E-commerce is slowing, but “figital” will continue to dictate the course of retail

This year, e-commerce shows a slowdown compared to the strong growth of 2020 and 2021, but this loss of breath does not prevent the retailer from continuing to bet on digital solutions. This time, however, the focus is on online integration with physical networks, in the so-called “phygital”.

According to data from NielsenIQ and Ebit, e-commerce generated BRL 118.6 billion in the first half of 2022, a growth of 6% compared to the same period last year. In 2021, the expansion amounted to 27%, in an annual comparison.

Sales made through e-commerce account for almost 13% of total retail sales. The share can be considered small compared to countries like China and the United States, where the penetration is more than double that recorded in Brazil.


In the coming years, Brazil is expected to overcome the limit of 20% of total electronic commerce, but this will not be done at the expense of sales registered through physical networks. On the contrary, the goal is that these two structures walk side by side, constantly strengthening the “phygital” model.

Victoria Minatto, an analyst at Eleven Financial, says physical stores will continue to be present, but increasingly integrated with e-commerce. “Stores do not disappear, but become distribution centers or showroom. Some may even optimize spaces, looking for smaller stores, but will continue [existindo]”, he says.

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There are many implant models for “phygital”. The store can be used as a mini distribution center, reducing delivery times for digital purchases. The customer can also pick up the product near home, freeing himself from delivery, and there can only be one store showroomamong other things for product presentations, launches and campaigns focused on the consumer experience.

Lojas Renner and Hering, for example, are already testing stores in these new models. The customer can try on the clothes, but the product is delivered to the home address (or picked up later in the store).

“It is a compact store, with lower operating costs and lower rent. And it becomes a distribution center. Margins are getting better. This is the movement we see,” explains the analyst.

This integration comes at a time when the number of retail stores is increasing, more than offsetting the closures that occurred in the first year of the Covid-19 pandemic.

According to Alberto Serrentino, founder of Varese Retail consultancy, this integration is something continuous, even due to technological innovations.

Seeking synergy between the two structures, retail is beginning to prioritize efficiency, working better with inventory. In addition, there is now more data on customers’ spending habits, which makes it possible to make more assertive offers.

This integration also changed the company’s commercial policy. If before the focus was on digital growth, with more competitive prices and free shipping to attract new consumers, now rationality is the rule. “Interest rates and lower growth have pushed companies towards greater rationality. The aggressive growth agenda has been replaced by optimization, which is the search for greater profitability,” Serrentino points out.

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In the year to July, Brazil recorded the opening of 94,861 stores. The CNC (National Confederation of Commerce) number takes into account the Ministry of Economy’s data on active CNPJ, excluding MEI (individual microentrepreneur).

Fabio Bentes, senior economist at the entity, explains that it is not possible to measure how many of these stores operate only physically or digitally, precisely because of this increasing integration. “E-commerce is helping to grow the number of stores. There is no longer any reason to think separately. The two structures are more intertwined than ever,” he says.

It is expected that the number of stores opened will not exceed the performance of 2021, when 203,931 were opened. On the other hand, the more than 300,000 stores opened between 2021 and July 2022 far exceed the 31,800 closed during the first year of the pandemic.

Brazil has a total of 2.5 million active commercial establishments.

This higher number of stores, however, does not mean that retail sales will increase. The CNC revised its growth expectations for 2022 from 1.7% to 1.3%.

The slowdown is linked to the cycle of interest rate hikes in Brazil. Selic is at 13.75% per annum and is expected to remain high until mid-2023, raising funding costs and pulling money away from spending.

“The pace of retail expansion is slow. It is related to the labor market. Unemployment even fell, but the real average salary was lower,” the consultant points out.

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