Black Friday 2020 must be the biggest in history; Via Varejo is focus, analysts say By


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By Ana Carolina Siedschlag – This year’s Black Friday, which takes place next Friday (27), should surpass the 2019 record and foster the highest sales volume in the history of the event in Brazil, in the wake of the e-commerce force during the pandemic and the retention of a large part of purchases at the beginning of the year, say analysts, investment banks and specialized consultants.

According to them, salary cuts, layoffs and physical store closings at the height of social distance in the country, between March and June, kept most consumers’ purchases focused on essential items, such as food and pharmacy. Now, those who have spent the past few months holding expenses on clothing, shoes, electronics and appliances should take advantage of the promotions of the commercial day to resume consumption at the beginning of the year.

β€œThe fact that people stayed right at home took away the appetite for consuming clothes or shoes, for example. Many things were postponed and companies such as Vulcabras (SA :), Grendene (SA :), Arezzo (SA πŸ™‚ had a sharp drop in physical sales figures ”, said Mario Mariante, an analyst at Planner Corretora. “People put the brakes on seeing uncertainty ahead, but the counterpoint was that, out of necessity, e-commerce exploded.”

The retail solution

In the third quarter of this year alone, Brazilian e-commerce recorded 79.2 million online purchases, a nominal growth of 76% in comparison with the same period last year, points out a study by the consulting agency Neotrust, in partnership with the movement Compre & Confie . In all, more than R $ 33 billion in sales revenue were generated during the period, an annual increase of 85%.

BTG Pactual (SA πŸ™‚ analysts said in a report this Tuesday (24th) that they see the “persistent” advance of online commerce as a legacy of the pandemic for years to come. “The third quarter showed no surprises in the numbers, which had been improving since the previous period, but they showed strong signs of the recovery path ahead”, they said.

Considering only Magazine Luiza (SA :), Via Varejo (SA πŸ™‚ and B2W (SA :), the biggest players in the segment listed in the Brazilian market, the gross volume of goods from virtual stores, or GMV, in the acronym in English, grew 112% in the third quarter compared to 2019, and the bank’s expectation is that this year’s Black Friday will boost consolidated numbers.

For the sector as a whole, the estimate of the Neotrust study for next Friday is 77% growth in online sales compared to 2019, reaching the mark of R $ 6.9 billion.

Black Friday Stars

The leaders of e-commerce in Brazil – the Argentine Mercado Livre (NASDAQ πŸ™‚ (SA πŸ™‚ and the Brazilian Magazine Luiza, Via Varejo and B2W – will be more prepared than ever for the event after the strong investment in technology resulting from the impulse of online sales due to social distance measures.

Among the largest retailers in the country, Via Varejo has been stronger than in the last year, with improvements in the application and focus on digital sales throughout 2020. In 2019, the company had revenues of R $ 1.1 billion on the date, with 48 % of sales coming from digital channels – this still has some technical problems that hindered part of the performance.

β€œIn the last year, Via Varejo arrived late, took a long time to get the application in order and had internal issues that impacted deliveries. Even so, they delivered record revenues ”, says Mariante. According to him, the mass of customers registered until the third quarter of this year indicates that the company will have a “very strong” Black Friday.

For the leaders Magazine Luiza and Mercado Livre, the expectation is to maintain status, with a focus on improving deliveries. β€œThese companies have made a huge investment in logistics, to speed up transportation, or are putting options to withdraw in stores. This is to improve delivery times, which are the major decision factor of the customer at the time of purchase ”, says Pedro Serra, analytics manager at Ativa Investimentos.

Expectation with clothing

Among clothing and department retailers in Latin America covered by the Morgan Stanley (NYSE πŸ™‚ – the Brazilian Lojas Renner (SA :), C&A (SA πŸ™‚ and Cia Hering (SA :), the Chilean Falabella (SN πŸ™‚ and Mexican Liverpool (MX πŸ™‚ -, online sales for the third quarter grew fourfold on an annual basis, in line with the second, analysts at the bank said in a report on Wednesday (25).

The segment was most affected by the closing of stores, they say, and despite the reopening in the third quarter, sales levels remain well below pre-pandemic. C&A had a 4% increase in physical sales in September, while Hering had a 5% increase in October.

β€œDue to the pandemic, there was an acceleration of the digital channel for the clothing category, which was little explored in Brazil. This habit of buying online should decrease with the reopening of stores, but surely a good slice will remain, ”says Serra.

With the return of physical purchases, the analyst believes that the omnichannel strategy should be the major focus of companies in the post-pandemic. The strategy of integrating all sales channels, offering the same experience in all of them, was one of those that grew the most in the third quarter. β€œThe person will start shopping on the cell phone, try it at the store and finish the purchase on the computer. This is an integration that has already started and should gain strength ”, points out Serra.

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