Consumer confidence levels are ata three-year high. Some new formats and channels are thriving. Lower-pricecash-and-carry channels (atacarejos) continue to post double-digit growth, withcompanies such as Carrefour and GPA focusing on this channel. GPA, for example,plans to convert 15 to 20 hypermarket stores into atacarejos. E-commerce hasalso been thriving as online sales increased 11 percent and mobile shoppinggrew 90 percent in 2016.
The number of Brazilians who buy online has beengrowing in part because of lower prices online.Sol President Temerhas been pushing an unpopular agenda and much-needed structural reforms withthe help of a supportive Congress. Federal spending control, fiscalresponsibility, and pension system reform should help contain the country’smassive public debt and restore investor confidence. Proposals to simplify taxlaws and control corruption may also boost businesses’ confidence in Brazil’sinstitutions. Annual spending on mobile shopping in 10 large emerging markets(China, India, Indonesia, Philippines, Thailand, Vietnam, South Africa,Nigeria, Brazil, and Colombia) is estimated at $275 billion. 1Figure 23: Number of smartphone users in Brazil (Statista, 2017)6.
2.4.2 Digital Stores and OnlineShopping StrategyWe addressedconnectivity issues by shortening the mobile buying process to three clicks. Aneasy and fast way for customers to purchase goods is required to increase thetraffic by letting them to purchase at any time that they need a product. Oncein the application, three clicks will form the entire process of making apurchase. One clicks for picking the product, a second one for putting it intothe basket, and a third and last to make the purchase. This will enhance thecustomer experience which will also lead to a higher traffic. The possibilityto deliver products is also considered.
For a higher service offer, theapplication will jointly work with Google Maps allowing the customers to makepurchases wherever they are and not needing to spend time when enteringdelivery addresses when buying. This is like what Uber (the transportationapplication) does and which strategy has been successful in different markets,including Brazil.Mobilephones are changing the face of shopping in developing markets.
This growth isforcing retailers to challenge their assumptions about market entry, theirroles in the retail value chain, and their influence on shopping behaviour. The concept is based on the notionthat markets pass through four stages of retail development (opening, peaking,declining, and closing) as they mature, a process that typically takes 10 to 15years. Thedevelopment and use of a mobile phone application will be strategically appliedby ALID.
This tendency forms part of a new tendency that has a considerableinfluence in the way companies do business. This can help to save time andmoney which is necessary to be competitive in the market. Before building aphysical store in Brazil, an application will be created by ALID, allowingusers to keep collect information after scanning the bar code of the productsthey consider purchasing when going to supermarkets.
They will be betterinformed and the ALID will have a better understanding of the Braziliansconsumer behaviour and with easily develop and align its business processeswith potential customers. The idea is to provide the best service to them aswell as to make sure that the business will succeed as this is the phase thatmost fail to address and develop processes and products before considering customerrequirements. And by updating processes according to customer requirements, thepeaking stage can be prolonged and with this make the product or businesscompetitive for a longer time by attracting more customers who also prefer thecompany due to the high customer value that this one provides. SkillBrazil and make in Brazil is another strategy to gain trust of customersbecause of its job creation opportunity. Because of doing this, ALID will beperceived as a local business and become part of their culture and the sametime to be recognized as a German brand for which high quality goods areexpected and for which consumers are willing to explore and try. Braziliansdemand high quality products at low prices which is what this supermarket will offerto the Brazilian market.
By providing jobs, a bond is created between thesupermarket and the residents which results in long lasting relationships andwith this loyalty. ALID will not go to Brazil as a foreign brand but will enterthe market by understanding the culture and becoming part of it. 1 (A.T. Kearney, 2017)