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The global fashion business journal

19 Jul 201903:28

2018, the year Latin American giants succumbed to e-commerce (at last)

Whilst Retail Apocalypse was taking over the northern hemisphere, Latin American fashion giants reacted in time. They started to accelerate their omnichannel strategies taking advantage of the low penetration that titans like Amazon have, for now, in the region. 
27 Dec 2018 — 10:00
María Bertero
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2018, the year Latin American giants succumbed to e-commerce (at last)

 

 

Purchases, new e-commerce platforms, omnichannel and in-store technology. Last year, the fashion giants of Latin America refined their innovation to match the behemoths of the United States and Europe. Whilst Inditex announced that it would be made available to all countries around the world by 2020, players like Falabella or Liverpool accelerated their e-commerce expansion processes.

 

The imminent arrival of Amazon to Chile and the giant’s ahead start of operations in Colombia raised the alarms of the biggest department stores groups in Latin America, which had been getting ready to face the titan’s landing in the region for some time. The most recurrent speeches of Latin America’s top retailers in 2018 was that of “being a 100% omnichannel company” and “our online store will get the highest revenue”.

 

Falabella took part in one of the biggest M&As of the year after acquiring the pure player Linio, a Mexican-born e-commerce platform present in eight markets around Latin America. The Chilean department stores group acquired it for a price of 138 million dollars. Ever since then, Falabella has underpinned its logistics structure with a new warehouse in Santiago de Chile, the introduction of Google Play in its local market and the previously mentioned merge with e-commerce platform Linio. In 2019, all offers included in Falabella’s department stores and Sodimac’s shops will be available in the Linio marketplace.

 

 


 

The Chilean group’s commitment to improve its omnichannel experience has been on the work for several years. By the end of 2018, the company linked to the Solari family opened up a distribution centre in the city of San Bernardo, in a smallholding constituted by 47,000 square metres of selling space. After a one hundred million dollars investment, the new centre enables Falabella to store eight million articles and to manage its stock in a more nimble and automatized way.

 

Liverpool, another Latin American giant in the department stores business, has also fully committed to the online channel all through 2018. The Mexican company decided to reset itself and reordered all its network of stores to keep on gaining profitability. In September, Liverpool announced the closure of Fábricas de Francia, the department stores chain born and raised in Jalisco which it acquired at the end of the eighties. In 2019, Liverpool will turn the Fábrica de Francia centres into warehouses for its homonymous chain as well as for Suburbia.

 

The decision of absorbing Fábricas de Francia was made two months after Liverpool carried out another strategic move. The Mexican group announced in July the release of an e-commerce platform for Suburbia, the low-cost fashion chain it acquired from Walmart in 2017 for a price of 15.7 billion Mexican pesos (844 million dollars).

 

 

Experiential and technological stores

Besides spreading all over the Web, several of the main Latin American fashion groups bet on improving purchasing experiences in-store. El Palacio de Hierro set in motion a new space inside one of its department stores in Mexico City specialised in wellness, with new offers from sports fashion brands and athleisure, where besides shopping, the store offers other complementarian services.

 

The Brazilian giant of fashion distribution gave a twist to its network of stores too. The company released a new concept of store which put together technologic gadgets, smart mirrors and click and collect points all inside the shop. The Costa Rican department stores Ekono premiered, too, a new format for its stores through the implementation of augmented reality and through the fact that clients can have all information they could possibly find online, inside the stores.

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