How technology is closing the gap between mature and emerging retail markets

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Coming off the heels of the International Reception held last night, Retail’s BIG Show kicked off this morning with a very heavily attended breakout session focusing on what all retailers around the world are focusing on – the rise of the middle class in emerging countries and the corresponding rise in disposable income that comes with it.

But even in an era of lightning fast change in tastes and technology, this morning’s presenters essentially made the argument following a famous line from a song in Casablanca: “The fundamental things apply as time goes by.” The talk centered on how even with all this change, the fundamentals of excellence in retail matter more than ever. Namely, a relevant, desirable product delivered at an attractive price with the highest level of customer service. The customer experience is paramount wherever you are.

The burgeoning middle class in countries across South America, and Brazil in particular, represents the chance to capture millions of new customers and billions of dollars in new revenue, for both domestic and global market retailers. Many of these retailers are trying to retain customers who have seen their incomes quadruple in the past five years and have become more sophisticated shoppers. Veteran BIG Show speaker and renowned consultant on the Brazilian retail market, Marcos Gouvêa de Souza (GS&MD), focused on the differences between the mature retail markets (of the United States and Western Europe) and emerging retail markets of South America. Gouvea de Souza pointed out the disparity between economic growth rates between developing and mature economies and the even bigger disparity between retail growth rates between the two as well. Weighted for population age, he says, Brazil’s retail sector grew at 8.1% versus 2.1% in mature markets. The opportunities for Brazilian retailers, global brands and global retailers are immense.

Additionally, when global brands and then global retailers move into emerging markets, they help develop the market at a faster pace. They change the whole operation as well by bringing in new concepts, new price structures, and new ways of marketing and advertising.

The development of emerging retail markets like Brazil is expected to accelerate as mobile use increases as well. For e-commerce, only about 33% of emerging market customers use the Internet as compared to 77.5% in mature markets. Compare that to mobile usage—with 88.3% connected in emerging markets versus 113% in mature markets—and you can see that retailers have to get to a more omnichannel world in a shorter amount of time and with more focus on what the customer wants to be successful. Emerging retail markets are getting closer to mature retail markets, and it is mobile that is helping them close this gap by helping them develop faster and in a different way.

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