Releases - 05/31/2017

Words of Pedro Eugenio, mentor of the internet access in São Paulo “Consumers spend more on Black Friday”



People take advantage of the Black Friday to buy products for themselves and not to give to someone else. The promotional date improve sales of televisions, refrigerators and other value-added items.

Retail looks forward to the arrival of November 25, when will be held in the country the seventh edition of Black Friday. In 2015, in a single day, the promotion generated R$ 1.5 billion only with e-commerce sales. Founded in the United States of America, the date was introduced in Brazil by the advertising and entrepreneur Pedro Eugenio, who has over 20 years of experience in the digital market. Responsible for the first access to the internet in São Paulo, is the mentor of Endeavor Network entrepreneurship, speaker and advisor of Camara-e.net. He also created in the country other initiatives to promote e-commerce sales as Cyber Monday, Brazil Game Day and the Free Shipping Day. In this interview, Eugenio reinforces the importance of retailers plan to meet growing consumer demand for the “Black Friday”, which entered the trade calendar to stay.

by Igor Carvalho

What is your assessment of the evolution of Black Friday in Brazil?

Pedro Eugenio – The date has already been incorporated into e-commerce calendar and the physical retail. Although it appeared in the online, it is no longer restricted to a single channel. The promotion is a reality, including to consumers. A recently published research has shown that they consider Black Friday the best day to buy products and take advantage of promotions.

What are the factors to this success?
PE – Implement something that already exists elsewhere facilitates understanding of consumers, but the most favorable aspect was the proximity to the 13th salary (the promotion is always held on the last Friday of November and coincides with the payment of the first installment of benefit). People use this money to consume and, thanks to the retail discounts granted, the promotional day became a phenomenon, the date that best-selling in history. The Black Friday also only worked because of the efforts of the entire chain. When brought in 2010 was noticeable involvement of industry and retail.

What are the projections for this year’s date?
PE – Sales are expected to grow, as in other editions. With the macroeconomic moment we are going through, shrinkage and high inventories, the stores will give bigger discounts to spawn products that have. Consumers are also postponing purchases waiting for an opportunity like this. I imagine that 2016 sales will be higher than the other years and this growth may exceed, in a single day, from 30% to 40% of sales compared to 2015.

Como o varejista pode aproveitar a Black Friday para vender bem?
PE – Com planejamento. Em um único dia, vende-se 30 vezes mais. É preciso se preparar para essa demanda e todas as áreas da empresa devem ser envolvidas, antes, durante e depois, da equipe do site ao call center. Um aspecto que muitas empresas deixam de lado é o pós-Black Friday. Como é que elas vão entregar tudo ou atender o consumidor no caso da troca de um produto? Esse atendimento é muito importante. Também é preciso comprar melhor e negociar bem com o fornecedor para oferecer bons descontos. O varejo tem margem baixa e, se não negociar, fica sem condições de reduzir o preço como o consumidor espera. Há empresas que, em janeiro, já se preparam para a data.

How retailers can take advantage of Black Friday to sell well?
PE – With planning. In a single day, sales grow 30 times more. We must to be prepare for this demand and all areas of the company must be involved before, during and after, since the website staff until call center. One aspect that many companies leave out is the post-Black Friday. How they will deliver everything or attend the consumer in the case of exchange of a product? This service is very important. You also need to buy better and negotiate well with the vendor to offer good discounts. Retail has low margin and, if not negotiate, is unable to reduce the price to the consumer expects. There are companies that, in January, are preparing for the date.

There are differences between the physical planning retail and online?
PE – There are specific, but generally, the challenges are the same: negotiations with suppliers, preparation of the store to account for the increased flow of people and offer good experience to consumers in order to keep their loyalty. The date is a great opportunity to acquire new customers. We did a survey and more than 60% of people return to buy in the e-commerce due to the good previous experience. Therefore, you may sell again at Christmas and throughout the entire year ahead.

Does the industry also need to prepare itself?
PE – The industry noticed the power of Black Friday. Last year we had many special lines. For example, takes it a certain product function, but without altering its main feature, and thus offering up more discount, something that is very important to the consumer. If the industry does not participate, it is impossible to make a good Black Friday. I reinforce that the margin is to the industry, not retail.

What are the biggest mistakes that retailers make during the promotion?
PE – There are several points that we need to be observe. It was very common that websites fall by up to three hours. Calculate the loss. Fraud actions are also very important. In the same way that the consumer is interested in Black Friday, malicious people will also enjoy the madness to commit fraud. Another issue is the logistics. The composition of free shipping, product-freight-delivery needs to be studied in order to not lose money. If, the competitor is practicing a determined price and is burning its margin, the others do not have to do the same. There are other ways to sell. The consumer, it is important to remember, is not looking for discount on a particular product, then you can offer a kit with two items, a higher margin and other lower margin. Together they enable the retailer to offer good discount without sacrificing its outcome.

The Black Friday is very close to Christmas. Does the dates compete one each other?
PE – It is noticeable, especially in e-commerce that the sales grow in these two moments, however, they decrease before and after Black Friday. With the concentration of sales in a single day, it ends, naturally, stealing a bit of Christmas opportunities, especially in the online, where people rush in to take advantage of the discount and not to take the risk of receiving the product late. The most interesting aspect regarding Black Friday is that unlike Christmas, it has the much higher purchase ticket. It is when the consumer spends more, including in relation to other dates, such as Mother’s Day. The people take the time to buy products for themselves and not to give away, which is proven in research. We identify high in sales of televisions, refrigerators and other value-added items. Gifts are cheaper and have the lowest ticket.

So, one date does not take the role of the other?
PE – That is hard to happen, but it is natural, because we are talking about just one pocket. Of course, if consumers buy on Black Friday, they will have less money to spend at Christmas. This is the challenge for retailers: sell promotional items during the day and leave the product with the total price for Christmas. One of the differences of Brazilian promotion in relation to other countries is the wide range of top products. Outside, the companies sell stock to spawn and do not offer the latest released mobile phones. They offer older versions with interesting prices. In Brazil, due to the novelty that Black Friday is, the opposite happened. In Brazil, sells everything from top launched products to previous versions. It only exists here, but it is natural due to the new promotional date. Over time, companies and consumers will maturing and realizing that Black Friday is for products a little older, but with a super special price.

The start of Black Friday was surrounded by controversy, including price makeup complaints. Was it left behind?
PE – Certainly, there was maturing, both, by the consumer and retail. If we follow the complaints curve from the first year, the fall is absurd. This happened for two reasons: the Brazilian understanding of what he can look for and what he will find on Black Friday, and based on that the retail began to be prepare. In the early years, no one expected what was Black Friday: a positive shock. Today, what I hear more is “I sell in one day what I use to sell in a month”. Think the necessary structure and technology involved behind it. There was also the preparation of all players: manufacturer, supplier, logistics, technology, businessman and entrepreneur. This translates into fewer complaints. A few years ago, we also launched the Cool Black Friday. The idea was to separate the companies that did an amazing job.

Is there any product that has more appeal on Black Friday?
PE – There is room for everything. We must seize this moment because on Black Friday people go to the shops or malls to see what is nice to buy. We do not have it at other times, and to achieve this result, you need to spend lots of money in communication and marketing. Even if you save investment in this area, you can apply to give good discounts.

Other dates were designed to balance the retail calendar, especially in the first half of the year. Are they promising?
PE – These initiatives do not need to have the same proportion of Black Friday, for every movement that encourages and brings relevant promotions is interesting. The Brazilian likes discounts. Everything that meets this is healthy and move the wheel of consumption. The big challenge in the coming years is to try other dates similar to Black Friday in low purchase moments, to do not have this disproportion, which is happening today in Brazil, when the last three months of the year account for nearly 70% of annual revenues. It is important to have balance.

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