Business

Reserve fund and structured e-commerce: how would retailers wish they had prepared for COVID-19 in Brazil?

A survey made by the scale-up Area Central has some answers to this

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  • Currently, 31% of the retailers surveyed by Area Central said that their employees are all working from home, and 28% said that they are maintaining face-to-face work for a small part of their employees;
  • Their biggest concern at this moment is the financial health of their associated stores (34%), followed by non-compliance with commercial agreements with suppliers.

In early April, the Area Central, a scale-up focused on business center management tools, carried out a survey with associative retail network managers to see how much they were affected by the COVID-19 crisis, which strategies they created to overcome the moment and how, after all, they would have liked to be better prepared for this.

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The company interviewed businessmen responsible for 40 retail chains, which bring together about 3,700 stores, mainly in the South and Southeast regions of Brazil. In addition to the growth in sales in some segments, such as supermarkets (44.34% between the first and the second half of March, and 1.77% in the first half of April), and the fall in others, such as furniture and appliances (33.91% between the first half of March and the first of April), the survey also asked Area Central customers about what the chains and their stores’ owners could have done to prepare in advance for the crisis.

They replied that they would have liked to:

  • have implemented their stores’ e-commerce and social media sales before;
  • followed the scenario in other countries, anticipating the purchase of cleaning materials, hand sanitizers and PPE equipment;
  • have a reserve fund to face the crisis with ease.

“We noticed that our customers were not prepared for the COVID-19 pandemic, they did not have an active crisis plan, so we were not so surprised by the responses. What really caught our attention were the responses about to what they should have given more attention, to face ‘this scenario more easily’, which were related to being more online – accelerating the digital transformation process–, having more structured financial indicators, having employees and associates more professionally trained to face adversity, and have more proximity with the other retailers to help each other in these moments, “said the CEO and founder of the Area Central, Jonatan da Costa, to LABS.

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The scale up serves businessmen from the same retail segment who come together in an association to share costs and have more power to negotiate with suppliers. Currently, 31% of these networks are working in the home office, and 28% maintain face-to-face work for a small part of their employees. The biggest concern of entrepreneurs at this moment is the financial health of the associated stores (34%), followed by non-compliance with commercial agreements with suppliers.

Approximately 44% of respondents expressed their concern about the commitment to maintain the staff and not to lay off employees.