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Internet Use Affects Half of All Retail Purchases in Brazil


December 3, 2015 - Sao Paolo, Brazil

The Internet is a much more pervasive force in Brazil than is normally assumed, and one that marketers and retailers must contend with, according to a new, comprehensive study of digital's impact on consumer behavior by The Boston Consulting Group's Center for Customer Insight. While online sales account for only 4% of total retail sales in Brazil, the Internet influences more than half of all connected consumers' retail purchases. Nearly all connected consumers -- some 106 million people, accounting for more than half the Brazilian population -- use the Internet at some point for some purchases.

Already big, digital's impact on consumer commerce is set to get much bigger in the next few years, according to BCG research, reported in an article released today, Shopping in Brazil: The Influence and Potential of Digital. Digital and mobile technologies affect each stage of the purchasing journey -- prepurchase, purchase, and postpurchase -- differently, and marketers and retailers are looking at big changes in how and where people buy. With the online experience playing a role in almost three-quarters of all product discovery activities and in nearly two-thirds of all research activities, the Internet is substantially influencing consumer behavior, making the various phases of prepurchase more complex and the overall consumer journey harder to predict.

"Digital's influence varies depending on the type of consumer, the product category, and the state of regional connectivity," said Silvia Sonneveld, a BCG partner and a coauthor of the study. "This influence will only grow as more consumers become connected and online information, sharing, and purchasing propositions become increasingly attractive."

BCG's research, which included both a quantitative survey of some 2,500 Brazilians and in-depth interviews with another 80 consumers about digital's influence on their shopping behavior, indicates that distinct categories of connected consumers are already taking shape. Five segments, distinguished by digital maturity (the amount of time spent online), demographics, and income, are emerging. Each has distinctive characteristics and displays its own particular online shopping patterns and concerns. For companies to engage with consumers in each category throughout the purchasing journey, they need to understand the differences.

Two segments, "modern married" and "living in the new era," should be of particular interest to Brazilian marketers and retailers today, especially those in product categories with high digital intensity or high levels of e-commerce. Together, these groups of sophisticated digital consumers make up 25 percent of the population -- almost 50 million people. They have been buying online for five years or more and they value the selection, convenience, and interactiveness of the online experience. As income levels rise and as more people come online and their digital maturity increases, BCG expects the ranks of these two segments to swell significantly.

The research found that digital influences the shopping journey in different ways, depending on the product category involved. At one end of the spectrum are big purchases that people want to get right -- computers, mobile devices, large appliances, and consumer electronics, for example. The Internet influences multiple activities in the early, decision-making stages of the purchasing journey for these products -- before consumers go to the store or go online to buy. Companies and brands that lack strategies for engaging consumers across channels at these early stages are very likely losing out.

At the other end of the spectrum are products that are purchased repeatedly, such as health and beauty aids. Consumers may learn about such products from offline or online sources, including social media. They often make their first purchase at the store (in order to see a lipstick or nail polish color, for example) and then use online merchants for repeat purchases. The purchase decision, and the purchase itself, are shaped by a mix of online and offline channels.

"Marketers and retailers in Brazil need to be prepared for an increasingly digital and omnichannel future," Sonneveld said. "The challenge is to engage consumers along a seamless omnichannel shopping journey. The first critical step is understanding how your consumers shop -- both generally and in your category -- so you can meet the particular needs and situations of each category of user at each stage of the pathway."

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About BCG's Center for Customer Insight
The Boston Consulting Group's Center for Customer Insight (CCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG's various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCI is sponsored by BCG's Marketing & Sales and Global Advantage practices. For more information, please visit http://www.bcg.com/expertise/institutes/center-customer-insight.

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 82 offices in 46 countries. For more information, please visit bcg.com.

About bcgperspectives.com
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.

The Boston Consulting Group
Eric Gregoire
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
gregoire.eric@bcg.com

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