The last couple years in Brazil's economy was presenting a real challenge for all its population, from lower to higher classes the optimism about 'good times to come' is lowering by the month.
Even the joy of the samba people is not resisting this time of recession and political challenges, making 72% of the population worried about losing their job in the next year. [more details]
This survey shows a consumer behavior shift in Brazil that is becoming different from other countries that faced similar recession and/or political crisis in recent history. These peculiarities, if well understood and assessed, could become real opportunities for retail companies.
The 5 main customer behavior shifts in Brazil
1. Let the searching for savings begins
75% of the population are actively looking for sales, making the decision to buy even if they need to wait for a promotion campaign or sales seasoning, expending time and shopping multiple brands to if it represents the best deal. [more details]
2. Brand loyalty? Only poured with sales
3. Watch me now, cause I'm going down
21% of consumers traded down to less expensive products and 60% don't intend to go back even if the tides were turned. For those among A to AA class brands the note is clear: you already lost 12% of your customer base.[more details]
4. Beer and make-up to the help
5% of consumers are trading up, but only in certain categories like beers (15%) and beauty and cosmetics (9%). They stated that this categories cheaper is directly related to lower quality.
5. Atacarejo is key.
Consumers are changing channels to discounts chains and cash-a-carry formats, the 'Atacarejo' (combining Retail and Wholesale), One bad news here (for me and my peers) is that online commerce is gaining too much traction as channel in the present context.
Some ideas to start...
Clear understand of your customer demographics and segmentation, reaching them where they are more sensitive. Coupons, sales offerings, added-value products and ad campaigns need to be aimed correctly, if not, they could end in losing customers rather than just company budget.
Analytics investments is key, as stated above, now its the proper time to hire some good analytics professional and dig deeper on very granular data to reach for that 20% singular segment of customer that could end up valuing more than the 80% of the total 'sales looking pumas' around in this jungle days of recession.
Full stack of products and prices, being clear in your value proposition and stating a transparent price structure position could be a winner in presenting a trade-off in quality and price that could reach down and up-traders in their best intentions, not hurting any brand image and making customer identification.
Eficiency, Efiency, Efiency. This is such a cliche theme that needles to say, specially in times like these, efiency will bring not just low cost of operations that also improve the quality of our work making more valuable products and services becoming a loop of positive events that will drive excellence in results and further better brand positioning.
Source: McKinsey Global Consumer Sentiment Survey 2016.
Source: McKinsey Global Consumer Sentiment Survey 2016.
