An Interview: Lily Varon And The E-commerce Brasil Org On — You Guessed It — eCommerce In Brazil

Lily Varon
Analyst
July 18, 2017

An interview I did with E-commerce Brasil published online today in Portuguese. I’ve been getting requests for it in English so I thought I’d post it here. Happy reading!

1. “The State of Retail eCommerce in Brazil” series gave us an interesting look at eCommerce in Brazil during a difficult economic situation in the country. What are your insights about Brazilian retailers in this study?

Online business leaders are feeling the pain of the recession. Sixty percent of online retailers we surveyed said slowing consumer spending with be a significant barrier to their eCommerce growth over the next 12 months. And more than half say the operational constraints of keeping up with constant regulatory change is an obstacle to their eCommerce growth. But eCommerce in Brazil is still growing through difficult economic times. Sixty-eight percent of retailers we surveyed said their eCommerce business grew from 2015 to 2016.

In addition to revenue growth, a look at other retailer key performance indicators (KPIs) also reveal some interesting insights into the state of eCommerce in Brazil today. Overall site conversion rate has stabilized and cart abandonment rates have lowered. These positive KPIs notwithstanding, Brazilian digital commerce professionals have to work even harder to make those numbers. As eCommerce matures in Brazil, local retailers that sell online are wrestling with many of the same issues as their North American counterparts, including decreasing average order values, lower repeat customer rates and growing return rates.

2. Social Media is called out specifically in the study. Considering that Brazilian consumers are spending more and more time browsing through social networks, must retailers pay attention to social media and build more customer acquisition strategies for these audiences?

Yes, consumers in Brazil like to interact with brands via social media. Over 60% of online adults in metropolitan Brazil share content that brands or companies have posted on social media on a weekly basis or more frequently, compared with just 29% of US online adults. It’s only increased in importance as a customer acquisition channel. But customer acquisition isn’t the only priority. To stop future marketing costs from spiraling up, Brazilian retailers need to invest in tactics that cultivate loyal customers and encourage them to increase their visits, sales, and spend. It’s time to dial up customer retention tactics to encourage repeat shopping — customer acquisition alone won’t build a sustained business. We know from KPIs data that repeat customers spend more. So in addition to a solid Social Media strategy, I would encourage retailers to invest in customer intelligence solutions to better understand consumers’ shopping habits and turn those insights into to analyze how to be true-longer term loyalty.

3. Mobile commerce is a great challenge in Brazil. Even though there’s significant sales potential, there are still business that haven’t started to invest in mobile technology and a mobile-first culture. Should these eCommerce retailers be worried about being left behind by the competition in the near-term?

As in many markets around the world, Brazil’s shoppers increasingly use mobile devices as part of their shopping journey. In 2016, Brazil’s online retailers saw an average of 16% of their online sales come from smartphones. But mobile strategy maturity varies in Brazil. Half of the retailers we surveyed either are in the early stages of developing a strategy – or don’t have a mobile strategy at all. Retailers need to be wary of creating a mobile offering that just shrinks the PC-based web experience. As Forrester has written about quite a bit, mobile isn’t just another channel, mobile is an opportunity to enhance existing offerings while creating new ones that eliminate customer pain points across channels.

4. A lot of retailers in Brazil want to be on marketplaces. Is this also a global trend in your opinion? Could marketplaces be a good option for small businesses to expand online sales?

Marketplaces are a global eCommerce phenomenon. There are big global ones like Amazon and eBay and regional ones like Tmall and MercadoLivre. There are specialized marketplaces for particular product categories and retailer-operated marketplaces on their own sites. Brands considering launching on a marketplace should be aware of the benefits and drawbacks of that approach. A major benefit is that marketplaces provide brands with instant access to an established base of users that could maybe take years and lots of marketing dollars to establish on their own. And these marketplaces also often provide a series of offerings in areas such as payments and customer service that brands can take advantage of when they launch their stores. But marketplaces come with challenges. Many marketplaces are known as a destination for bargain hunters to discounts are commonplace. Additionally, in an attempt to ensure uniformity across brand stores, some marketplaces offer fairly rigid templates that don’t give brands much creative license to develop their storefronts. And finally, many marketplaces don’t share as much data on online shoppers’ purchase behavior as businesses would like to about customer purchase paths and browsing behaviors.

Categories

Related Posts