• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • WEBINARS
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Few Brazilian Retailers Prepared to Tap Growing Consumer Demand in Country's Interior, Study Says

Few Brazilian Retailers Prepared to Tap Growing Consumer Demand in Country's Interior, Study Says

May 4, 2015
Boston Consulting Group

Concerns about the future are causing many Brazilian consumers to keep a tighter hold on their wallets. In contrast with the last 15 years, when Brazil enjoyed a period of economic stability that led to a strong consumer market, the country's economic growth now is slowing – along with consumers' appetite for spending. Although purchasing is projected to slow overall, Brazil's interior cities are bucking the trend.

A Range of Challenges to Overcome
Moving into Brazil's interior presents a new set of challenges. "Because inland populations are less dense, consumer demand is more fragmented," explains Olavo Cunha, a BCG partner and an author of the report. "As a result, companies have a more difficult time reaching the minimum thresholds needed to warrant the modern retail presence of branded stores seen in urban coastal areas."

Distribution and logistics are also problematic. The interior is harder to reach and more costly to serve with the typical retail supply chain. Another obstacle is finding local store managers and sales reps with the necessary skills, knowledge, and education.

Finally, many retailers lack an understanding of the buying patterns, preferences, and behaviors of consumers in Brazil's interior. Because of these four challenges – fragmented demand, high cost to serve, shortage of local talent, and lack of consumer insight – most leading retailers have struggled to effectively reach Brazil's inland regions.

Five Actions for Winning Brazil's Interior
BCG has identified five actions that can help retailers in Brazil move strategically inland:

–  Map the landscape. To address the problem of fragmented demand, retail companies must think in terms of clusters – groups of cities that are relatively close to each other. At the same time, retailers should identify the commercial hubs for each cluster and assess the extent to which competitors have a presence in those areas.

– Develop new store formats. To profitably enter Brazil's interior, companies must create a local presence in a cost-effective way. To succeed, it may be necessary to try out different formats such as smaller, mobile, pop-up, and "virtual" stores.

– Create a multichannel strategy. We expect e-commerce activity in Brazil's interior to grow significantly in the coming years, as it has in other developed countries. Forward-looking retailers must create a strategy that integrates multiple channels – both on- and off-line. For example, retailers can combine showrooms with online and catalog offerings.

–  Rethink operations. To reduce the high cost of serving interior regions, retailers must rethink their approach to logistics and inventory management. It may make sense to outsource logistics to a third-party provider, offer broad but shallow assortments of merchandise, and increase storage areas to reduce delivery frequency.

–  Build a local work force. Given the shortage of local talent, retailers that want to compete in the country's interior must develop strategies to attract, develop, and retain human resources. One approach is to partner with local universities.

"Although most major retailers have yet to target Brazil's interior cities," notes Rim Abida, a BCG principal and an author of the report, "other companies are already winning market share and customer loyalty – companies like Havan and Eletrozema. These five strategies can help companies make the leap to Brazil's interior – and do so profitably."

Source: The Boston Consulting Group

RELATED CONTENT

RELATED VIDEOS

Consumer Packaged Goods Retail Latin America
KEYWORDS Boston Consulting Group Brazil's middle class Brazilian GDP consumer packaged goods Latin America multichannel retailing order fulfillment Retail Retail Distribution Retail Supply Chain Management Supply Chain Management: Retail
  • Related Articles

    Omnichannel Demand from Customers Forces Retailers to Adopt More Competitive Strategies, Study Says

    Free Shipping, Easy Returns, In-store Cell Phone Notifications Among Tech Retailers Should Invest In, Study Says

    Consumer Spending Poised to Take Off Among Mexico's Growing Middle Class

  • Related Events

    AI in Multiparty Control Towers: Why enterprise-level AI doesn't work in supply chain management

    12 Steps to a Resilient Enterprise

Boston Consulting Group

Business Execs Expect More Tough Times, But Aren't Taking Tough Actions

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: Cadila Looks to Double Vaccine Capacity; Pfizer Makes South Africa Deal After Standoff

    Coronavirus
  • Ocado

    Kroger Is Amassing a Robot Army to Battle Amazon, Walmart

    Logistics
  • Why Is There a Global Semiconductor Shortage?

    Watch: Why Is There a Global Semiconductor Shortage?

    Coronavirus
  • Mathematics

    Solving Supply-Chain Disruption Comes Down to Mathematics

    Data Management (Big Data/IoT/Blockchain)
  • Rubber Tire

    Rubber Scarcity Creates New Headache for Beleaguered Automakers

    Coronavirus

Digital Edition

Scb feb 2021 lg

2021 Supply Chain Management Resource Guide

VIEW THE LATEST ISSUE

Case Studies

  • Remote Implementation: A Dose of the Right Medicine for B2B Pharmacy

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

Visit Our Sponsors

Yang Ming 6 River Systems ArcBest
Armada aThingz BluJay
Burris Logistics DSC Logistics DCSA (Digital Container Shipping Association)
DHL Resilience360 Flash Global Genpact
Geodis GEP GreyOrange
Honeywell Corporate Honeywell Intelligrated Infor
Inmar Kibo Commerce Kinaxis
Logility Magnitude Software MPO
Old Dominion Oliver Wight OpenSky
Paccurate Ports America Purolator
QAD Precision Red Classic Riskmethods
S&H Systems Snapfulfil TGW Systems
Tradepoint Atlantic Transportation Insights Watson Land Company
Westfalia Technologies Workjam
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2021 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing