Marketing and technology strategies open up opportunities to overcome the challenges faced by the main brands in the segment
Over the years, retail has consolidated itself as an important sector for the development of Brazil, showing consistent growth and favorable growth in the country’s GDP (Gross Domestic Product).
From food and clothing to automobiles and electronics, the segment has consolidated itself as one of the engines of the world economy. Carla Abdalla, professor of the management course at Faap (Fundao Armando Alvares Penteado), explains that a retail company has as its main characteristic a business model aimed at selling to the final consumer, that is, B2C – business to consumer. She highlights an important point: the retail sector has become more complex over time, with increasingly fierce competition.
In addition to this scenario, there are changes generated by technology. With the development of e-commerce, several physical retail chains opened online sales channels (e-commerce sites, sales applications). On the other hand, many companies that were born in the digital environment have also ventured into the physical environment, in search of getting closer to the consumer, creating differentiated consumption experiences. They also seek to win over a consumer who still resists online shopping, either because of distrust or because of having restricted access to the internet.
According to the study The role of retail in the Brazilian economy, carried out annually by SBVC (Sociedade Brasileira de Varejo e Consumo), restricted retail (consumer goods, except building materials and cars) closed the year 2022 with a nominal expansion of 7 .7%, moving BRL 2.14 trillion, representing 21.6% of GDP.
Expanded retail (which includes automobiles and construction materials) advanced 8.4% last year, to R$ 2.61 trillion, and corresponds to 26.4% of GDP. Even though it is recovering from the effects of the pandemic on consumer buying habits, retail continues to represent a significant portion of GDP, contributing as one of the largest employers in the country.
According to the study, retailers hired more people than they fired in 2021. As a result, there was a reduction in the unemployment rate measured by the IBGE from 13.5% to 11.1%, the lowest level since 2016.
The retail sector is responsible for ensuring the livelihood of a quarter of workers with formal jobs, which is equivalent to 8.5 million people.
signs of the crisis
Americanas, Marisa, Tok&Stok, Forever 21, Riachuelo, Renner, Amaro and Magazine Luiza are the stores that showed instability in the market and even closed their doors across the country.
According to a survey by Serasa Experian, in the first three months of 2023 alone, the number of bankruptcy filings rose 44% compared to the same period last year. Judicial recoveries, in the same comparison, had an increase of 37.6%.
The bookstore sector is one of the main affected by this new scenario, taking as an example the recent closure of Livraria Cultura. Contrary to what is imagined, the extinction of bookstores in Brazil is not due to the fact that Brazilians do not read.
A survey by Snel (National Union of Book Editors) in partnership with Nielsen Bookscan Brasil shows that in 2021 there was a 29.3% growth in the volume of books sold across the country, compared to the year 2020. In relation to the revenue generated, there was a 29.2% increase in revenue in the same period. In 2022, it presented a high variation in sales volume: 19.56% greater than in 2021.
What was reflected in the drop in face-to-face book sales were the new buying habits of readers, especially after the strengthening of online shopping – especially on Amazon.
Amazon, at first, was held responsible, since it operated with a lower fixed cost, since it did not have physical stores, more efficient logistics, delivering books in a shorter period than competitors, competitive prices and a very large variety in the market. product mix. But, thinking about these characteristics, it is difficult to blame a company that is new to the market for the failure of the others, says Carla Abdalla, from Faap.
The professor leaves a question: could it be that Amazon’s fault or the market has changed and these companies insisted on not adapting the business model to the change, failing to deliver value to their target consumer?
Livraria da Vila, in So Paulo, for example, has maintained healthy growth even with Amazon in Brazil, focusing on smaller physical stores, both on the street and in the mall, focused on selling books, with attendants who help the consumer. in the choice of products, pleasant store environment, usually integrated with cafes and snack bars, generating an experience for the consumer quite different from buying a book online, she says.
American stores
Present in many cities in Brazil, the billionaire gap in the accounts of the Americanas took the market by surprise. The company registered an accounting inconsistency of around R$ 20 billion, in addition to debts.
The total, almost BRL 50 billion, is three times greater than his net worth. The news surfaced in January of this year. This crisis scenario is exposing the weaknesses of all companies, we have the situation of Americanas as an example – numbers that were previously known by few people, became public and shocked the retail market, says Ricardo Pastore, professor and coordinator of the research center. ESPM Retail.
With the repercussions, Americanas presented a judicial recovery plan in March. It is clear that the Americanas case will continue to reverberate. No sa Americanas is going through a delicate moment. Another recent situation involves Tok&Stok, considered one of the largest furniture retail chains in Brazil, which has an estimated debt of R$600 million.
The chain, which had 67 stores in 21 states and the Federal District, began to close establishments to reduce costs and announced discounts of up to 50% in some units.
Read the full story in the July 10, 2023 issue of propmark
