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What: CommerceNext has published the results of a survey of 100 e-commerce decision-makers, meant to explore similarities and differences in the priorities of traditional and digital-first DTC brands.
Why it matters: The report is meant to be a benchmark that helps marketers evaluate their priorities in terms of how to distribute budget among different technologies and objectives.

 

E-commerce is unpredictable; it forces marketers to be on the lookout for what’s coming next and reacting if only a little bit late can turn out to be fatal. In order to be more ready, decision-makers have to decide what matters more in every step of their strategy, which means having to prioritize investments and objectives. With these challenges in mind, CommerceNext conducted a survey of 100 top marketing executives in traditional and digital-first direct-to-consumer brands.

The objective was to provide a useful benchmark for online retailers to measure their priorities and decide how to distribute budget in the most convenient way. According to the results, even though both traditional and digital-first online retailers point to an increase in marketing budget, digital-first brands are spending way more while also diversifying their strategies. Below are the key insights from the study, titled How Leading Retailers and DTC Brands Are Investing in Digital.

 

Which Investments Did Work in 2018?

In order to compete, marketers need to be quick to decide which investments can help them reach their objectives. According to the study, 65% of respondents said their 2019 e-commerce marketing budget increased over the previous year, while only 10% of marketers are reducing their budget. In 2018, the top marketing investment priorities were acquisition marketing (81%), retention and loyalty marketing (43%) and promotions (32%).

When asked about the results of those investments, acquisition marketing had the highest level of satisfaction rating: 53% of respondents said acquisition marketing met expectations in 2018, and 24% said it exceeded expectations. On the contrary, 52% of respondents said unified customer data (e.g. a single view of the customer) performed below their expectations. Almost the same number had similar levels of dissatisfaction in personalization investments (51%).

Source: CommerceNext

 

What Are the Priorities of Digital-First and Traditional Retailers?

According to the report, consumers have more than doubled the amount of time they spend on DTC brands’ websites over the last two years. Even though all the companies in the study have increased their e-commerce marketing budgets, digital-first DTC brands are spending more: 78% indicated that their 2019 budget is higher than the one they had in 2018, while 60% of traditional retailers said the same.

Because DTC brands are based on data-driven decisions and customer-centric operations, they are growing and evolving at an accelerated pace. As stated in the report: “fueled by venture capital investment, these brands have focused on growth vs profitability.” Therefore, the most significant challenge for this group of brands is “achieving profitability at scale”, with “Managing tech integrations” coming in second, with 33% of DTC brands identifying it as a barrier. This is a side-by-side comparison of what each group considers to be the most significant barriers, extracted from the study:

Source: CommerceNext

How to Make the Best of the 2019 Holiday Season

According to the NRF, the 2018 holiday retail season exceeded expectations. Over 165 million Americans reportedly shopped either in stores or online from Thanksgiving Day through Cyber Monday 2018, and online purchasing, in particular, experienced a 19% increase compared to the previous year. The NRF has forecasted that 2019 retail sales will increase by 3.8% compared to 2018, and the online sales growth rate will increase between 10% to 12%.

DTC brands are increasing their budgets at a higher rate than traditional retailers and spreading that budget more evenly. For example, digital-first DTC brands are increasing their budgets equally (70%) between acquisition marketing and retention/loyalty marketing. On the other hand, traditional retailers are emphasizing acquisition marketing, with 77% of respondents increasing their acquisition budget compared to 64% of traditional retailers increasing their retention budget.

 

 

All images by CommerceNext.

A summary of the most relevant consumer insight research in the U.S. and U.S. Hispanic markets. If you’re trying to keep up with the latest happenings, this is your one-stop shop.

 

  • Accenture’s 13th Annual Holiday Shopping Survey of 1,500 U.S. consumers has found that Americans expect to spend $637 on holiday shopping this year, on average, with approximately six in seven respondents planning to spend either the same (57%) or more (28%) than they did last year. Consumers are expected to do half their purchases in physical stores, with lower prices cited as the top (82%) factor that would tempt them to make an in-store purchase. 

 

  • For the first time, consumers in the U.S. might do more of their holiday shopping online than in physical stores, according to a new survey. In its annual Holiday Outlook, PricewaterhouseCoopers LLP found that 54% of respondents will opt for the convenience of their smartphones, laptops, and PCs, and even in-home voice assistants, compared to 50% last year.

 

  • CGS has announced findings from its 2019 CGS Customer Service Chatbots & Channels Survey. CGS surveyed more than 1,000 Americans and found that 86% of consumers prefer to interact with a human agent. Moreover, 71% of respondents said they would be less likely to use a brand if it didn’t have human customer service representatives available. Only 30% believe that chatbots and virtual assistants make it easier to address customer service issues. However, for respondents under 35, confidence in AI-based solutions reached 43%. 

 

  • Recent research by Deloitte shows that consumers’ tolerance to advertising varies according to the type of shows they like. A new survey which polled 2,000 U.S. found respondents whose most-watched type of show was talk shows had the highest tolerance for advertising  (11.6 minutes per hour), and the ones who prefer scripted comedies or dramas have the lowest  (7.2 minutes).

 

  • According to the National Retail Federation’s annual survey of 7,400 U.S. consumers, 68% of Americans said they plan to celebrate Halloween. Sixty-nine percent declared they will hand out candy, while 49% will decorate their homes and 47% will dress in costume. In total, they are expected to spend US $2.6 billion on Halloween candy, about $25 dollars per person. 

 

  • A recent CodeBroker survey of over 1,100 U.S. consumers on coupon and offer personalization found that sending custom offers to past consumers is a good opportunity for brands. The results show that 73% of respondents answered with a definite yes to the question, “Do you prefer to shop at stores that send you custom discount offers based on your purchase history?”.

 

What: Retailers scramble behind Amazon and MercadoLibre to capture their share of expanding e-commerce in Latin America. This happens despite difficult payment and delivery challenges.
Why it matters: Experts predict e-commerce trends will grow by 19% in the next five years. They see it rising well above the global average of 11%. The lack of brick-and-mortar retail outlets in Latin America actually plays into the hand of e-commerce retailers. That’s because it allows them to offer products to consumers outside of major cities who don’t have many shopping options.

E-Commerce Trends Heating Up

E-commerce trends in Latin America provide no place for the timid. The challenges are well-known. Experts say they include lack of infrastructure, consumers without credit cards or bank accounts, high rates of online payment fraud, and obstacles to delivering product—to name just a few.

But the barriers to success don’t stop leading players. For example, MercadoLibre is diving into the e-commerce market and thriving.

One expert remarks the challenges are “daunting.” But competitors like Linio are finding ways to outperform. They chase what Linio’s General Director Olivier Sieuzac says is a “massive opportunity” in expected e-commerce growth in the region.

Linio has learned it had to expand its online business model. That means beyond just selling product. The strategy now includes things like creating its own delivery fleet. Linio also sells its hard-earned expertise to brands like Aeromexico who create their own online retailing presence.

To succeed in Mexico, Linio built partnerships with VISA to prevent credit card fraud. Consequently, it also joined arms with third-party payment channels. They include the convenience store chain Oxxo. Linio aims to provide the unbanked with cash-payment options.

Mexico, according to Sieuzac, offers the “worst of both worlds.” Mexico suffers high levels of online payment fraud and a low level of cooperation from banks.

As a result, Linio developed a proprietary algorithm with VISA as a response to reduce credit card fraud. Consequently, Linio also now offers its own credit card with a loyalty program. The loyalty program awards cash back on purchases.

Linio also created its own fleet in Mexico to handle the delivery of over-sized items like refrigerators and other home appliances.

Infrastructure, payment obstacles

Lack of infrastructure in Latin America makes delivering product a particularly difficult part of the e-commerce business.

Logistics and related issues amount to 15 percent of the cost of what’s sold online—well above other regions, according to Miriam Dowd, Marketing Manager at FOCUSECONOMICS.

Merchants experience the impact of “limited” access to credit card-based payment methods. Banks often don’t allow debit cards to be used for online payments.

E-commerce in Latin America faces many challenges, the most daunting of which are logistics, traffic, and infrastructure. Regulations and rules vary among countries. Merchants have and limited access to secure, credit-card based payment methods,” Dowd explains.

Online sales are expected to grow by 19% in the next five years. As a result, that is well above the global average of 11%. They are foreseen to double in value to $118 billion in 2021.

But on the positive side of the ledger, experts say market penetration is low compared to other regions. As a result, that represents lots of opportunity. Consequently, the market also offers higher growth rates.

“Online sales are expected to grow 19% in the next five years – well above the global average of 11%. As a result, they will double in value to $118 billion in 2021. Consequently, two of the three fastest-growing eCommerce markets in the world are in Latin America. They are Colombia and Argentina,” Dowd said in an email to Portada.

E-commerce trends forecaster eMarketer found even with this expected high growth rate, nearly 75 percent of the market of 650 million consumers expected to shop online is untapped.

E-commerce trends working for e-retailers

MercadoLibre boasts status as the undisputed leader in Latin America. Its huge geographic footprint and logistics expertise “have helped it to hold the lead,” Dowd said.

Amazon leverages its international recognition to become a leading player in Latin America.

And for Linio, expanding its business model and offering consumers a trusted, predictable and “formal” online shopping experience proves critical to its success, according to General Director Sieuzac.

Linio seeks to set itself apart from other online retailers by rigorously vetting its product providers to make sure what they offer Linio’s customers meets certain standards.

Linio offers free returns in its strategy of building customers’ confidence.

“We’re not leaving customers alone in a face-to-face situation with the seller,” Sieuzac said.

Linio’s strategy provides its online expertise to brands. They then create their own online shopping sites, a key component of Linio’s competitiveness.

As a result, Linio entered into a partnership to build and operate Aeromexico’s Club Premier online shopping experience.

Mexico offers the worst of both worlds: high levels of online payment fraud and a low level of cooperation from banks.

Linio also partnered with the micro-financing company ConCredito. ConCredito provides a huge presence in rural zones not necessarily within Linio’s geographic footprint.

Linio publishes its catalog of products on ConCredito’s website “Creditienda.” Linio spokesperson Paulina Maza said the company supports the ConCredito e-commerce site with specific promotion campaigns. They include digital marketing, logistics, fast delivery of products, and returns.

What lies ahead

The lack of brick and mortar retail outlets in Latin America actually plays into the hand of e-commerce retailers. That’s because they can offer products to consumers outside of major cities where consumers don’t have many shopping options. Sieuzac told Portada, “It’s a massive opportunity. You have people that simply don’t have access to products, even from a normal shop.”

A “key component” of e-commerce growth in Latin America proves to be shopping online with a mobile phone. As a result, a report by yStats.coMobile commerce reveals experts expect it to increase at a faster rate than e-commerce.

Brazil offers the largest consumer e-commerce market in Latin America. The report found experts predict Colombia to show a 20 percent growth rate through 2021.

A summary of the report reveals experts predict: “Rising internet and smartphone penetration rates, greater online payment security and development of MCommerce to contribute to the growth of online retail sales.”

What: Ecommerce marketing strategy is revealed by retailers Walmart and Soriana. It shows how they’re capturing the e-commerce home delivery grocery market in Mexico with alternative digital payment strategies.
Why it matters: Fear of fraud stops many Mexico consumers from making online purchases with a credit card. As a result, Walmart and Soriana are on it. Consequently, they’re deploying cash on delivery, branded digital cash cards, mobile phone loyalty programs, and PayPal options.

The race is on as grocers deploy ecommerce marketing strategy in Mexico. Grocery and general merchandise retailer Walmart has taken the lead. But in Mexico, its competitors, including Soriana, are racing to build their online-delivery businesses.

How customers pay for their online purchases could make all the difference.

High credit card commissions and fear of fraud pose a significant barrier to online sales in Mexico. Digital purchases make up only 3 percent of all consumer goods sales nationwide. As a result, that’s way below the average seen in other countries, according to branding expert Vilma Vale-Brennan. She is deputy general manager of Vale Network in Mexico.

The new President of Mexico, Andres Manuel Lopez Obrador, has promised to get banks to lower credit card commissions. But grocery retailers like Walmart don’t have time to lose.

Ecommerce Marketing Strategy with Digital Payment App

Last year, Walmart launched its own digital application. As a result, it allows customers to pay for goods at stores with the Walmart digital application “Cashi.”

After downloading the app to their mobile phones, customers can recharge it with cash at any Walmart-owned store. It’s a fast and easy way to convert cash into a secure digital payment option. As a result, customers use it for purchases at Walmart, Superama, Sam’s Club, and Bodega Aurrera stores.

Cashi can be used to pay electric bills and services including Netflix, Spotify, and Uber.

The idea here is to make purchasing with Walmart easier, and to give people more options.

But perhaps more importantly, Walmart tells Portada it expects to extend the Cashi digital payment system later this year to allow its online customers to use Cashi for online grocery purchases, according to Gabriela Buenrostro, assistant director of corporate communications. “The idea here is to make purchasing with Walmart easier, and to give people more options,” she said.

Walmart’s ecommerce marketing strategy outpaces the online market with 4.5 million e-commerce shoppers in Mexico, followed by grocers Soriana at 1.1 million, according to a study by the American media measurement and analytics company Comscore as reported by Portada.

Cash, PayPal Options Offered

Walmart offers online customers the option to use PayPal, and Soriana added the PayPal payment option to its online shopping site this year.

Soriana also allows its online customers to pay cash to the home delivery person, or use their credit card on the delivery person’s portable card reader, Director of Electronic Commerce Rafael Castelltort told Portada.

Most of Soriana’s online grocery customers shop online using Soriana’s branded mobile application on their cell phones. A Soriana loyalty card program has more than 9,000 users, and to build loyalty even more, Soriana, deploying its own ecommerce marketing strategy launched its own mobile phone service “Soriana Movil” in 2017, which earns users loyalty points that can be exchanged for free products, Castelltort said.

The trends are very clear. Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.

Soriana’s decision to launch its own mobile phone service in Mexico might appear tangential to an effort to build online purchases, however, it could be spot-on in terms of getting more online shoppers.

“The trends are very clear,” comScore’s Alejandra Ibarra, manager of comScore’s Latin America Services, told Portada when asked about ecommerce marketing strategies among grocers in Mexico. “Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.”

And as time goes by, mobile applications are becoming more and more important for grocery ecommerce market leaders like Soriana and Walmart.

Just last year, Walmart announced its acquisition of the online marketplace Cornershop. Users download the Cornershop application to make online purchases using their mobile phones at supermarkets, specialty food stores and pharmacies in Mexico and Chile, according to Forbes.

“The Cornershop acquisition by Walmart shows the focus that applications have for the company and the performance it must deliver to maintain its leadership,” Ibarra told Portada.

What: Ecommerce marketing strategy is revealed by retailers Walmart and Soriana. It shows how they’re capturing the e-commerce home delivery grocery market in Mexico with alternative digital payment strategies.
Why it matters: Fear of fraud stops many Mexico consumers from making online purchases with a credit card. As a result, Walmart and Soriana are on it. Consequently, they’re deploying cash on delivery, branded digital cash cards, mobile phone loyalty programs, and PayPal options.

The race is on as grocers deploy ecommerce marketing strategy in Mexico. Grocery and general merchandise retailer Walmart has taken the lead. But in Mexico, its competitors, including Soriana, are racing to build their online-delivery businesses.

How customers pay for their online purchases could make all the difference.

High credit card commissions and fear of fraud pose a significant barrier to online sales in Mexico. Digital purchases make up only 3 percent of all consumer goods sales nationwide. As a result, that’s way below the average seen in other countries, according to branding expert Vilma Vale-Brennan. She is deputy general manager of Vale Network in Mexico.

The new President of Mexico, Andres Manuel Lopez Obrador, has promised to get banks to lower credit card commissions. But grocery retailers like Walmart don’t have time to lose.

Ecommerce Marketing Strategy with Digital Payment App

Last year, Walmart launched its own digital application. As a result, it allows customers to pay for goods at stores with the Walmart digital application “Cashi.”

After downloading the app to their mobile phones, customers can recharge it with cash at any Walmart-owned store. It’s a fast and easy way to convert cash into a secure digital payment option. As a result, customers use it for purchases at Walmart, Superama, Sam’s Club, and Bodega Aurrera stores.

Cashi can be used to pay electric bills and services including Netflix, Spotify, and Uber.

The idea here is to make purchasing with Walmart easier, and to give people more options.

But perhaps more importantly, Walmart tells Portada it expects to extend the Cashi digital payment system later this year to allow its online customers to use Cashi for online grocery purchases, according to Gabriela Buenrostro, assistant director of corporate communications. “The idea here is to make purchasing with Walmart easier, and to give people more options,” she said.

Walmart’s ecommerce marketing strategy outpaces the online market with 4.5 million e-commerce shoppers in Mexico, followed by grocers Soriana at 1.1 million, according to a study by the American media measurement and analytics company Comscore as reported by Portada.

Cash, PayPal Options Offered

Walmart offers online customers the option to use PayPal, and Soriana added the PayPal payment option to its online shopping site this year.

Soriana also allows its online customers to pay cash to the home delivery person, or use their credit card on the delivery person’s portable card reader, Director of Electronic Commerce Rafael Castelltort told Portada.

Most of Soriana’s online grocery customers shop online using Soriana’s branded mobile application on their cell phones. A Soriana loyalty card program has more than 9,000 users, and to build loyalty even more, Soriana, deploying its own ecommerce marketing strategy launched its own mobile phone service “Soriana Movil” in 2017, which earns users loyalty points that can be exchanged for free products, Castelltort said.

The trends are very clear. Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.

Soriana’s decision to launch its own mobile phone service in Mexico might appear tangential to an effort to build online purchases, however, it could be spot-on in terms of getting more online shoppers.

“The trends are very clear,” comScore’s Alejandra Ibarra, manager of comScore’s Latin America Services, told Portada when asked about ecommerce marketing strategies among grocers in Mexico. “Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.”

And as time goes by, mobile applications are becoming more and more important for grocery ecommerce market leaders like Soriana and Walmart.

Just last year, Walmart announced its acquisition of the online marketplace Cornershop. Users download the Cornershop application to make online purchases using their mobile phones at supermarkets, specialty food stores and pharmacies in Mexico and Chile, according to Forbes.

“The Cornershop acquisition by Walmart shows the focus that applications have for the company and the performance it must deliver to maintain its leadership,” Ibarra told Portada.

What: IAB Mexico has presented the results of its 11º Study of Media and Device Consumption, based on a survey of 1297 Mexican internet users.
Why it matters: The media landscape has evolved a great deal in the last 10 years; advertisers need to understand the different types of internet users to be able to cater to their needs in an effective way.

 

In a private event held in Mexico City this week, IAB Mexico presented the results of its 11º Study of Media and Device Consumption, developed by Kantar with sponsorship from Televisa Digital. In this edition, the study explores the habits of Mexican internet users and their relationship with digital advertising by dividing their behavior into four areas that correspond to the different devices, platforms, and activities related to the online world: digital, social, entertainment, and e-commerce.

In order to find out how consumers’ online habits have changed in the last 10 years, 1297 people between the ages of 13 and 70 were surveyed (49% women; 51% men), and their answers revealed that the percentage of connected population in Mexico grew from 30% to 67% (about 75.8 million internet users).

 

Digital Devices Continue to Rise

According to the study, there’ll be about 29 billion connected devices by 2022. Today, 90% of Mexican internet users own a smartphone, and 7 in every 10 declare owning a complementary device such as Smart TVs and speakers, wearables, streaming devices, etc. As explained in the report, “accurate understanding of all the different types of internet users provides the industry with tools to segment them according to their needs.

 

Social Media: Your New Best Friend?

A big majority (84%) of Mexican internet said they use an average of 4 different social media every day, and even though most of the social networks that were predominantly used 10 years ago have disappeared, two of them (Facebook and Twitter) are still on the top three.

As the study shows, users go to social media both to consume (86%) and to create content (94%), and 61% say they follow their favorite brands in order to keep themselves informed about news, discounts, and other consumers’ opinions. “In the last ten years, social media have evolved from a social communication space to a key ally for brands,” says the report.

 

Online Streaming Gives Consumers Freedom to Choose

From music to TV and videogames, 83% of surveyed respondents declared having access to online streaming services. The video platforms with more sustained growth are Netflix, Claro Video and Prime Video; Spotify leads the music category; and Xbox and Twitch are the videogame streamers with more users.

According to the report, advertisers have an opportunity to gain consumers’ attention provided that they take into account what really matters to them. Only 18% of viewers say they “always pay attention” to online ads, and the main reasons why the remaining respondents pay attention “sometimes” or “never” is that ads are simply not attractive, or that they feel their experience is being interrupted in an annoying way.

 

A Majority of Respondents Have Tried E-Commerce

Even though the growth has been slow, the study reports that e-commerce is gaining relevance among Mexican internet users, as 67% declares having completed an online purchase recently. Among the main reasons why they decided to buy online, they said “there was a special offer”, “it was quick and easy”, or “it was cheaper”. One of the things that have favored this growth, as said in the report, is the increase of connectivity both in and out of the store that allows consumers to compare prices. In average, consumers completed 3.5 e-commerce activities, with the top 5 categories being bank transactions, payment of services, clothes, electronic devices, and music.

However, it is still difficult to get the remaining 33% to make purchases online. Among those who declared not completing any transactions online recently, the main reasons were not having a credit card (42%), distrust when asked to share personal information (36%), and a wish to see the product before buying it (29%).

 

All images except feature image by Freepik.

Feature image by IAB Mexico / Kantar 

What: The market for online grocery sales and home delivery is in its infancy in Mexico but offers huge potential given the 65 million Mexicans who now have access to the internet.
Why it matters: Grocery and general merchandise retailer Walmart has 4.5 million e-commerce customers in Mexico, and its competitors, like E-commerce Director Rafael Castelltort at Soriana, tell Portada how they are racing to sell groceries online, building new digital infrastructure, deploying machine learning, creating alternatives to credit card payments and launching websites highly customized for e-commerce and home deliveries.

Mexico may offer the perfect storm for selling groceries online. A rapidly growing urban middle class, internet penetration that now reaches 65 million, and grocery retail chains building sophisticated online payment and delivery infrastructures combine to make a bright future with huge potential, according to analysts.

“Supermarket chains in Mexico can grow tremendously in the future,” concludes a new study by the American media measurement and analytics company comScore. “The sector has huge potential for growth.”

Walmart leads the online grocery market with 4.5 million ecommerce shoppers in Mexico. Grocery chain Soriana comes next at 1.1 million, followed by Superama with 992,000. But while most Mexicans shop online using their mobile phones, online grocery shoppers still tend to use PCs more than any other device.

Many retailers now offer their own mobile applications, but the majority of online grocery shoppers in Mexico use a cell phone and rely on the cell phone’s internet browser instead of the retailer’s mobile application.

“Consumption by applications is still very incipient,” the study notes. Walmart’s online shoppers use its application only 25% of the time, while Soriana shoppers use Soriana’s application 15% of the time, according to the study shared by comScore with Portada.

Surprisingly, when it comes to time spent shopping online for groceries, the PC is king, with the exception of Walmart and Chedraui. More ecommerce shoppers at Walmart and Chedraui use their mobile devices than the PC.


Source: comScore

In Search of Younger Online Grocery Shoppers

All of the grocery chains chasing the ecommerce market face the challenge of winning over younger shoppers.

Adults over the age of 35 are more likely to shop for food online than any other age group. La Comer, however, has the largest group of online shoppers ages 25 to 34, compared to all grocery retailers, the comScore study found.

Women make up the majority of online grocery shoppers at Soriana, La Comer and Superama, while men dominate at Walmart, Costco and Chedraui.

The majority of our clients are women who value their time and value home delivery.

“The majority of our clients are women who value their time and value home delivery,” Rafael Castelltort, Director of Electronic Commerce at Soriana, tells Portada.

E-commerce shoppers have the option to pick their orders up at the stores, but home delivery is more popular.

Excellence in service is a pillar of Soriana’s strategy for winning over e-commerce customers. “We focus on the customer, deliver what they request, and in the time promised,” says Castelltort.

Soriana does not offer lower prices online than in stores to win over new ecommerce customers. The average weekly order is between 50-60 items and customers can pay for the delivery using PayPal, by paying cash to the delivery person or swiping a credit card on a mobile terminal the delivery person brings with the order. Customers don’t have to pay online with a credit card to make a purchase.

Service, Service, Service

A totally seamless purchasing process, from order to payment and delivery is Walmart’s mantra for winning the battle of online sales.

“We understand that customers aren’t only looking to save money, but are also looking to save time,” Roberto Villalobos, Director of Web Operations at Walmart and Superama tells Portada.

“We are constantly improving the online shopping experience for our customers and have implemented significant changes for grocery shopping on our internet site, including our own mobile application.”

We understand that customers aren’t only looking to save money, but are also looking to save time.

Walmart’s mobile application received the Best App award at eShow Mexico last year, Villalobos notes.

Challenges Ahead

Online grocery revenue in the U.S. reached $17.5 billion in 2018 and is expected to reach $30 billion by 2021.

In Mexico, however, the comScore study found uneven growth over the past few years, and a slight downward trend for 2019. Long delivery times may explain both factors, the study said.

And while the online grocery sale market has “huge potential” in Mexico, the comScore study finds significant challenges remain on the horizon, including the need to incorporate machine learning, big data, and logistics which have proven key factors for success in other parts of the world.

“With sophisticated technology and offers oriented to the user, Mexican grocery chains can grow greatly in the future,” the comScore study concludes.

In Part Two of our series on e-commerce grocery sales in Mexico, we explore specific marketing innovation, payment, and technology strategies being used to win the battle to increase market share.

What: We looked at the top 15 online retail sites visited by Hispanic shoppers in the US in November of 2018 and how they scored in numbers of visitors.
Why it matters: Best Buy and Kohl’s benefited handsomely from increased visits by Hispanics to their websites in the lead up to the 2018 holiday shopping season. Both saw a nearly 40% increase in visitors in November compared to the previous month. While maintaining its first-place ranking in the top 15 most visited sites by Hispanics in the US in November, Amazon nonetheless saw a dip of 2% in its overall share of total visits compared to the month of October.

 

Number of Hispanic visitors to the Top 15 e-commerce sites in the US, November 2018
Total Audience, Home and Work, PC/Laptop 154,176
Site Total Unique Visitors*
Amazon Sites 28,333
Walmart 18,602
eBay 16,004
Apple.com Worldwide Sites 11,959
Target Corporation 10,433
Samsung Group 9,701
WISH.COM 8,611
Best Buy Sites 8,485
Kohl’s Corporation 7,541
The Home Depot, Inc. 6,697
ETSY.com 6,462
Ticketmaster 6,342
Macy’s Inc. 5,911
Wayfair 4,913
Lowes.com 4,182

Source: comScore *Numbers reported as shown

Kohl’s and Best Buy saw significant increases in the number of Hispanic visitors to their sites in the month of November, 2018 compared to October. Visits to both sites by Hispanics surged by nearly 40%, catapulting Kohl’s to 13th place among the top 15 ranked sites from 11th place in October. Best Buy jumped from 8th place in November from 11th place in October.

  • Walmart increased its share of Hispanic visitors to the top 15 sites ranked by comScore in November by 2,498 visits over the month of October.
  • Amazon saw a drop of 2% in its share of the total visits to the top 15 sites by Hispanics compared to October, but continued to hold first place among the sites monitored.
  • Amazon, Walmart, eBay, Apple, Target and Samsung maintained their top five rankings with Hispanics in that order in November compared to October.
  • Etsy dropped from 8th place in October to 11th place in November, or from a total of 7,012 visits to 6,462 with Hispanics.
  • Ticketmaster saw a dip in visits by Hispanics in November compared to October, slipping from 8th place in the rankings to 11th.
  • The Home Depot remained steady, garnering 4.3% of overall visits to the top 15 sites in November, the same percentage as in October.
  • eBay and Walmart saw decreases in their share of total visits to the top 15 sites by Hispanics by half a percentage point in November compared to October.

 

What: A summary of the most relevant consumer insight research in the US, US Hispanic, and Latin American markets.
Why it matters: If you’re trying to keep up with the latest happenings, this is your one-stop shop.

 

  • According to Packaged Facts in the report The Financial Services Market: African Americans and Hispanics, as of 2018, some 70% of U.S. adult consumers say they don’t like the idea of being in debt—a response rate has held relatively steady since 2009, even as consumers have gradually added debt to their balance sheets. African American consumers are 28% less likely than the average U.S. consumer to feel financially secure, but at the same time, they are 16% less likely than average to view the idea of being in debt negatively. Likewise, Hispanic consumers are 15% less likely than the average U.S. consumer to feel financially secure, and they are also more likely than average to say they are no good at saving money.

 

  • US organic sales surpassed US $21 billion in sales in the 52-week period ended Nov. 24, 2018, which was up nearly 9% from the previous 52-week period, according to Nielsen Homescan household projected data. Millennials spent 14% more on organic products compared to the previous 52-week period, and Hispanic consumers spent over 13% more.

 

  • More and more Mexicans are willing to try online grocery shopping, as demonstrated by recent Comscore data. 4.5 million users buy on Walmart, followed by Soriana (1.1 million) and Superama (992,000 users). Bearing in mind that Mexico’s total population reaches over 65 million users, the market of online grocery shopping has great potential in this country.

 

  • The latest findings from MRI’s Cord Evolution research show that Americans watch TV or video in groups almost half (48%) of their total viewing time. Over half (58%) of co-viewing time is spent watching with a “significant other,” while children account for 19%; adult family members, 16%; and friends, 9%. Preferred genres for watching with others change depending on who else is in the room; while Movies come in first or second in all four co-viewing situations, and Comedy TV Shows consistently place in the top three, Sports score highest when friends are the co-viewers.

 

  • According to a report by Pew Research Center, the views of Gen Z – those ages 13 to 21 in 2018 – mirror those of Millennials. Only about three-in-ten Gen Zers and Millennials (30% and 29%, respectively) approve of the way Donald Trump is handling his job as president. This compares with 38% of Gen Xers, 43% of Boomers and 54% of Silents. Similarly, while majorities in Gen Z and the Millennial generation say government should do more to solve problems, rather than that government is doing too many things better left to businesses and individuals, Gen Xers and Boomers are more evenly divided on this issue. For their part, most Silents would like to see a less activist government.

 

What: Nielsen has released the results of its global connected commerce report, which reveals that
Why it matters: Consumers are spending increasingly more time on an expanded range of diverse digital activities. It is undisputed that internet accessibility, mobile technology and digital innovations are redefining consumers’ every interaction and will continue to enable and disrupt many aspects of consumers’ lifestyles well into the future.

This is the digital era, and as such, we are now living a connected life. That’s the idea that Nielsen has proved with a global survey sent to 30,000 online consumers in 64 countries. The Nielsen Connected Commerce report provides insights into the global connected consumer, shopping traits, category evolution, and barriers, in order to identify future growth prospects.

According to Nielsen, 4 billion people (53% of the global population) are connected to the internet, and nearly all of them (92.6%) connect using their mobile devices. 85% of users (3.4 billion) connect to the internet and spend, on average, six and a half hours online. Consumers get online more often, and they stay connected for longer. It shouldn’t surprise us, then, that the range of activities that can be done online has increased. “Internet accessibility, mobile technology, and digital innovations are redefining consumers’ every interaction and will continue to enable and disrupt many aspects of consumers’ lifestyles well into the future,” declares the report.

Development in retailing has quickly become greater in scope than either the physical or virtual store, and now manufacturers and retailers need to create strategic advantages across channels, touchpoints, and experiences along the purchase journey. Connectivity is laying the foundation for e-commerce growth; it is vital for companies to learn consumers’ online behavior and habits, adoption drivers, tipping points and challenges.

Better connectivity will boost e-commerce

Connectivity’s importance comes from the advantages it has brought upon our lives; it has permitted to do all sorts of things without leaving our homes, from talking to our friends on the other side of the world to receiving just about anything we need at our doorstep, right when we need it. As the report explains, at no point in time could this be more apt than now, considering the merging of multiple factors impacting the complexity of consumers’ lives—and shaping new found shopping experiences. In general, brands need to take three things into account: people now lead busy urban lives and need quicker, easier ways to perform their shopping activities; retail is expanding into new avenues and channels; and we must take into account a whole new generation of native digital shoppers who are used to using these devices and services naturally every day.

The report shows that global online sales in 2017 totaled US $2.3 trillion2 or 10.2% of total retail sales and is expected to reach 17.5% by 2021. In 2019, online retail trailblazer, Amazon, will turn 25 years old. With continued technological innovation e-commerce growth is set to outpace traditional formats for years to come. As the report states, “The combination of existing connected consumers spending more, more often, and newly connected consumers purchasing for the first time will proper e-commerce growth”.

Category performance shows a certain trend of diversification

Travel, entertainment (books, music, events) and durable goods (fashion, IT/mobile, electronics) are traditionally the leading categories for consumers to enter the online retail sphere around the world. After two decades of e-commerce, these categories have higher online purchasing penetration and frequency of purchasing than most consumer goods categories.

The consumer is at the center of the connected commerce opportunity. An e-commerce approach that delivers on the various and varied local consumer preferences and circumstances will have a competitive advantage, but those who solve consumers’ convenience aspirations will win.

However, consumers are looking for a wider range of e-commerce options. With a myriad of services, suppliers, products, and prices to choose from at simpler, more trustful websites, consumers now want to complete transactions online more often. This means a significant opportunity for FMCG categories, which need to be replenished periodically and take up a sizeable portion of consumers’ time to shop in physical stores.

According to the survey results, 17% of consumers are purchasing FMCG products online on a regular basis, while 11% have previously purchased online, but not recently. In addition, 30% of consumers are not currently buying groceries online but are willing to consider doing so in the near future. In developing markets this intent is just as important, with 29% of African and Middle Eastern consumers and 42% of Latin American consumers open to online purchasing.

Seek engagement before purchase

Consumers usually go online looking for information, to compare products and prices before actually buying something. Digital media assets are becoming a vital part of building awareness and consideration, satisfying shoppers’ search needs and delivering tangible links to generate purchase outcomes. As we could expect, it’s all about providing a differentiating experience: as e-commerce continues to evolve there are numerous areas to improve consumers’ overall online experience that will encourage trial and steer conversion to online. With convenience as one of the primary motivators for connected commerce, shoppers are looking for a frictionless experience which saves time, reduces obstacles and provides an enjoyable experience.

Enticers to buy online

Retailers can further solve consumers’ apprehensions via interactive services and guarantees. Same day replacement, free delivery for high-value orders, responsiveness and money back for incorrect orders feature highly to encourage online purchases of consumable products.

In the words of Sue Temple, VP, Global Consumer Insights Product Leadership, Nielsen, “The consumer is at the center of the connected commerce opportunity. An e-commerce approach that delivers on the various and varied local consumer preferences and circumstances will have a competitive advantage, but those who solve consumers’ convenience aspirations will win.”

What: E-commerce grew 50% in Mexico during this year’s weekend of specials and discounts, known as “the Buen Fin”. However, marketers still need to find out how to promote the use of e-payment methods as Mexicans still prefer cash and credit cards.
Why it matters: Mexico is still lagging in the area of e-commerce and payment technologies, but events such as the Buen Fin are a good opportunity to catch up with the latest trends.

On the eighth edition of the Buen Fin, thousands of Mexicans rushed to the physical and digital stores of the more than 70,000 participant brands to profit from the most expected special offers of the year. Malls, supermarkets, and department stores were visibly packed, with videos of people fighting each other over electronics and apparel all over social media, as it happens every year. But what about users who preferred the comfort of their own homes to do their shopping?

Concanaco Servytur’s information shows that this year, e-commerce grew a staggering 50% thanks to young people who prefer to keep away from the bustle and hustle of long lines and large crowds. It’s an impressive number, no doubt; but as big as it sounds, the real news is that there’s still enormous room for growth; evidence of an untapped potential that Mexico might not yet be ready to tackle. The fact is only 20% of Buen Fin customers shopped online, while in the US online spending on Black Friday increased 33% from 2017; record levels according to estimations by Global Data. On the first 9 hours of the shopping day, Amazon had already sold 1 million toys and 700,000 fashion items. In the US, foot traffic at actual brick-and-mortar stores dropped between 5% and 9%, while Mexicans cluttered the myriad of new malls built this year.

But perhaps the most blatant proof of Mexico’s lag in innovative shopping habits was evidenced by users’ blind loyalty to traditional payment methods. As surprising as it sounds, contravening experts who have long predicted the imminent fall of paper currency, in Mexico cold hard cash accounted for 51% of total Buen Fin payments, credit cards 30%, debit 18%, and only an incredible 1% used other methods, much to the disappointment of e-payment companies and enthusiasts who were optimistic in predicting a boom in PayPal usage. Adding “insult to injury”, so to speak, only 23% of consumers spent more than 250 dollars, approximately, the bare minimum for consumers in the US. The challenge remains the same: how can e-marketers implement new payment and e-commerce technologies in a society so used to hand-picking both their produce and electronic goods?

On the bright side, not every aspect eluded the world of digital technologies. The Federal Consumer Prosecution Office (PROFECO) used digital media to review and settle hundreds of complaints regarding false advertising or failure to comply with the stated pricing of a given item. For example, in Cancun 26 consumers were immediately able to purchase a screen at $8.6 pesos each (about forty cents of a dollar) thanks to a timely online complaint. So not everything was lost for technology, the country might be taking baby steps, but at least it’s moving forward.

Information by Marketing E-Commerce MX

What: We looked at the top 15 online retail sites visited by Hispanic shoppers in the US in September of this year and how they scored in numbers of visitors.
Why it matters: Target suffered a near 2% drop in September in its share of online shoppers among the 15 top visited sites by Hispanics in the US. The retailer fell from fourth place in August to sixth place in September according to rankings by comScore. The retailer’s stock, however, has risen 30% this year, according to Barron’s.

Number of Hispanic visitors to the Top 15 e-commerce sites in the US, September 2018
Total Audience, Home and Work, PC/Laptop 139,250
Site Total Unique Visitors
Amazon Sites 28456
Wal-Mart 17151
eBay 16014
Apple.com Worldwide Sites 10535
Samsung Group 8839
Target Corporation 8276
WISH.COM 7497
ETSY.COM 7307
The Home Depot, Inc. 6382
Ticketmaster 6133
Best Buy Sites 5357
Kohl’s Corporation 4672
Macy’s Inc. 4544
LOWES.COM 4139
Wayfair 3948

(Source: comScore; Site visits in the thousands.)

Target dropped two places in the top 15 most-visited retail sites by Hispanics in the US in September. Target’s share of the total visits dropped from 7.5% in August to 5.9% in September. Apple bumped up a ranking to fourth place with 7.5% of visits to all sites. Wayfair slipped below Macy’s, Kohl’s, and Lowe’s into last place for September.

  • Ticketmaster dropped two places in the ranking of the top 15 most visited sites in September but didn’t suffer much of a loss in its share of visits (4.4%) compared with August (4.5%).
  • Samsung Group increased its share of visits slightly, rising above Target.
  • As with non-Hispanic visitors to the top 15 online retail sites, Apple increased its share of all visits among Hispanic shoppers to 6.3% from 6.2% in August.
  • Both Kohl’s and Macy’s moved up a ranking in September.
  • Online home and furniture retailer Wayfair took a hit in its ranking, dropping from 12th place in August to last place in September. The company’s stock dropped 25% in September, according to Motley Fool.
  • Target dropped behind Apple and Samsung in September’s rankings, losing nearly 2% of its share of all online visits.

What: We spoke to Jenifer Bice, Senior Director, International Communications and Pedro Mucciolo, Director, International Corporate Affairs at Walmart, in order to find out more about Walmart’s initiatives to compete in the E-commerce space at a global level, but more specifically in Latin America.
Why it matters: As E-commerce keeps gaining ground, stores with a long tradition of brick-and-mortar retail must come up with ways of staying relevant. For Walmart, the key is making consumers’ lives easier and as convenient as possible.

How can an international giant retailer that “has it all” at a global level hit closer to home amongst its local consumers?

The greatest innovations often come from the simplest of questions. Our fast-paced lifestyles have left us with a fundamental issue: we often don’t have as much time in our hands as we wish we had, and with the time we have, we still have to manage our lives and keep our fridges stocked, our homes fresh and our bodies clean. How many times haven’t we wished the shopping could do itself? Or had to make time to undertake the time-consuming journey of commuting, roaming, choosing, paying and repeat again next week? We spoke to Jenifer Bice, Senior Director, International Communications and Pedro Mucciolo, Director, International Corporate Affairs at Walmart, in order to find out more about Walmart’s initiatives to compete in the E-commerce space at a global level, but more specifically in Latin America.

Bring Technology Literally Closer to Home

Jenifer Bice

When we asked Jenifer Bice what she thinks about the future and how Walmart will prepare for it, she comments on the importance of an omnichannel strategy: “What excites me about what’s to come is how we’re adjusting our approach to not only focus on our traditional retail stores but to make sure we’re creating an omnichannel ecosystem to serve the customers.” With about 3,200 retail locations across Latin America, Jenifer believes that with that kind of physical footprint, “We are uniquely positioned to be able to service customers in a way that no one else can, so you can go online and order your groceries and drive up to a Walmart store, Bodega, or Sam’s Club and pick them up without having to get out of your car.”

As she explains, the key concept today is “convenience“. As time seems to move faster every day, consumers are looking for companies that make it all easier. “In the US and also in Latin America, customers are wanting convenience, access, trust in the companies they’re engaging with, and to know that they’re not only getting great prices but also quality products,” asserted Jenifer. “We know our customers, we’re innovating on their behalf, and producing solutions that we know will make their lives easier and more convenient so that they can spend less time walking around the store and more time being able to focus on their families or just having the convenience to shop when they want and how they want. “

Pedro Mucciolo

But the last mile (delivering from the store to your door) model isn’t new for the Walmart group, it’s been going on for a long time according to Pedro Mucciolo, who mentioned that “Superama, the supermarket banner for Walmart Mexico,  had a service called ‘the one hour express delivery service’, that’s been going up for almost 20 years and it started via phone and fax. With technology and innovation, Superama has been able to offer the service via mobile apps, of course, and your laptop.”

Then, the idea has been there a long time, but modern times call for innovative measures. Now it’s up to Walmart to support a great idea with the appropriate technology. A key aspect of the equation is expedited delivery, which is way the company has decided to partner up with players in the delivery industry. For example, “We do have a partnership in Argentina with a company called Mercadoni and they deliver in less than two hours within the city of Buenos Aires,” shared Jenifer.

And all the efforts have paid off. The results in Latin America speak for themselves: “In Chile, online sales have doubled in the past year, so that tells us something about customers wanting convenience and being able to shop wherever they are”, said Jenifer. And customers keep coming back for more, as data shows a customer who tries the service is very likely to use it again.

But perhaps the strongest element in people’s idea of convenience today is being able to download an app that can solve an issue in a matter of minutes, Jenifer told us that “In Mexico, we developed from the ground up and have launched an application called Cashi, and it was created to serve our customers in mexico who are unbanked, so they have an option to be able to go in our stores, use cash, and apply that cash to their app. It gives them a digital wallet so that they can then purchase products in our stores, they can pay utility bills, or they can order Netflix all though their app so that they don’t have to rely on a bank or carrying cash.”

Buy Local, Think Global: a Global Company Catering to Local Needs

“Because Walmart has operations around the world, we’ve been able to get different ideas from different places and roll them out either in a chain-wide app like Cashi or transfer that to other markets,” said Jenifer. “From an international strategy perspective, we’re really trying to make sure that our businesses in the local markets are solving the local needs of their customers. So you have all the beauty of a local business with all of the benefits of being part of a worldwide company.”

We’re really trying to make sure that our businesses in the local markets are solving the local needs of their customers.

The basic ingredient to keep in mind: represent your audiences. Consumers want to see themselves and their culture represented in what they buy and whom they’re buying from, so brands need to take that into account when reaching for audiences in different markets. “From a marketing perspective, the insights for each country are quite different,” asserted Jenifer. “For example, on Big Billion Day, which is the biggest shopping week of the year in India, the marketing is focused on making sure that they have key Indian celebrities who are helping tell their story and encouraging people to shop.”

When asked about how they do this to target US Hispanics, for example, Pedro Mucciolo explained that Walmart does their best to represent their Hispanic audiences in the store: “For the holiday season, we know that food is a very important part of Latin culture and US Hispanic culture, so the multicultural marketing team teamed up with our team to offer US Hispanic customers a series of shows that would have just Hispanic staff cooking recipes around the season and catering to the Hispanic customer, likely to purchase those products in order to make those delicious dishes from Mexico or Colombia or Venezuela. It was very successful, so every year we have a new campaign around holidays.”

Give Back to the Community

In the end, it doesn’t matter how many initiatives you have in terms of growing your business if helping the community isn’t one of them. “I’ve been in Walmart for 10 years but what continues to amaze me every day is how we focus on being this society and supporting the communities where we live and work,” shared Jenifer. “Whether that’s through the women’s economic empowerment initiative, giving grants to local farmers in India so they can make a life for themselves in their communities, focus on more sustainable practices in Latin America, recycle our bags or any other number of things. The more you dig and the more you learn, the more you’re proud to work here and to be a part of the company, so coming back to work with international, I feel I’m just starting to peel the onion again on the more important social things that we’re doing that seem to fly under the radar sometimes.”

“There are a large number of suppliers, for example in Central America, that start off really really small, and thanks to a variety of programs powered by Walmart, they become larger suppliers, so families get better lives, and we create more jobs and more opportunities for the communities as a whole,” added Pedro.

 

What: Natalie Bursztyn, member of the Portada Brand Star Committee, will open a full day of thought-provoking conferences with a talk on DTC brands and e-commerce. To listen to her insights, get your tickets to Portada New York, Sept. 25.
Why it matters: Direct-to-consumer e-commerce is experiencing a meteoric rise. What does the rise of direct-to-consumer brands mean for marketing? Joe Favorito, part of the Portada editorial team, joins Natalie Bursztyn for a thrilling discussion on the matter.

Once upon a time, there were immense barriers to building a brand, and only the big players could dream of launching a company and gaining profit. Times have changed, and now supply chains are rentable, flexible and affordable. Because now the path to consumers is direct, those big companies that had been growing steadily decades ago are not growing anymore, and now anyone can launch a company and be almost sure that it can succeed as long as it answers a need.

According to information from the IAB, 94% of startup founders surveyed by VC firm First Round agreed that now is a good time to be starting a company, precisely because two-thirds of consumers expect direct contact from the brands. The so-called direct-to-consumer (DTC) brands mark an enormous shift in the way products are sold, and for this reason, established companies and industries are living through a disruption that needs to be addressed in order for brands to understand how to communicate with consumers in this new age.

Many of these brands, like Dollar Shave Club, acquired by Unilever in 2016, started online. Then, what is the role of DTC brands and e-commerce in the future? How are brick-and-mortar players supposed to face this change? Some, like Unilever, have decided to purchase the competitor, but big companies worldwide will need to rethink the ways to establish meaningful connections with consumers if they wish to continue growing.

Natalie Bursztyn will be the brilliant speaker covering this topic at Portada New York on September 25. Busztyn oversees global execution of Totto’s marketing strategy across all channels focusing on different market segments. Prior to receiving her MBA from NYU, Natalie directed the strategy, conceptualization and execution of Totto’s first Flagship Store in Bogota, Colombia, as well as worked in the development and implementation of the global brand guidelines. Totto has presence in 52 countries, 600 retail locations and sales of over 14 millions unit in 2014. With the help of Joe Favorito, a member of Portada’s Editorial Team and Chair of the Sports Marketing Board, Bursztyn will delve deep into the topic of DTC brands and e-commerce, and what this means for marketing in the immediate future. Don’t miss her insights, click on the banner below and join us at #PortadaNY now!

What: Chilean bricks-and-mortar retailer Falabella purchases Latin America online retailer Linio for US $137 million.
Why it matters: Online sales in Latin America will double to US $118 billion by 2021 and Falabella is preparing to be a major player, using its physical stores to key advantage.

Chilean bricks-and-mortar retailer Falabella is determined to be a major e-commerce player, and will likely use its physical stores to key advantage as it ramps up to compete with Amazon and MercadoLibre for online sales in Latin America. That’s how industry and regional experts explain Falabella’s recently announced purchase of online retailer Linio for US $137 million.

The word analysts keep repeating is “omnichannel.”

Omnichannel refers to the ability of bricks-and-mortar retailers to offer in-store pickup of goods ordered online.

It could become a key competitive edge for Falabella.

“This is congruent with a trend we are seeing of retailers getting smarter about e-commerce,” Lindsay Lehr, a senior director at the consultancy Americas Market Intelligence tells Portada.

One of the big stumbling blocks to e-commerce in Latin America is the inability of people to receive packages in their homes, which is why omnichannel purchasing is increasingly important, Lehr said.

The word analysts keep repeating is ‘omnichannel’.

Leveraging Stores to Boost Online Sales

Headquartered in Santiago, Falabella operates department stores, supermarkets, home improvement centers, malls and financial services in Argentina, Brazil, Chile, Colombia, Peru and Uruguay.

With the Linio purchase, Falabella’s online footprint expands to cover Mexico, Colombia, Venezuela, Ecuador and Panama.

The acquisition boosts Falabella to the #2 e-commerce spot in its home markets and begins the process of positioning it to take on MercadoLibre and the expansion of Amazon (Amazon Mexico’s Guillermo Rivera recently joined Portada’s Council System) in the region, Lehr says.

“They are getting prepared for what’s ahead.”

Betting on E-commerce

“The company is betting on e-commerce,” analyst and retailing expert Jorge Lizan tells Portada.

Even though online sales now only make up 14-15 percent of its business, Falabella is spending 80 percent of its development budget on the online channel.

Falabella will mine Linio’s database and leverage its e-tailing expertise to position Falabella to take on MercadoLibre and Amazon, Lizan says.

“Linio is very small. They didn’t acquire Linio for the size of the company or to be a big part of Falabella’s business. What Falabella is looking for in this acquisition is to get the infrastructure and expertise,” Lizan says.

Falabella will mine Linio’s database and leverage its e-tailing expertise to position Falabella to take on MercadoLibre and Amazon.

Getting ready to face Amazon

The Linio purchase is about protecting future market share from online competitors MercadoLibre, Amazon, Wal-Mart, and even Alibaba.

MercadoLibre is the undisputed leader in e-commerce in Latin America.

Amazon has taken second place in Mexico and reportedly has plans to expand its operations in Brazil. Its web services division has expressed a long-term interest in investing in Chile.

Wal-Mart is heavily invested in online sales in Mexico and Central America, according to Lizan.

Growing Digital to Offer More Products

With the permission of its shareholders, Falabella plans to raise US $800 million in capital to ramp up its efforts to go digital in Latin America.

“This increase in capital will allow us to accelerate our digitalization and grow regional services for our clients, offering our products across a diversity of channels,” President of SACI Falabella Carlo Solari said in an announcement of the Linio purchase.

“With this acquisition, the company advances its goal of being a leader in electronic commerce in the region,” said Falabella’s general manager Gaston Bottazzini.

Expanding product lines online

The Linio purchase gives Falabella something more than just an online presence. Online translates into the capability to offer customers a broader selection of products beyond the brands Falabella sells in its physical stores.

“They can have limitless numbers of brands which is something they can’t do in their bricks and mortar stores,” Lizan tells Portada.

Moreover, Falabella wants their stores to become fulfillment centers for online sales.

“The name of the game is omnichannel and will increasingly be in the future. Falabella’s brick and mortar presence will definitely give it an edge vs. MercadoLibre,” Lizan comments.

The name of the game is omnichannel and will increasingly be in the future.

Seeing a big online future

E-commerce in Latin America is expected to grow by 19% in the next five years – well above the global average of 11%.

Online sales in Latin America will double to $118 billion by 2021. And according to Lizan, retailing in Latin America is still under developed and under penetrated.

Falabella has the largest retail customer database in the industry; dominates its markets in key offerings such as grocery, home improvement and home and décor; and recently announced a partnership with IKEA in Chile, Colombia and Peru.

From 36,000 feet, the Linio purchase is “very small,” Lizan said. But the advantages on the ground are strategic.

“It’s a benefit for Falabella to have an e-tailer in their portfolio because they will learn from them and the learning curve will be shorter.”

“It is a very strong statement by Falabella.”

What: A summary of the most relevant consumer insight research in the US, US Hispanic, and Latin American markets.
Why it matters: If you’re trying to keep up with the latest happenings, this is your one-stop shop.

  • A study from data analytics firm Consumer Intelligence has found that over 40% consumers say they would be put off applying to a bank that has technical issues. The research showed that technical problems such as security issues have led to consumers being more vigilant, with more than 45% saying that they have changed their behavior.

 

  • After surveying more than 4,000 European respondents about influencer marketing, a report by Bazaarvoice shows that consumers are tired of the repetitive nature of the content and decreasing quality of posts. According to the study, 63% of online audiences feel that influencer content has become “too materialistic” and “misrepresenting real life,” and 49% of consumers believe there’s a need for effective regulation to define stricter rules as well as best practices for content.

 

  • According to new data from Splitit87% of online shoppers will abandon their carts during the checkout process if it is too long or too complicated. In addition to abandoning their carts, 55% of consumers would never return to that retailer’s site. Cart abandonment rates hover at about 70% overall, and older shoppers are the least patience. 90% of those aged 55 and older would not complete a long or complicated checkout process, and only 7% would exit a lengthy checkout but return to the site later, compared to 12% of millennials.

 

  • Periscope has announced the findings of its research on consumer actions, attitudes, and behavior during Amazon Prime Day 2018.  The research, conducted in the US, UK, France, and Germany, found that consumers are spending more, on more items, and online shopping behavior continues to grow in sophistication. The survey of 3,000 consumers found over 80% awareness with the exception of France at just 63%. All countries reported that a mix of online and offline was their dominant way to shop but an average 16% stated they mostly shop online.

 

  • While chatbots and voice assistants are gradually being adopted by consumers, 65% of shoppers in the U.S. and Europe say they are either not very important or not at all important, based on a new survey conducted by Bazaarvoice. In the same vein, 61% of retailers say it is of no or minimal interest to shoppers. The study comprised an online survey of 2,000 adults the U.S., U.K., France and Germany, and 400 brand and retail clients.

 

  • PERQ has released new analysis of consumer call-to-action (CTA) data with key learnings for websites of brick and mortar businesses who sell (or lease) high-consideration, big-ticket items. The research, which looks closely at click-to-conversion behavior as well as the overall online experience, found 77% of car shoppers on dealership websites are actually at the beginning or middle of the process and are interested in tools that help them make a decision rather than immediately completing a purchase.

 

What: We looked at the top 15 online retail sites by visitors in the US in June of this year and how they scored in number of visitors.
Why it matters: Visitors to Macy’s website fell slightly in June, putting it in the last place according to comScore’s latest ranking of the top 15 e-commerce websites in the US for June of this year. Kohl’s surged ahead two spots, nipping on the heels of Best Buy. Target continues to have the largest online following of customers among traditional and off-price department stores, as well as ranking ahead of the home improvement big-box chains The Home Depot and Lowes.

Number of visitors to the Top 15 e-commerce sites in the US, June 2018
Total Audience, Home and Work, PC/Laptop 949,169
Site Total Unique Visitors (000)
Amazon sites 202054
Wal-Mart 114807
eBay 104604
Apple.com Worldwide sites 65560
Target Corporation 59509
The Home Depot 47879
ETSY.com 44058
Samsung Group 40666
WISH.com 40500
Ticketmaster 36296
LOWES.com 35757
Best Buy sites 33513
Kohl’s Corporation 32658
Wayfair 32074
Macy’s Inc. 31636

(Source: comScore)

  • Amazon, Wal-Mart, eBay, Apple.com and Target held on to their positions as the top five online retail sites in number of visitors in June.
  • com saw a slight decrease in visits from 67,102 in May to 65,560 in June.
  • Macy’s slipped to last place in the June ranking, with just 3.4 percent of all visits compared to 3.7 percent in May.
  • Lowe’s managed to move up from last position in May to 11th place in June, but it, too, saw a decrease in visitors from 38,635 in May compared to 35,757 in June.
  • Online visits decreased slightly in June compared to May for all of the sites ranked, except for eBay which saw a very slight increase.
  • The Home Depot made a big move up in rankings compared to May, surging ahead to sixth place, ahead of Etsy.com, Samsung Group, and WISH.com
  • Home Depot’s online sales continue to outpace Lowes.
  • Amazon continues to overwhelm the entire field of competitors ranked, with more than 21 percent of all online visitors measured in June and May by comScore.

What: We looked at the sites where Latin Americans, and particularly Mexicans, went looking for possible online purchases in April 2018.
Why it matters: Even though Amazon is making great efforts to expand in Latin America, the retail giant is still way far behind Mercadolibre, always the leader of online shopping in the region.

As we saw in previous editions of this ranking, Amazon had already approached MercadoLibre and was comfortably sitting in the second spot. Last month, Latin American internet users preferred B2W Digital for online purchases, but now Amazon comes back to the second spot.

Top 10 E-Commerce Sites in Latin America, April 2018

Total Audience, Home and Work, PC/Laptop. Total Unique Visitors (000)
Total Internet: Total Audience 183,917
Retail 117,009
1 Mercado Libre 57,255
2 Amazon Sites 21,126
3 B2W Digital 17,281
4 Alibaba.com Corporation 12,886
5 eBay 9,898
6 CNova 8,283
7 Apple.com Worldwide Sites 7,762
8 Wal-Mart 7,554
9 Google Shopping 7,095
10 Buscape Company 5,796

[Source: comScore]

  • 63.6% of Latin Americans with an internet connection visited e-tail sites in April.
  • MercadoLibre is still the clear winner. With 48.9% of visits, it remains stable on the first spot.
  • Amazon is right behind with 18% of visitors.
  • B2W Digital received 14.7% of visits.
  • 11% of Latin American internet users looking for online shopping visited Alibaba.com Corporation.
  • eBay was visited by 8.4% of users, almost exactly the same as the previous month.
  • 7% of online shoppers visited CNova.
  • Apple.com received 6.6% of visits, while Wal-mart was seen by 6.4% of users.
  • 6% of online shoppers went to Google Shopping, exactly the same as the previous month.
  • Appearing in the list for the first time, Buscape received 4.9of visits.

Top 10 E-Commerce Sites in Mexico, April 2018

Total Audience, Home and Work, PC/Laptop, Mobile. Total Unique Visitors (000)
Total Internet: Total Audience 64,619
Retail 43,032
1 Mercado Libre 18,492
2 Amazon Sites 10,268
3 Wal-Mart 8,052
4 eBay 7,552
5 Linio Sites 7,504
6 WISH.COM 4,047
7 COPPEL.COM 4,008
8 Ticketmaster 3,593
9 Alibaba.com 3,568
10 Samsung Group 3,344

[Source: comScore]

  • Out of the total number of Mexicans with an internet connection, 66.5% visited e-commerce sites in April.
  • 42.9% of those users visited MercadoLibre, 2.97% more than the previous month.
  • 23.8% of internet users looking for e-commerce possibilities went to Amazon. 
  • eBay and Walmart switched places. Walmart is on the third spot with 18.7% of visits and eBay was seen by 17.5% of users.
  • Linio Sites received 17.4% of visits.
  • 9.4% of users visited Wish.com, while 9.3% went to Coppel.com.
  • Ticketmaster received 8.3% of visits.
  • Alibaba was seen by 8.2% of users.
  • 7.7% of users visited Samsung Group, 1.7% more than the previous month.

What: Energy BBDO has published the results of a study conducted to find out the true impact of the new government administration in Hispanics’ shopping and spending habits.
Why it matters: The truth couldn’t be farther from the rumors that started after the new administration: Hispanics are shopping and spending more than ever, and will likely continue to do so.

As soon as the new administration took office, a wave of anti-immigration policies spurred predictions that Hispanics would start spending less. Companies across the country wondered how this would impact them as headlines all over reported that Hispanic communities would stay home more and spend less often. Therefore, Energy BBDO decided to conduct a study to go beyond those headlines in order to find out exactly how the administration change impacted Hispanics’ minds and shopping habits during the last year.

Energy BBDO conducted more than 1000 surveys of documented and undocumented Hispanics, as well as of non-Hispanics for comparison. The quantitative research was supplemented by in-depth focus groups in Chicago and Los Angeles, and the work was supported by data from Kantar, Univision, and Pew Research.

The main takeaways from the study, explained below, proved the exact opposite of what the headlines foretold: not only did Hispanics not slow their shopping or spending, 49% of survey respondents reported shopping more often than the previous year.

 

Even Undocumented Hispanics Are Spending More

According to the study, even though headlines predicted Hispanics would spend less after the change of administration, 49% of documented respondents reported shopping more often than the previous year, while 56% of their undocumented counterparts, who could feel more threatened by the new administration, responded the same way. And since shopping is necessarily linked to spending, the increase goes hand in hand. 60% of Hispanics claim they are spending more than the previous year, just as 68% of undocumented Hispanics, vs 45% of non-Hispanics. The reason for this could be, quite simply, that “life goes on and family needs remain, no matter the political climate.”

Hispanics Aren’t Shopping Less; They’re Shopping Different

According to survey respondents, there has been a shift in the retail channels Hispanics go to. For example, outlets such as mainstream grocery and convenience stores have seen slowdowns, while preferences have shifted towards a more value-centric experience. Therefore, Hispanics have been spending more at mass merchandisers, club retailers, and dollar stores, as well as Hispanic-owned stores or community bodegas. As the study suggests, “This change in behavior seems to be the sole data point that suggests a shift generated by the current socio-political atmosphere, as Hispanics may be consciously staying within their communities for everyday purchases.”

The Real Shift Has Taken Place in Hispanics’ Attitude

U.S. Hispanics are known, among other things, for their optimism. A group that has expressed a positive mindset in spite of hard circumstances is suddenly doubting its place in the new America. Energy BBDO’s research has revealed that 50% of Hispanics have more doubts about their place versus a year ago, and 70% report an increase in prejudice displays since the last election. To quote the study, “Hispanics do not feel free to be themselves, at least not out in the open. They feel pressure to limit expressing their cultural heritage and identity. This, in turn, is causing them to find comfort in what’s familiar and welcoming within their communities.”

Conclusions

Now is the time to consider a more direct and custom approach that reaches out directly to the Hispanic community with empathy and recognition. […] Also, look for ways to show an authentic and long-term commitment, not an opportunistic one-off.

Based on the projected growth of the Hispanic population, and seeing that they’re younger than other demographics, it is likely that they will continue to increase their spending and shopping. However, they tend to prefer value-centric shopping trips as well as community-owned stores. Moreover, even though Hispanics will not stop spending, there is a lot brands can do to make up for the feelings of loneliness and not-belonging caused by the increased prejudice climate. Energy BBDO recommends that brands 1) stay true to their values, 2) celebrate inclusiveness, and 3) show empathy. “Now is the time to consider a more direct and custom approach that reaches out directly to the Hispanic community with empathy and recognition. […] Also, look for ways to show an authentic and long-term commitment, not an opportunistic one-off. Trying to fit something into Hispanic Heritage Month probably won’t have the desired effect.”

[All images by Energy BBDO]

What: We looked at the sites where Latin Americans, and particularly Mexicans, went looking for possible online purchases in March 2018.
Why it matters: Even though Amazon is making great efforts to expand in Latin America, the retail giant is still way far behind Mercadolibre, always the leader of online shopping in the region.

As we saw in previous editions of this ranking, Amazon had already approached MercadoLibre and was comfortably sitting in the second spot. However, Latin American internet users preferred B2W Digital for online purchases in March, and so now Amazon has moved to the third spot. However, the difference in user amounts is not that high; Amazon could get closer to MercadoLibre in the following months.

Top 10 E-Commerce Sites in Latin America, March 2018

Total Audience, Home and Work, PC/Laptop. Total Unique Visitors (000)
Total Internet: Total Audience 184,772
Retail 118,311
1 MercadoLibre 57,302
2 B2W Digital 21,822
3 Amazon Sites 21,719
4 Alibaba.com Corporation 14,942
5 eBay 9,893
6 CNova 8,992
7 Apple.com Worldwide Sites 8,224
8 Walmart 7,736
9 Google Shopping 7,141
10 Gearbest.com 6,460
    [Source: comScore]
  • 64% of Latin Americans with an internet connection visited e-commerce sites in March, 2% more than February.
  • MercadoLibre is still the clear winner. With 48% of visits, it remains stable at the first spot.
  • B2W Digital received 18.4% of visits; very similarly, 18.3% of users went to Amazon.
  • 12.6% of Latin American internet users looking for online shopping visited Alibaba.com Corporation.
  • eBay was visited by 8.3% of users.
  • 7.6% of online shoppers visited CNova.
  • Apple.com received 6.9% of visits, while Walmart was seen by 6.5% of users.
  • 6% of online shoppers went to Google Shopping.
  • Appearing in the list for the first time, Gearbest.com received 5.4% of visits.

Top 10 E-Commerce Sites in Mexico, March 2018

Total Audience, Home and Work, PC/Laptop, All smartphones, All Tablets. Total Unique Visitors (000)
Total Internet: Total Audience 68,613
Retail 43,809
1 MercadoLibre 17,921
2 Amazon Sites 9,541
3 eBay 8,517
4 Walmart 8,147
5 Linio Sites 7,759
6 Wish.com 3,999
7 COPPEL.COM 3,896
8 Ticketmaster 3,613
9 Alibaba.com Corporation 3,530
10 Samsung Group 2,647

[Source: comScore]

  • Out of the total number of Mexicans with an internet connection, 63% visited e-commerce sites in March.
  • 40% of those users visited MercadoLibre.
  • 21.7% of internet users looking for e-commerce possibilities went to Amazon. 
  • eBay received 19.4% of visits, while Walmart was seen by 18.5% of users.
  • Linio Sites received 17.7% of visits.
  • 9.1% of users visited Wish.com, while 8.8% went to Coppel.com.
  • Ticketmaster received 8.2% of visits.
  • Alibaba was seen by 8% of users.
  • 6% of users visited Samsung Group.