launch and the opening of digital accounts (Zema Finance), we will have a better understanding of clients’ needs, in order to support them even better”
Ahead of economic uncertainties, national as well as global, the store chain hopes to have an increase in the second semester, says Romero. “This will be possible if the tax reform is passed, as well as a government temporary measurement that can warm up the spending, for instance, the IPI reduction for some products.”
Source: Revista Eletrolar News – Edição #147
