McKinsey & Company produced a very informative article that shines light to the following question: “Amid one of the country’s most severe recessions, how can consumer-goods companies and retailers succeed in Brazil?”
A few highlights include:
Cautious, concerned, and conservative
“Consumer confidence in Brazil was the lowest among 26 countries surveyed: only 8 percent of Brazilians were optimistic about the national economy (Exhibit 1). This bleak outlook is a departure from the positivity and optimism that Brazilians have historically displayed even in troubled times. It appears that the country’s most recent economic woes have significantly shaken Brazilians’ confidence.”
“The survey responses brought to light a set of behavioral shifts among Brazilian consumers. Most of these behaviors are also evident among consumers elsewhere in the world, but they are amplified and intensified in Brazil. Consumer companies operating in the country would do well to view these shifts as a call to action.”
1. They proactively search for savings.
2. Some remain brand loyal—but only if the price is right.
3. Once they ‘trade down,’ they might not go back.
4. There are splurgers in select categories.
5. They shop across channels.
Imperatives for consumer companies
At every price point, think ‘value for money.’
Invest in advanced revenue-growth-management capabilities.
Find granular opportunities for growth.
Review price architecture to capture both up-traders and down-traders.
Be thoughtful about channel changes.
Relentlessly optimize investments and operations.