Last updated: 2 August 2016
In recent years, some of the major retailers of home improvement products in Brazil have invested in e-commerce as a complementary sales channel to physical stores.
In this article we will present an overview of the home improvement e-commerce sector in Brazil and list common practices adopted by the country’s major online stores.
Retail of Home Improvement Products in Brazil
Home improvement represents one of the largest sectors in retail in Brazil, with an accounted revenue of BRL 56 billion during 2015. Unlike other sectors such as fashion and electronics, which have experienced an increased adoption of online sales channels by local customers in recent years, home improvement items have remained mostly commercialised in physical stores. Factors such as the lack of confidence in buying certain materials without checking their quality in person, along with difficulties and the high cost of shipping certain product categories can be related to the preference for physical retailers by Brazilian customers.
There are notable examples of home improvement e-commerces that have succeeded in the Brazilian market despite these conditions. This is the case of the store MadeiraMadeira which adopts a business model similar to a product marketplace and specialised stores such as steel products dealer Fabrinox. Along with competitive pricing, these stores are able to appeal to the local consumer audience through offering products that are not available at large home improvement retail chains.
Although Brazilians have been until now reliant on purchasing directly from e-commerces of home improvement products it is undeniable that online channels have begun to take part in the strategy for the country’s major retailers in this sector. Market reports indicate the potential for the usage of online channels not only for sales but as complementary tools to the sales from physical retailers.
Data from a recent report from media outlet Grupo Revenda, for example, indicates that over 70% of upper-class customers of construction materials in Brazil access e-commerces prior to purchasing these types of products, while only 20% of these customers purchase home improvements items online.
With the goal of catering to these online-focused customers, major retailers in Brazil such as stores Leroy Merlin, C&C and Telhanorte have invested substantially in the development of proprietary e-commerces in the latest years, and their practices indicate an emphasis on omnichannel strategies that combine the advantages of both physical and online channels.
Shipping and Return Options
One of the main challenges for earning the confidence of Brazilian consumers for home improvement products is providing appealing options for shipping and returning products. It is common for a considerable number of consumers to require products to be delivered as rapidly as possible due to the time constraints of construction projects, and most of them are not interested in dealing with the increased costs and logistic challenges of having large sized materials delivered directly to their sites. Currently none of the e-commerces from major retailers of home improvement products offer free shipping when delivering directly to customers households.
One increasingly popular solution adopted by Brazilian retailers is allowing for products to be purchased online and picked up at one of their physical stores. With this delivery method, not only can shipping costs be lowered due to the usage of the stores internal logistics system but the time needed for delivery can also be significantly reduced, in some cases requiring only one day for products to be made available for pickup. It should be noted that for retailers such as Telhanorte this option is only available for a limited part of the Brazilian territory, which is the case for cities in the state of São Paulo.
Product Returns at Physical Stores
Another option designed to offer increased convenience to customers is allowing for products to be returned or exchanged at physical retail locations. This option presents a reduced amount of time necessary to return products when compared to sending them by mail or having them picked up at the customer’s residence. It also allows for dissatisfied customers to quickly replace their purchased products with others and proceed with their construction projects with minor delays.
Product Categorisation and Complimentary Offerings
Home improvement retailers usually deal with an increased amount of product types when compared to other retail sectors, with some Brazilian e-commerces reporting the offering of several thousands of SKUs on their websites. Due to this factor, local e-commerces have invested in the implementation of customised search engines and categorisation systems that allow for online customers to quickly and easily find the exact product they are looking for.
Another common strategy for online retailers is the inclusion of a section of complementary items on product pages. This feature, which is also adopted by other e-commerce segments, is especially well-fitted for home improvement stores due to the fact that a large amount of their products require accessories such as bolts and construction tools or other complementary items in order to be installed correctly.
In brick and mortar stores it would be the role of the sales team to indicate the need for certain items for the installation of products customers are purchasing, and complementary product sections are able to provide a similar experience in e-commerce environments.
Focus on Decorative and Home Utility Products
Brazilian online consumers have become increasingly interested in the purchase of decorative products. According to research from market analyst E-bit, the segment of home and decoration items represented 9% of all online sales in 2015, and several stores specialised in this segment have been created over the last few years.
With this trend in mind, some of the major online retailers of home improvement products have promoted the sales of decorative items as a path to increase their conversion rates. These e-commerces also focus on offering certain product categories related to home utilities over the sole offering of construction materials, catering to niches such as the one of customers that purchase decorative and home utility items and deliver them as gifts to friends and family members.