Department Stores in Chile

PROSPECTS

Overconfidence from retailers leads to continued discounts in 2018

Department stores had high economic expectations due to a new presidential term; however, the economic reactivation of the country was slow during 2018. The positive performance in previous years, combined with a low exchange rate at the beginning of the year and a high influx of tourists during 2017 (including Argentinean shopping tourists), led retailers to increase their product inventory, thinking that with a positive economy people would acquire more goods.

Chileans are changing their mentality towards clothing

Chileans are changing their mentality towards the consumption of clothing. They used to frown on private label lines, and sought traditional and aspirational brands.

Flow factors that impact sales in department stores

Shopping centres in wealthy areas of Santiago experienced lower flows of traffic in 2018. Fewer Argentineans travelled to Chile for shopping, and the boom of on-demand services turned people away from visiting such stores, negatively affecting sales.

COMPETITIVE LANDSCAPE

Falabella sets the bar high for e-commerce

After the announced arrival of Amazon, retailers understood that they needed to act and prepare for the competition. Even though during the second half of 2018 Amazon decided to establish its distribution centre in Colombia instead, the Chilean market had already become more dynamic in terms of acquisitions and partnerships, and e-commerce grew as retailers began to provide a better service.

Paris becomes conscious of the environment

Paris is the first department store that will stop printing catalogues, starting from one of the biggest sales events of the year, Christmas. The brand has been proactive over the years, with environmental campaigns such as “no mas bolsas por favor” and “no imprimo mi boleta”, which encouraged consumers to stop using plastic bags and stop having their receipt printed.

The importance of loyalty programmes in department stores

All department stores are associated with credit cards, which benefit customers when used. These benefits include discounts, payment in instalments and loyalty reward programmes.

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