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Rogerio Lemes

The Future and Prospects of Retail

We’re living through transformative times and retail has had to accelerate digitization since the beginning of the pandemic in Brazil, back in March 2020.  With shopping centres closing in Brazil by order of the Governor of the State of São Paulo, as well as bars no longer serving customers on-site, street-facing stores that did not get classed as essential services, the retail sector was among the hardest-hit by the arrival of Covid-19 on Brazilian soil. To work around the crisis, companies that had already established a digital presence doubled their online sales efforts and discovered the great power held by what we would term "consumer 4.0”. Thanks to drive-through shopping, storefront applications and delivery services, digital advertising and online campaigns played a major role in the country's economy. Your shop window is on a screen now, framed by apps, and consumers have selected new choice criteria when it comes time to buy. 

Early on in the general quarantine it became evident that companies with a better grip on digital channels and virtual environments would come out ahead enjoying more sales and profit. If you hadn't prepared to work through online platforms you were faced with loss, stock you couldn't move, and, in many cases, bankruptcy filings. Leading national and international e-commerce companies have displayed their power and managed to grow even more throughout the pandemic. Brands that were able to study behaviour patterns under the pandemic, mostly with resort to artificial intelligence, managed to best assert themselves whether it comes to supply or demand. Their outcomes were reflected by favourable numbers in their balance sheets. Online retail has revealed itself a solid, profitable model even in times of crisis. With the new normal falling into place, current e-commerce trends should hold. Post-pandemic consumers will still prize convenience, trust, and quick deliveries. Which is to say there is a permanent behavioural shift accelerated by a virus that has transformed some of the principles that underlie modern society. 

The trend is so solid that we’re already witnessing exponential growth for study and research on digital consumer patterns. In Germany, for example, the start-up SO1 used AI to determine that purchase suggestions made by online stores generate more efficient outcomes than other promotional models. According to the company, when you suggest an article to a customer based on likes, searches and previous purchases, an e-commerce platform could generate up to nine times more purchases than it would through discounts, regardless of discount percentage. Other countries, like the United States, have been using this method for over 10 years. Target, for example, identifies customers as they walk into a store and automatically text them the biggest saves on products they're interested in. Target also puts tablets on shopping carts that can tell where you can find the product you want — directing you to the proper aisle and shelf — optimizing your in-store time. 

We know that the world is increasingly global, that consumers want customized products and services and that trend will dictate the future of retail in the world. To understand all preferences, digital tools, such as artificial intelligence and the Internet of Things have come to stay, and they will keep evolving. All you need to succeed is analyse your data, create good strategies and plans of action and keep studying the ways in which technology can contribute to the sector now that the economy is picking up.  

Although technological advancement can bring a host of benefits it can, on the other hand, create major risk around privacy and information storage. Not all retail companies have specialist safeguards against cyber risk, for example. Throughout my experience working with retail solutions I realize how important it is to invest in specialist companies that play in this field. We now realize that technology brings in meaningful advancement, but we need to watch out for data breaches that greatly inconvenience and harm everyone.  


By Rogerio Lemes, Director of Retail at MDS Brasil
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