Magazine Luiza and Mercado Livre are examples of companies that invest in the acquisition of startups, rethink strategies and thus manage to overcome the drop in sales of the traditional November promotion
For the vast majority of sectors, Black Friday was disappointing in 2022. According to surveys by Nielsen/Q, Confi/Neotrust/ClearSale and Ebit, for the first time in the history of the campaign in Brazil, there was a drop in revenue from one year to the next, with the percentage varying between 1% and 28% of decline.
Even for the Brazilian Association of Electronic Commerce (Abcomm), which identified a small growth of 3% in spending on Black Friday, the result was lower than that achieved last year.
“We had the World Cup effect, in which consumers anticipated their purchases, mainly electronic equipment. We also identified less aggressive discounts and a lower free shipping incentive”, says Abcomm’s market intelligence director, Alexandre Crivellaro, pointing out the reasons for the shrinkage.
Binders
For retail companies that systematically invest in innovation through the acquisition of startups, the result was better than the industry average. Magazine Luiza was the largest buyer of innovative and scalable businesses in Latin America between 2016 and 2021, with the acquisition of 25 startups. The data is from the Sling Hub Latam Report, which gathers data from more than 24,000 startups and 656 investors from seven countries in the region, including Brazil, Argentina, Colombia and Mexico.
On Black Friday 2022, the Brazilian company opted to “dilute” promotions throughout the month of November and, with this strategy, achieved sales growth in all channels. “We had double-digit growth across all sales channels in November. It was the best month of the year, thanks to this accurate reading of what Black Friday would be like in 2022”, explains Eduardo Galanternick, Vice President of Business at Magalu. The company does not disclose the gross revenue of the promotional campaign.
Another example was the 10% growth in sales in Brazil, published by Mercado Livre, which ranks tenth in the Sling Hub Latam Report. The Argentine marketplace also clarifies in a note that in the week of the campaign, the increase compared to last year was 19%.
The company’s sales highlights in 2022 were electronic products and fashion items. “While sales of electronic products continue as a natural vocation for the date, the fashion sector has gained relevance due to the search for clothing in the colors of Brazil, adding to the maturation of the sector in Brazilian e-commerce”, informs the positioning of Mercado Livre.
Technology and inovation
The acquisition processes of startups are, in Alexandre Crivellaro’s evaluation, an interesting alternative to incorporate technology and innovation in e-commerce companies. “The opportunity to create solutions is often in the startup because the big company already has all the capacity involved in the operational area. The startup is a way to encourage innovation outside the company and the success rate (of the acquisition) is very high”, he opines.
Crivellaro cites, among the areas where there is room for innovation in e-commerce, from security, with anti-fraud mechanisms and solutions for new and old forms of payment, to creative ways for consumers to access the product. “This Black Friday, the fashion sector was a highlight. We have a lot of room for development in this sector, such as the application of augmented reality and even the metaverse, which is still a promise for companies that operate on the internet”, concludes the vice president of Abcomm.
For the professor of economics at Ibmec-RJ, Caio Ferrari, electronic commerce used to investing in technology and user experience will always be ahead, especially in critical moments, such as a promotion with a specific deadline. “In practice, every minute that that site is down, or taking a long time to respond to the customer, is money that the company is not earning”, he assesses.
The company Sofist carried out a survey of 146 Brazilian e-commerces and observed that 38% of them were offline for more than 15 hours during the Black Friday period, impacting the campaign’s sales pace. According to Sofist, technical problems increased the loss of e-commerce on Black Friday this year by 34% compared to 2021.
Ferrari highlights two fundamental investments for companies interested in improving sales results through digital means. “The first is the power of the brand itself, it is necessary to invest in reputation. Just as important is ensuring the website’s sales structure, having a pleasant design, a good user experience. Without this, the store does not sell well, ”he adds.
Follow news through the website https://pipeline.capital
and also from LinkedIn
and Instagram