As economic conditions in Latin America stabilise and improve, spending will begin to recover and retailers will need to rethink their value propositions for consumers with more acquisitive power. Retailers will need to think beyond price about how to continue to attract consumers. Euromonitor identifies three megatrends that will become increasingly important over the next five years for meeting the needs of and building relationships with shoppers.
Significant economic slowdowns or recessions in the major economies of Latin America were the biggest factors in retail in the region over the past five years. High inflation and weak exchange rates eroded spending power for many consumers, leading to shifts in shopper behaviour, including trading down on non-essential purchases. As economic conditions stabilise and improve, spending will begin to recover, and retailers will need to rethink their value propositions for consumers with more acquisitive power.
Connectivity and comfort with online activities, including shopping, gathering information, and communicating, have changed the path to purchase for shoppers in the region. While the vast majority of retail sales in Latin America continue to take place in physical stores, in-person purchases are increasingly influenced by digital marketing and online research. Further, consumers expect to be able to make purchases in the ways that are most convenient for them. This provides an opportunity for brands to build a relationship with shoppers.
Consumers globally are increasingly prioritising experiences instead of material items, and health-oriented products and services are a big beneficiary of this shift. While not applicable to all consumers, many shoppers are increasingly health-oriented, and seek brands that help them meet their health and wellness goals. This provides another opportunity for retailers and brands to strengthen their positioning with consumers.
Habits built during recent economic crises in Latin America will not disappear overnight. Many, including a heavy scrutiny of the value of non-essential purchases, will linger. More relaxed shopper habits will also begin to emerge, however, such as a greater interest in occasional indulgences and small luxuries. As the number of dual-income households increases, convenience will also be a factor increasingly viewed as valuable by shoppers in the region as time becomes a more scarce resource.
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page