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Retail / Ecommerce

Know thy customer


Marketers are no doubt aware that Continuous Commerce™ in mature markets such as the U.S. and U.K. is being fueled by the penetration of smartphones and the proliferation of eCommerce apps that take on-line shopping to new level. But here’s something that might surprise you: In some fast growing but far less developed markets, Continuous Commerce is not such a new concept.

Take, for example, economies such as those in India, where informal trade accounts for more than 40% of retail transactions, and residents can find goods available day or night. Open markets there already offer a social atmosphere and highly personalized experiences, so modern retailers expanding into markets in India are likely to find that propositions such as convenience don’t always translate. If a mom-and-pop shop owner is already willing to run a bar of soap over late at night, what could be more convenient? Therefore, availability and instant delivery might not have the same value in places practicing their own form of social commerce.

That said, with countries such as India, Brazil, and South Africa experiencing rapid marketplace change, opportunities abound. The acceleration of mobile is a key factor, particularly in its ability to connect individuals to the larger world.


Cell Phone User
Durban, South Africa

In the past, consumers in less-developed markets were shopping one day at a time and were largely unable to envision a different life. Being connected makes tomorrow better than today for a growing percentage of the world’s population. Beyond the social and political ramifications, this trend promises to make a tremendous impact on retail marketplaces.

In 2008, while we were visiting a Pick n Pay in Soweto, a manager shared that he texted deals to his customers on items such as maize. At the time this concept was just beginning to take hold in the United States—in most cases unsuccessfully.

This Pick n Pay Manager began texting his customers in Soweto about price cuts in 2008.

This Pick n Pay Manager began
texting his customers in Soweto
about price cuts in 2008.

But in South Africa, the savings to low-income consumers had a huge impact on their ability to buy something else, and thus they didn’t consider the intrusion, which was a sticking point in the West, to be much of an issue.

The mobile wallet is also reshaping how consumers in developing economies can earn, shop, save, and reduce personal risk. This innovation allows for a new type of currency flow that can benefit both shoppers and retailers. M-Pesa in Kenya may be the best example; the mobile-based money transfer and microfinancing service is now the means through which 19 million shoppers (two-thirds of Kenya’s adults) pay at over 50,000 retailers (called agents). It allows a husband working in an urban location to tap earnings to his wife in their rural village hundreds of miles away so that she can make purchases.

Computers were slow to proliferate in countries such as Brazil, where infrastructure was limited. But mobile was a different story, leapfrogging the Internet and providing access to social-networking sites through handheld devices. Retailers such as Magazine Luiza have launched social-buying sites that match the enthusiasm for social networking with the high penetration rate of direct sales.

Brazilian Retailer, Magazine Luiza,
created a social commerce site to
allow friends to share products they
like and enjoy a commission
as items are purchased.

Their concept was Magazine Voce (Your Store), which allows Facebook users to select up to 50 of their favorite items. If a friend makes a purchase based on one of these recommendations, Magazine Luiza fulfills the order and pays the referring friend a commission.

As mobile owners, retailers, and brands all turn toward these new horizons of Continuous Commerce, there are some guiding principles to consider.

  • It’s critical to take a long look at the macroeconomics of a region and understand the underpinnings of volatility and growth.
  • Understand that where technological advancements seem to be lagging in developing countries, simple applications that solve big issues can be world beaters.

In fast-growth markets there can be great polarization between income levels and age groups. The universal questions in retail are: Who shops my store, and why? Answer these questions in advance for any new eCommerce platform or mobile app. Integrating content and social aspects into a retail experience may suit some shoppers more than others.

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