Dispatch: How Brazilian retail has innovated at the height of Covid-19

In this edition, Estela Cangerana, editor-in-chief of Consumidor Moderno, reveals how Brazilian retailers are finding new ways to do business despite operating in a country that has become the epicentre of the coronavirus pandemic.

This article first appeared in issue four of the World Retail Congress report The Retail World 2020: Retailing in a Time of Crisis.

The situation in Brazil has worsened in recent weeks, made possible by conflicting actions from different spheres of government, rising poverty and a complete disregard for restrictive measures of social contact by part of the population.

The number of cases and deaths from Covid-19 has rocketed and the country has become the new global epicentre of the pandemic. With no prospect of improvement in the short term, retail is having to adapt fast.

Although ecommerce continues to reign as the main channel for most brands, other sales channel alternatives are increasingly gaining consumer support. The drive-thru is one of them.

“From clothing to construction material, the list of products available for sale in the drive-thru system keeps growing”

While previously only used by fast-food chains like McDonald’s, it is now being adopted by ice-cream parlours, bakeries and confectioners, and today it has expanded to a series of sectors in addition to the food trade. From clothing to construction material, the list of products available for sale in the drive-thru system keeps growing.

The Telhanorte home-centre network, which is a brand of the Saint Gobain Distribuição Brasil group, is an example of a retailer that has diversified into new channels.

The company’s ecommerce continues to grow, and physical stores are still open, as they are classified as an essential activity. However, the company implemented its drive-thru in the store parking lot and created ‘Telhanorte at your door’, a travelling truck that takes products to housing estates.

Sales of repair and maintenance products grew up to 600%, in the case of sockets, switches and paints. These are items of lesser value, but which show the needs of the ‘imprisoned at home’ consumers who need to take better care of the place where they live and the initiative to carry out projects themselves (a practice not very common in Brazil), as well as small renovations that have stopped due to lack of time before the quarantine.

Drive-thrus are also working for retailers located inside shopping malls, which are still prohibited from opening. Sales of clothes, shoes, cosmetics and even luxury goods are often made through WhatsApp, directly by the real salespeople of the stores, and the products are delivered, with scheduled day and time, in the parking lots of the shopping malls.

“WhatsApp is booming as the most important channel between retailers and customers in Brazil in many different segments”

This type of sale appeared a few days before Mother’s Day, celebrated on the second Sunday of May and one of the most important dates for Brazilian retailers.

Well-known shopping mall chains in Brazil, such as Multiplan, CCP and Iguatemi, opened the parking lots of several of their establishments for a drive-thru, hoping to compensate a little for the losses of the mandatory closure and to support many of their tenants who are suffering significant losses.

According to data from the Brazilian Association of Shopping Centres, Brazil had 577 shopping centres in 2019, which had revenues of R$192.8bn (£30.55bn) last year, employed 1.1 million people and received around 500 million people a month.

It estimates that between the beginning of social isolation in March and the beginning of May, the drop in revenues from shopping malls in Brazil had already reached R$25bn (£4bn).

WhatsApp is booming as the most important channel between retailers and customers in Brazil in many different segments such as restaurants and other kinds of goods. The information collected has helped develop more targeted and personalised offers for individual consumers.

Some sellers have even gone to personally deliver purchases directly to the customers’ homes, in a return to the old model of totally individualised service. It’s a new version of the old door-to-door salespeople.