When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Already a subscriber? Log in .

You've reached your limit of one free article.

Get unlimited access to Worldcrunch

You can cancel anytime .

SUBSCRIBERS BENEFITS

Exclusive International news coverage

Ad-free experience NEW

Weekly digital Magazine NEW

9 daily & weekly Newsletters

Access to Worldcrunch archives

Free trial

30-days free access, then $2.90
per month.

Annual Access BEST VALUE

$19.90 per year, save $14.90 compared to monthly billing.save $14.90.

Subscribe to Worldcrunch
Economy

Retailers And The Pandemic: Adapt Or Die

Consumer habits shifted dramatically as people sheltered in place. In-person shopping is picking up again, but everything's still in flux for sellers, who will have to adapt or say 'adios.'

The La Vega Central market in Santiago, Chile
The La Vega Central market in Santiago, Chile
*Roberto del Río

-OpEd-

SANTIAGO — The era of COVID-19 could also be called the sink-or-swim era, at least when it comes to retailers, both large and small. The pandemic has caused consumer habits to change quickly and in ways nobody expected. Companies, as a result, must either move quickly and adapt, or sink.

Today, the what and the how in mass-scale consumption has become an uncertain realm, especially in Latin America, which has yet to see any light at the end of the tunnel in this prolonged crisis.

In retail, the most obvious adaptation has been to transition online. The speed at which businesses have done this exceeded any prediction that might have been made, and in Chile this was because some 229,000 households suddenly began buying online. Driving the digital transition were quarantines that blocked or limited movements, including supermarket shopping, but also people just wanting to stay home because of health concerns.

Sooner or later we shall go back out and face the "new normal," which means shops will reopen and there will be a new, mass consumption scenario. How will consumers return to shops? What will they buy, how and why? These are some of the questions the industry, if it hopes to capture this new consumer, must grasp fast and answer.

The what and the how in mass-scale consumption has become an uncertain realm.

In the past six months, mass consumption has seen some more specific changes. In Chile it began in March with panic buying ahead of an imminent lockdown, with families wanting to assure supplies for some time ahead. As months passed and restrictions increased, buyers calmed down. Their purchases have now become highly rational (no more window shopping) and broadly based on replacing basic home supplies. The consumption of meat and dairy products and packaged foods has increased. Perfumes, alcohol and drinks are down, and buyers are looking for what they need, at the best price. A consumer study by the consultancy Kantar has shown that the incomes of 67% of shoppers has dropped in the pandemic.

This can be an opportunity for the big chains in the post-pandemic world. Spending on household and cleaning products will recover its ordinary levels and a new budget space will appear for other consumer goods that saw a recent fall in demand. The return to the "new normal" will feel like freedom, which will be evident in renewed visits to shops and supermarkets. This means the point of sale will once more become the frontline, and strategies on marketing and brand visibility will be crucial to cashing in on post-pandemic consumer habits.

In present conditions it is difficult to see consumption rising again in the short term, and there's little doubt that big consumer sectors will inevitably see a drop in sales. But with the right tools like Big Data and data analyses, retailers can respond fast to these big changes. With information reading systems, retail businesses can spot changing conducts, maintain their supply chains and ensure they're not left out of the market.



*Roberto Del Río is CEO of the TCG Latam management consultancy.

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.

Future

Livestream Shopping Is Huge In China — Will It Fly Elsewhere?

Streaming video channels of people shopping has been booming in China, and is beginning to win over customers abroad as a cheap and cheerful way of selling products to millions of consumers glued to the screen.

A A female volunteer promotes spring tea products via on-line live streaming on a pretty mountain surrounded by tea plants.

In Beijing, selling spring tea products via on-line live streaming.

Xinhua / ZUMA
Gwendolyn Ledger

SANTIAGO — TikTok, owned by Chinese tech firm ByteDance, has spent more than $500 million to break into online retailing. The app, best known for its short, comical videos, launched TikTok Shop in August, aiming to sell Chinese products in the U.S. and compete with other Chinese firms like Shein and Temu.

Tik Tok Shop will have three sections, including a live or livestream shopping channel, allowing users to buy while watching influencers promote a product.

This choice was strategic: in the past year, live shopping has become a significant trend in online retailing both in the U.S. and Latin America. While still an evolving technology, in principle, it promises good returns and lower costs.

Chilean Carlos O'Rian Herrera, co-founder of Fira Onlive, an online sales consultancy, told América Economía that live shopping has a much higher catchment rate than standard website retailing. If traditional e-commerce has a rate of one or two purchases per 100 visits to your site, live shopping can hike the ratio to 19%.

Live shopping has thrived in China and the recent purchases of shopping platforms in some Latin American countries suggests firms are taking an interest. In the United States, live shopping generated some $20 billion in sales revenues in 2022, according to consultants McKinsey. This constituted 2% of all online sales, but the firm believes the ratio may become 20% by 2026.

Keep reading...Show less

The latest