The retail industry has changed a lot over the past few years, going from physical store sales only to purely digital shops to a mix of both. Since the beginning of the 21st century, companies have been looking for ways to use technology in every aspect of their process. Now, fast-changing trends and tools can represent both a challenge and an opportunity for growth.
The reality of retail today is that it must be fast-changing and dynamic to keep up with its rapidly evolving surroundings. Before, it relied on two-week information to establish pricing, which changed slowly and not that often. Brands all around priced their products in the same range, with notable differences between volume and high-end brands. However, when fast fashion came to be and luxury products started to be accessible for a fraction of the price, pricing started to fluctuate on a day-to-day basis.
The pandemic, increasing digitalization and the far-reaching effect of wars on supply chains have caused the retail industry to constantly play catchup with itself. As digital campaigns become more successful, companies must learn to adapt to an omnichannel approach. This year, for example, the Hot Sale campaign generated MX$29.9 billion (US$1.74 billion), representing a 29% increase compared to the previous year. In 2014, the first time this campaign was carried out, sales amounted to MX$7.66 million (US$447,925.16).
“The online experience provides a number of advantages such as convenience, accessibility and greater product selection compared to physical stores,” writes Richard Horbach Martínez, Analyst, Grupo Financiero Intercam. “For businesses, it allows greater insight into consumer patterns and habits, and gives them greater scalability, while allowing them to collect, analyze and act on consumer data with ease, to make an appropriate and frictionless purchase.”
Consumer data is what drives brands and companies to adjust their business models and strategies, which can turn into higher customer engagement and, eventually, higher revenue. Companies like Amazon and Mercado Libre, not to mention the digital stores of traditional retailers like Liverpool, are now able to track not only what people buy but also what they look at before they do. With this, companies can have insight into trends and target marketing for specific sectors.
Post-pandemic, companies are not letting go of e-commerce but they are looking to diversify the ways in which they reach customers. An omnichannel approach is key, with some retailers still boosting the opening of physical stores, like Aerie and Reebok in Mexico. Nearshoring is also changing some brands’ supply chains, driving manufacturing to Latin American countries like Brazil and Mexico to cut shipping costs and lessen their environmental impact.