The State Of Retail eCommerce In Brazil

Lily Varon

The economic decline in Brazil has hit the retail sector hard , but eCommerce is still growing. To understand the state of affairs in retail eCommerce in Brazil, in 2016 Forrester surveyed online retailers in Brazil together with industry partner e-Commerce Brasil. Here are a few findings from the research:

  • Retailers are feeling the pain of operating in the midst of Brazil's economic recession. Nearly 60% of online retailers say slowing consumer spending with be a significant barrier to their eCommerce growth over the next 12 months. Furthermore, more than half cite the operational constraints of keeping up with constant regulatory change.
  • Online retailers are increasing their eCommerce technology budgets. Despite the pressure to reduce costs during turbulent economic times, 64% of Brazilian retailers we surveyed are increasing eCommerce investments to help them weather the storm.
  • Investment priorities include marketing, mobile – and uniquely! - marketplaces. Retailers this year are focusing on marketing and mobile, much the same as in the US and other global markets. Unlike many other markets, however, Brazilian digital commerce pros are also prioritizing marketplaces. Why? Third party marketplaces are a relatively simple way to sell direct to consumer online. And retailers like Magazine Luiza and Walmart Brasil are prioritizing launching marketplaces on their own retail sites as a source of new revenues.
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Adaptable Teams Prevail Over Mythical Retail End Times

The press continues to highlight bankruptcies and store closings to support a theory that the entire retail market is in a death spiral.  However, neither bankruptcies nor store closings accurately reflect the state of the retail market.  In 2017 we see an actual Wikipedia page dedicated to the ‘retail apocalypse’.  Headlines span the past seven years touting the doom of retail:

Retail Apocalypse Headlines from 2010-2017

 
Bankruptcies Aren’t Proxies For Retail Market Health…
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Introducing The Forrester Readiness Index Report: eCommerce, 2016

Satish Meena

With the increasing significance of the online channel in retail, we need variables other than macroeconomic data or consumer market size to assess the readiness of a market for eCommerce. While there is no universal tool for selecting expansion opportunities, the Forrester Readiness Index (FRI) provides a holistic assessment of the eCommerce setting for each country.

Our recently publihsed Forrester Readiness Index For eCommerce, 2016 is a holistic assessment of the eCommerce setting to provide insights for global expansion needs. The eCommerce index signifies the level of opportunity in each of these countries over the next three to five years and measures the impact of technological and behavioral influences in conjunction with the revenue opportunity.

The FRI evaluates 25 quantitative variables in four areas — consumer, vendor, infrastructure, and online retail opportunities — in 55 countries across the globe. We selected each quantitative and qualitative indicator to measure the relative “readiness” of the platform in each country; these indicators reflect each country’s eCommerce environment and overall retail opportunity. 

Some of the key findings of the Index:

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Five Shades Darker? – What The Diageo “Indirect Access” Judgement Really Means For SAP Customers

Duncan Jones

At last, exactly two years later, the long-awaited sequel to my hit, if overly censored, blog post: Five Shades Of Grey (How software buyers and license managers should be compliant without being submissive). The trigger is the SAP vs Diageo verdict, which generated a lot of hysterical blogging and tweeting with dire predictions for SAP customers. IMO most commentators have overlooked the crucial parts of the judgment and therefore significantly overstated the case’s negative implications for SAP customers. I believe the judgement has actually made this grey area slightly more black-and-white. My analysis, subject to the usual IANAL disclaimer, is that the real implications are:

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Can Salesforce Really Prescribe An End-to-End Sales Process?

John Bruno

Last week, nearly 170,000 business and technology professionals descended onto San Francisco for Salesforce’s annual conference, Dreamforce. The event itself was ripe with discussions on social responsibility and charity, but most attendees, including myself, attended for other reasons. We wanted Salesforce to pull back the curtains on what it saw for the future of sales.

Once things got underway, Salesforce’s Einstein took center stage… quite literally. We’ll get to Einstein in just a bit, but not to be overshadowed by Einstein, Salesforce unequivocally made their keynote about sales. 2016 was a landmark year for Salesforce and their commitment to sales. They closed on their acquisitions of SteelBrick and Demandware, and used Dreamforce as the stage to rebrand them as Salesforce CPQ and Commerce Cloud respectively. So what does all this mean? It means that regardless of sales channel, Salesforce is fighting harder than ever to be your selling platform of choice… and they make a pretty compelling case.

Let’s take a closer look at the case Salesforce is making. To do so, we must understand Salesforce’s pillars of technology supporting sales.

  • Sales Cloud delivers core CRM functionality for sellers. Sales Cloud is the bread and butter for Salesforce. For many of its customers, Sales Cloud represents the foundation of technology enabled selling processes. From account and opportunity management to pipeline management and white space analysis, Sales Cloud helps sales and sales leaders strategize and prioritize their sales efforts.
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Making Sense Of Round One In The eCommerce War During The Festive Sales Season In India

Satish Meena

The first week of October witnessed the start of the holiday sales season in India as the big three online retailers — Flipkart, Amazon, and Snapdeal — launched high-profile sales. Originally started by Flipkart in 2014 as Big Billions day, this week witnessed a discount-driven war among the top three players.

Online retail in India has witnessed significant growth during the past five years, powered by highly funded online retail companies that bought growth through discounts. This gross market value (GMV)-led growth led to very high valuations and burn rates for retailers, leading some investors to question their long-term profitability. This has led to a slowdown in funding as well as cost cutting by online retailers in the past six months. Before the start of the festive season, Flipkart was looking to maintain its market share; Amazon was looking to take market share from Flipkart, Snapdeal, and smaller players; and Snapdeal was looking to find a place in the changing dynamics of India’s online retail market. 

Here are some of the key lessons from this festive sales season for the key players in the online retail market in India.

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Short Form Product Video Can Be The Key To Converting Customers

Nick Barber

Marketers have a great arsenal of tools to drive conversions and now short form video needs to be part of that mix. Invest in it now to differentiate your business. Historically, video has been expensive to produce and manage, but that’s changed. It no longer costs a fortune to produce video content. In fact, some retailers added video production to their existing photography process and they’re using the same equipment. Online video platforms can track the performance of videos across multiple sites--not just your own--and how they influence customers. Because of this, video ranks among the top new initiatives where retailers plan to invest in 2016.

 

 

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Announcing Forrester’s Latest Latin America Online Retail Forecast

Lily Varon

It’s been a big news year for eCommerce in Latin America: Brazil’s economic instability has tempered eCommerce growth, elections in Argentina have raised hopes that favorable regulatory changes are ahead, and Amazon’s entry into Mexico has shone the spotlight on the region’s fastest growing market.  According to Forrester’s recently published forecast, online retail sales in Brazil, Argentina, and Mexico (the region’s three largest markets) will reach $30.9 billion by 2020, up from $20.8 billion in 2015. Some key findings from this research include:

  • Brazil remains the region’s dominant eCommerce market. Brazil’s online retail sales today are more than double those for Mexico and Argentina combined. Despite economic (and political) woes, online sales are growing, and the market shows signs of maturity:  Online shoppers in Brazil span social classes and buy across categories – with categories like apparel and footwear gaining a larger share of the overall online retail sales pie.  
  • Macroeconomic conditions in Argentina have presented obstacles to eCommerce growth. Tight import restrictions enacted in 2012 made importing products extremely expensive and kept foreign investment in the market at bay. The newly elected government appears to be working towards loosening up these restrictions, though little has changed so far. Local traditional retailers are driving eCommerce growth and increasingly adding omnichannel capabilities for consumers. For example, traditional retailer Falabella offers customers visibility into store inventory, and flexible fulfillment options like multiple pick up sites or buy online pick up in store.
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The Latin American Economy Is Slowing Down Online Retail Market Growth

Satish Meena

Online retail in Latin America faces a number of challenges: a troubling economy, rising unemployment, high inflation, and regulatory and infrastructure problems. The recently published Forrester Research Online Retail Forecast, 2015 To 2020 (Latin America) explores the impact of all of these factors. Some of the key findings are as follows.

  • Brazil remains the largest, but slowest-growing, online retail market. The online retail market in Brazil is double the online retail markets of Argentina and Mexico combined. But the ongoing economic crisis in Brazil is hurting its online retail market and causing a slowdown. We expect online retail in Brazil to grow at a compound annual growth rate (CAGR) of 10.5% from 2015 to 2020, compared with the CAGR of 28.3% witnessed from 2010 to 2015. Customers are spending less on both offline and online retail, which affects the overall growth rate and penetration of online retail, particularly in non-metropolitan areas. A lack of regulations and an unfavorable tax regime make it difficult for online retailers to expand beyond metropolitan areas.
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Why A Tax Law Change In Australia Could Impact Online Revenues For US Online Retailers

Lily Varon

In August 2015, the Australian government announced an impending change to their tax structure that will impact online retailers serving the market via international shipping. Today, Australian consumers can import up to A$1,000 duty-free when they buy from a foreign retailer. The A$1,000 duty-free exemption is known as the low value threshold (LVT) and it has driven a large cross-border shopping habit among online shoppers in Australia. But change is afoot and retailers should know that:

  • Goods and services tax (GST) will be added to cross-border transactions previously exempt. As of July 2017, the Australian government will be expanding its GST collection to purchases previously exempt under the A$1,000 threshold. Additionally, the government stipulates the onus is on retailers to collect and remit the tax: According to the Australian Treasury Department, "For goods with a value of A$1,000 or less, GST is applied at point of sale. Overseas vendors with an Australian turnover of $75,000 or more will be required to register, collect and remit GST on low value goods."* 
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