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Think Small
How a trend takes shape and how much the song Take It For Her was a premonition of a movement.
That ship is already leaving
And it carries a crowd
Take It For Her — Criolo
Go back for a moment to the first article in this series, A Ship That's About to Leave, and notice when we mentioned that the industry was looking for businesses in hot areas, areas with a high concentration of people with the consumption profile of their products.
Now go to the second article in this series, Delivery Is Not a Defendant, and notice that now industries are opening their own points of sale in these hot areas.
The impression that remains is that this entire retail revolution is limited to areas of high demand and that the rest of this huge Brazil will continue to be served by small markets, as it always was.
Certainly the revolution will not stop in upscale neighborhoods, but it will not be in its current format that it will reach the suburbs.
Himself Rappi, when she claims to be going to smaller cities, points out Ribeirão Preto and Londrina as targets, there is still a long way to go before the current structure reaches the masses.
To point out the path that the revolution can take, let's turn to the matrix developed by Professor Carlota Prerez, which explains the stages of the cycles of technological revolutions.
Installation periods and technological maturity
A new infrastructure allows business to be conducted in new ways, such as the set of resources that gave rise to the current revolution:
- Cell phones with GPS
- Fast mobile internet
- Affordable credit cards
- Closure of physical stores during the pandemic.
This technological acceleration attracts the interest of capital, which seeks to consolidate the leaders of this new scenario, leading to a frenzy.
With Diversity of delivery apps competing for a limited market, investors encourage cash-burning for the rapid formation of an active user base and operational scalability.
The Winner Takes It All.
The previous infrastructure falls into disinterest, For example, the current shopping mall crisis.
The Micro Fulfillment Center formats of retail chains and factory stores in neighborhoods are in the consolidation phase, which is when good practices are already established and return expectations are more reliable.
Between installation and maturity, there is an “accommodation gap”, a period in which the search for cash-burning growth ceases to be a priority and the focus is shifted to companies with consistent operations, those that generate cash.
This accommodation is also known as “Bubble Burst”, when many companies declare bankruptcy or are incorporated by the remaining companies.
A New Technological Breakthrough Scenario
As the trends described so far take hold, a new infrastructure is beginning to take shape.
Its aspects are:
- Crisis of the formal economy
- Unemployment
- 5G Internet
- New Franchise Law
More people will have to seek paid activities, without formal employment being an option.
The internet reaches class C, D, and E homes via cell phones, and few have computers. 5G internet will bring speed to these devices.
The new Franchise Law, Among Other Updates, confirmed that the franchise agreement does not establish an employment relationship or a consumer relationship.
Making the franchise the ideal instrument for the formation of business networks.
The super fragmentation of delivery
As things are getting organized, we can imagine a world in which we are going to shop online with super fast deliveries coming from some super app with its Dark Stores or from a store-warehouse close to us.
This worldview separates providers from consumers, imagining large companies, consolidated in their delivery capacity, having bargaining power with industries because of their dominant size.
On the other hand, consumers, hostage to the apps that won the fight, hunting for discounts among the various coupons offered by the leading app.
But there is another scenario in which consumers take the lead and it is more present than you imagine.
Look at a poorer neighborhood and you'll see dozens of sales, grocery stores, biroscas, water and gas tanks, rubber stores, and you'll see how entrepreneurial Brazilians are.
The poorer, the more undertakings.
Decades of governmental neglect have taught that it is everyone by themselves.
As income increases, we find more consolidated businesses dominating a region. In these places it is expensive to enter the competition, so only large networks have the strength to compete for market potential.
The Changing World
If before we had to go to the market to buy drinks, meat for the barbecue, cleaning supplies, party supplies and last-minute items, all of this can be ordered via super fast delivery, even in peripheral regions.
Do you know how?
Your neighbor will deliver it to you.
That's when his neighbor joined a beverage delivery franchise, he adapted a room in the house as a cold room and now has the right to the delivery territory that comprises his neighborhood.
How to become an Ambev partner
- To be a Zé Delivery distributor, you must be over 18 years old, have a physical space and an active National Register of Legal Entities (CNPJ).
- They don't comment, but it's important to be willing to stay up late.
- The app does not accept more than one distributor per region, which allows you to master your area of activity and get a fair return on your investments (usually one establishment every 5 km).
The car battery crashed, look at another neighbor showing up in the game, who joined a sales system, fast delivery and installation of automotive batteries from Grupo Moura.
A neighbor of yours became a Unilever partner and now has a specialized laundry.
Conclusion of this series
In practice, the industry will no longer have to search for stores where its products can be sold.
Dedicating enormous effort to generating lists of leads to be approached by commercial teams and activated by Trade Marketing personnel.
Industries may seek markets where there is potential, that is, a concentration of people with a consumer profile, and in those places establish a relationship with a local partner under a franchise agreement.
Commerce ceases to be the only breeding ground for industries.
That is the revolution.
Get it for Ela, inspirational music from this series of articles was released on the album Summon your Buddha, from 2014.
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Article originally published on Update or Die!
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