February 25, 2022
5 min read

How COVID-19 Accelerated Retail Innovation in LATAM

The shutting of physical stores as a result of COVID-19 had effects across the globe. For the Latin America (LATAM) region, the pandemic was a catalyst for traditional shoppers to make a digital purchase for the first time. Consumers quickly turned to ecommerce as the shopping channel of choice, with retail ecommerce sales in Latin America growing 63.3% in 2020 to $104.60 billion.

Ecommerce has become an effective method for shoppers to get the products they need in LATAM, similar to the U.S. and Europe. Across the globe, retailers realized that they needed to prepare themselves for a future of omnichannel retail, and ensure that the path to purchase creates a seamless customer experience.

Rapid digital transformation

To successfully convert traditional brick-and-mortar consumers to shop online, establishing trust is a critical factor. Over the course of the pandemic, LATAM retailers have invested in either creating or updating online websites and mobile apps to improve the user experience.

This includes making a website or app easily navigable, as well as more personalized. For example, a grocery retailer can offer a "one-click add to cart" function, as well as the ability to search for items by department. Apparel retailers can highlight sales on their homepage, and share recommendations for items that have similarities in color, size or fabric. These strategies help the consumer find exactly the right product they're looking for, faster. Companies like Liverpool are great examples of this, as its webpage is enticing and easy to navigate.

According to the Mexican Association of Online Sales, from April to June 2020, ecommerce retailers witnessed a 90% increase in use, which reveals that consumers are receptive to online channels that make the shopping experience more convenient.

Omnichannel payments strategies

The point of sale is a critical cornerstone of the customer experience. For both digital and physical options, these channels can benefit from digital payments.

Credit and debit cards were responsible for 71% of ecommerce purchases within Latin America in 2020, making them the dominant digital payment method throughout the region. Many avoid digital payments in fear of electronic fraud, with 80% of ecommerce users in Mexico citing concerns. A solution that offers secure payment processing can ease consumers' concerns as they adopt these new payment options.

Offering additional payment options – including contactless – are opportunities to further build loyalty. With a single point-of-sale platform, retailers access uniform data management that can provide insights across channels to improve personalization in an end-to-end shopping experience.

It's time for non-digital native companies to catch up

LATAM is past the point of no return when it comes to digital adoption. For many LATAM retailers, before 2020, they lacked an online presence that was able to meet the demands of today's consumers. Now, to be successful, they require innovative solutions that incorporate omnichannel retail.

Learn more about GK's solutions and the industries to which we're bringing omnichannel innovation.