GfK: Retail sales grow 13% in the period from 12/30/19 to 07/13/20

The number was quite unexpected, and the challenge is to keep up or climb up, preferably, in these final months of the year. Online interactions accounted for a good portion of sales and established these platforms as part of the purchase journey of the new consumer.

The information is positive: from January to July this year, Brazilian retail sales increased 13% compared to the same period in 2019. “The number points out that the balance of 2020 may be much better than expected,” says Fernando Baialuna, director of the research firm GfK. In the period, six million consumers were added to the online channels, and general stores increased sales of electrical appliances, using the license for normal operation. 

“Nobody thought this could happen when the pandemic started and physical stores were closed”, says Fernando. “It was hard to imagine that the consumer would embrace online channels so quickly. These channels were the driving force of sales, and the big magazine stores contributed a lot in that sense. Before the crisis, these channels accounted for 32% of sales. This number rose to 54% during the adaptation phase (from week 17 to week 29).”

It is premature to say that this scenario will last with the reopening of physical stores, but it is a fact that many have lost their fear of buying online and are already doing it more safely. “There will be a reshuffle in retail. From now on, the price will have greater weight due to the change in consumer behavior. Acting in a more rational and demanding manner in relation to cost-benefit and negotiation, the consumer will make his/her journey on both channels”, believes the director.

Notebooks at the front

Computers and notebooks were the highlights of the first half of 2020. Notebook sales grew 44% compared to the same period last year, highlights Fernando. “A lot of people needed better devices, because the ones they had were obsolete in order to stay connected and meet the demand for remote work, in addition to their children’s classes.”

After acquiring the basics for work and fulfilling various roles at home, which justified the exponential sale of robot vacuum cleaners, consumers felt compelled to splurge themselves on online shopping, stimulated by the proximity of Valentine’s Day, in June. They decided to give themselves a gift and spent money on smartphones. Sales of these devices had grown 5% before the pandemic, i.e., in the first 12 weeks of the year. In the adaptation phase, sales increased 29% compared to the same period in 2019.

“It was not imagined that the consumer would embrace online channels so quickly”

In the balance of GfK’s 29-week study, some categories registered high performance on the online channel. Notebooks, for example, had an increase of 144% over the same period in 2019. In physical stores, sales went down 7%. Small appliances had a sales increase of 177% online and a decrease of 17% in physical retail. The white line increased its sales by 142% online, but fell by 36% in physical retail. This category has even benefited from the reopening of physical stores. In this first semester, its growth was 22% over the same period in 2019.

Crisis affects regional retail

For medium-sized regional retailers, the crisis was more striking. Even though they made the effort to react, these chains did not have the same breath as the big chains, which had the conditions to invest and finance the consumer with more aggressive actions. Many became sellers to major retailers. “More than money, at that time the medium retail had no structure in the online channel to compete with the big ones, which were already growing,” says Fernando.

Furthermore, consumer behavior in the crisis added to the worsening of this scenario, especially of those consumers not used to e-commerce. “Consumers needed security, and felt more comfortable buying from the big retailers, where they had more online support, and the security of the physical store”, explains the director. From the second half of March to the beginning of July, major national retailers grew 28% over the same period in 2019. Regional retailers shrunk 14%, but are starting to recover.

The most significant growth in sales was noticed in the North, Northeast and Midwest regions, due to government emergency aid”, says Fernando. “It was an injection, a consumer boom in the last month of June. The consumer used the money to buy what they needed. Paying up front or in installments that fit in their pocket.”

By Leda Cavalcanti

Source: Eletrolar News Magazine #137

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