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Online shopping has boomed under lockdown, are physical stores still needed?

The coronavirus pandemic has accelerated the adoption of e-commerce by at least 5 years, but will consumers ever go back to physical stores in the same way?

As shopping malls reopen in Brazil the crowds outside the Catarina Fashion Outlet suggest physical stores are far from finished. A retail expert covering the Andean cone agrees, “Physical stores will continue to exist as people need human contact but the trend is that malls and stores instead of selling products will transform into ‘lifestyle experiences’ and push purchasing online.”

A Mexican luxury brand buyer had a more nuanced view, “Strategies to retain consumers will vary greatly depending on the brands and even the city. For example, in Mexico City, many people were already shopping online but in Monterrey, due to its proximity to the United States, people preferred to cross the border and do their shopping there. I don’t think that will change.”

“It’s nice to have things brought directly to my house. After this pandemic, I will keep going to the stores but I’ll also continue buying via WhatsApp.”

High net worth individual, Mexico.

Obviously, there has been a considerable increase in remote and online shopping, but Mexicans continue to seek personal experiences and you see it at all levels, that explains the boom that occurred after the opening of the shopping malls but also how the wealthy have continued to shop during the pandemic. Brands like Louis Vuitton and Gucci have connected directly to their customers on WhatsApp to offer them the latest arrivals.

The use of WhatsApp as a sales strategy is not new but what has changed is that some retailers are using the platform to connect wealthy clients directly with personal shoppers and link everything including payment and delivery. One high net worth individual in Mexico told us, “I’m a VIP client from Palacio de Hierro and from SAKS. In SAKS I am part of ‘Salon Black’, so if I want to buy something, I just message them and they bring it to me. For Gucci, even though they are not part of Palacio de Hierro, they message me and send things to my house with a card machine. I don’t buy online.”

“High-end customers are spending like crazy, curing their [pandemic] stress with retail therapy.”

A luxury brand buyer.

Interestingly, Brazil’s Central Bank recently suspended a trial of WhatsApp’s new payment feature. But even if the seamless payment function doesn’t return to the app, it won’t stop the wealthiest among WhatsApp’s 120 million Brazilian users from messaging their orders out to personal shoppers to have luxury goods delivered and fitted in their country mansions.

Luxury retail is set to embrace some change as a result of the pandemic, but the personalised experience sought by wealthy customers will remain and eventually people will once again crave human contact.

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