Page 92 - STRATEGY Magazine

INTERVIEW: WALMART MÉXICO & CENTRAL AMERICA
GUILHERME LOUREIRO
President & CEO
Walmart México & Central America
“The world is changing fast, but consumers are changing faster,” says Guilherme Loureiro, President and CEO of Walmart México & Central America. When discussing retail strategy, he says that companies must
choose a value proposition. “You can’t say, ‘Let me wait until tomorrow,’ because things are going to move again.”
AHEAD AT WARP SPEED
In the speed-of-light digital world, an opportunity demands action, even if that action leads to mistakes. Part of the retailing process is to test, to learn—and to make more mistakes, Loureiro explains. The cycle of adaptation and improvement continues at an unwavering, and unforgiving, pace. “To be good in business, you have to evolve.”
Industry analysts see this evolution happening right now. In 2016, retailers in Mexico consolidated and cemented strategies. This year looks to be even more active in terms of M&As and expansions. Consumer expenditures are forecast to slow down while competition from retailers heats up.
Loureiro counts this competition as a net positive. “If we try to challenge and copy the good things our competitors are doing, that process is good for us.” Competition can be perceived as a threat, but the wiser attitude is to use it to learn more about one’s own business. A retailer cannot match its competitors product for product, price for price, but company leaders can draw comparisons and undertake analyses that lead to more attractive choices for their customers.
DIGITAL DEALINGS
New technology can help with this process. With the vast quantity of information that is now available to every company, retailers can respond faster and offer more services. By mining data, businesses learn what their customers want. Loureiro notes, “We can be simpler—and more sophisticated—for our customers at the same time.”
In fact, technology informs every decision in retail, according to the retail executive. “Customers have more power because they have more access to information, they have more access to products, they have more access to alternatives.” In short, a retail company must become a technology company in order to serve customers the way they want to be served. Forward-thinking retailers are already installing Wi-Fi hotspots in their stores.
In another bid to entice customers, multichannel retailers in Mexico are increasingly offering websites or applications optimized for mobile use. Mobile internet retailing has proved a popular choice among Mexicans. In 2016, nearly one-quarter of internet retail sales in Mexico took place over smartphones or tablets, compared to 12 percent for the region as a whole.
Loureiro cautions that mobile and internet sales give the consumer greater capacity to access competitors. To combat this, companies must provide their customers with a reason to buy from them. Otherwise, the competition awaits. A retailer’s responsibility is to discover how technology impacts customers and affects the way they make purchases. “We should always remember why we exist. We exist to serve our customers.”
TOMORROW IS ALREADY HERE
Traditional brick-and-mortar stores will always be with us, Loureiro predicts. Instead of disappearing, they will evolve— most likely into hybrids. “Stores are going to be smaller, more convenient, and interconnected, with the option to buy online or in the store.” He issues a warning, though: what customers want today may not be what they want tomorrow. The winner is the one who can discern those wants, and then act on it.
Customers are seeking to trust the people with whom they do business every day, even more now than in the past. The experienced retailer enumerates the qualities that inspire that trust: better value, better quality of products, the freshest or most current merchandise, and fair labor practices. Customers want their demands to be heard, he says. “They want convenience, service, price—everything. And if you fail in the delivery, they will let you know.”
Loureiro believes that the modern Mexican economy can respond to these demands. “Is Mexico perfect? No. Have we done all we can? No.” But the dynamic nation has open markets and open relationships. Mexico is a better place than it was 10 years ago, and the market in the nation of 133 million people is not even close to reaching maturity. The future, he predicts, is just going to get better for business.
“Retailers must be transparent. You can fool no one. Our customers know our mistakes immediately, and we need to recognize them quickly, fix them, and move on.” —Guilherme Loureiro
The Wind in Their Sales
Retailers in any developed country face a set of common challenges: as the pace of technology accelerates, so too must corporations continually adapt to keep up with competition and meet customers’ rising expectations.
90 STRATEGY