Latin America is Ready for Omnichannel Retailing Revolution
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- Duane Welch
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1 Latin America is Ready for Omnichannel Retailing Revolution
2 Rise of Anytime, Anywhere Shopper 2
3 Latin America Retailers Dilemma Five years ago, Wal-Mart identified that its biggest competitor in future won t be another brick and mortar retail chain but an online retailers. It also identified Amazon.com as the biggest potential competitor. Going by the sales in holiday season 2013 it seems to be the reality. If the current trend continues Amazon will become second biggest retailer in the world in the next three years. Many retailers in other parts of the world especially emerging economies such as Argentina, Brazil, Latam & India -are facing the same dilemma today that Wal-Mart was facing five years ago. 1.What to do with the challenges from online retailers? 2.Should we start our online operations? 3.How should we manage our online operations? 3
4 4 The strategic challenge is more real today than it was five years ago and getting tougher by the day.
5 Prevalent Trends of the customers use smart phones during the pre-purchase and purchase activities 58 % Location 57% Open Hours 44 % Price Comparison 44 % Offers & Promotions 20 % Purchase 5
6 Smart phones are enabling customer the freedom to choose, compare, bargain and be informed about the product anytime, anywhere. 6
7 Is Latin America Ripe for the Omnichannel Shopping Revolution? 7
8 Latam : The Signs & Trends 30% Internet penetration Internet penetration is fast increasing in the Latam with distribution of notebooks and tabs by governments. 35% are active users of Internet in Latam % Mobile Penetration Latam has 100% mobile penetration and smart phones are rapidly increasing with cheaper options introduction 80% Users below 44 years old The median age of people in Latam is 28 yrs. 80% of the internet users are below age of 44 yrs and 60% below 34 yrs old. 8
9 Latam : The Signs & Trends 24hrs Internet usage / mth The average usage per month in Latam is 24 hours which is equivalent to EU. The avg usage is 33 hrs/ month in Brazil 9 Avg Social Media Usage 9hrs per month The average usage of social media in Latam is 80% higher than global average and 25-40% more than countries in EU and North America 108 Million Unique Visitors to Retail Websites 108 million unique visitors visit retail websites in Latam and it is growing between 15-45% in various Latam countries. 9
10 Market Live Mkt share of online sales of Latam B&M retailers Online retail sales as % of total sales in Latam < 0.5% < 2.0% With Similar Infrastructure online retail sales as % of total sales in Asia- Pacific is > 4.0% 10
11 Time is Right for Latam Retailers to have an Omni-channel Retail Strategy 11
12 Because, Disruptors love Vacuum When the retail market is growing at 4% in Brazil, Mercado Libre is growing at 14%. In Argentina the online platform is growing at 12%. Globally the company is clocking 40% growth rate and speed is even faster in new markets. It is already entered Brazilian market Dec 2012 and is likely to enter Argentina next in Biggest Surprise Given the market conditions in Argentina, Alibaba.com has emerged as the biggest gainer. The visitors to its website has grown 94%. Put is simply they deliver everything at customers home. 12
13 Moving towards an Omni-channel Retail Strategy As the old adage goes, it is not the question of If but When. The rapid expansion broadband and mobile technology is bringing millions of people online and providing everyday solutions and convenience. Retailing is no different and Omni- channel retailing today is fast becoming a necessity rather than a choice for Brick & Mortar (B&M )retailers. Retailing industry in the emerging economies is entering into a new phase and those who able to devise an omni-channel retailing strategy to harness this new wave will profit from it and those who don t will be left behind. 13
14 Trequista Retail Team Trequista is a global management consulting organization. We provide strategy, retail, analytics, supply chain management and base of pyramid consulting to clients in emerging economies such as - Latam and BRICS. To know more about our products and services please contact : Anand Mann Principal Consultant New Delhi, India anand@trequista.com Rodrigo Baluk Director LATAM Buenos Aires, Argentina rodrigo@trequista.com Info@trequista.com 14
15 Consulting Strategy Analytics Retail BRICS Contact us To know more about how Trequista Consulting can help your organization innovate and achieve high performance. Contact us : info@trequista.com To know more about our services, projects and insights you can visit us at 15 Trequista Consulting Strategy Analytics Retail Contact us : info@trequista.com
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