Focusing on the omnichannel customer and betting on long term initiatives are some of the strategies that turned the company bulletproof through the crash. Now, in addition to being the number one in its sector, the great company is preparing to initiate in another country in South America.

Imagining future scenarios and creating plans to deal with the most various situations possible is very common in the business world once changes can surprise many entrepreneurs. Take the crisis that hit Brazil between 2015 and 2016 and left catastrophic consequences for business, overall on the retail field. Over 226 thousand stores were closed in the sector according to the National Business, Services and Tourism Confederation.

Renner, though, faced the crisis with a different perspective. To them, the hard times represented a chance to measure their actions initiated in 2012 when it already prepared itself to possible economic instabilities.

By that time, Renner invested on its digital platform renovation, refurbished stores and focused on technologies to improve even more the customer’s shopping experience. Loaded with tons of good initiatives, a crisis wasn’t a threat. Infact, it suited to conquer new territories.

In 2013 Renner owned only 3,6% of the national market. Now, it leads the retail sector with 4,7% according to a study by Euromonitor. “Renner knew how to prepare for chaos and was brave enough to trust its clients by not closing physical stores. It kept itself resilient and ended up gaining more relevance in the market”, says Eduardo Terra, president of the Brazilian Retail and Consumption Society.

Its relevance in the business world was recently proven during a seminar promoted by the magazine IstoÉ Dinheiro in partnership with the british consultant Kantar and the University of Communication and Marketing (ESPM).

The seminar presented the ranking of the 50 most valuable brands in Brazil. In order to choose the order, there are two fundamental aspects to be analyzed: finances, which takes under consideration the value of the company’s business; and its image to customers and investors. Renner is in 9th place.

Renner’s good position on the ranking is due to the results in 2018. For the first time in its history, the company reached its first billion on profits. Its market value has already passed over 30 billion reais – just a little less than Brazil’s biggest retail store, Magazine Luiza, that’s worth 33 billion.

In an interview to CWS, Laurence Gomes, director of finances and relations of Renner, gives credit for the company’s success to its innovating initiatives, “We believe that in moments of crisis and instability, those brands that have unique competitive aspects win shares. Companies that have meaning are safe in unstable moments”, says Gomes.

 
 
 

Looking back to 2013, even with good odds in the operations, the company started to prepare itself for big changes. To begin with they hired a company specialized in cost management in order to reduce the processes and internal structures.

The action made the company more compact and agile business, stronger to face the crisis two years later. In between the changes are the suspension of the financial operation in each store, turning into a unified area shared by all stores. “With that we managed to reduce costos and gained more productivity since 40% of the manager’s time was purely administrative activities. We got to eliminate 100% of those activities and they could focus on what really matters inside a store: the client”, affirms Gomes.

Focus on technology

Last year Renner intensified even more. It divided its plan in three structural projects and the first one is focused on a personalized communication based on the collected information. Afterall, a satisfied client is a loyal client.

The second project is the product’s life cycle. The data intelligence comes as a tool to create more assertive collections every time and bring more flux at the stores, resulting in more shopping.

Novo varejo

Laurence Gomes: “The digital process will contribute a lot with the competitiveness from now on”. Photo: divulgation

“Fashion is cyclical and nowadays we lean on information from all over the world, social media, word on the streets, not only runway shows anymore. With the technology it’s possible to create projections based on the collected data of the customers. There ‘s more freedom and there will be more and more collections”, analyzes him. “Renner already makes nine to ten collections per year. Fashion requires speed and technology is essential to do that.”

Last but not least is the third project guided by the omnichannel customer (the one that traffics between the digital and physical environments) which offers a good purchase experience no matter what channel he’s using. Online navigation is smoother than ever, estimulating sales through the platform. “The digital is a very important tool to reinforce our value proposal”, justifies him.

The new way of consumption

The relationship with the omnichannel consumer has been bringing results. One of the most highlighted sections in the platform is the option to withdraw your purchase at the store. The client can buy what he wants online and pick up the item at the nearest store.

“The option to withdraw your purchase represents 30% of online sales. 10% of those buy additional items when they go to pick their things up”, adds Gomes.

If Brazil follows the same steps of The United States, Renner could conquer big part of the online market. According to a research by the american bank Goldman Sachs, it’s expected the presence of the clothing and shoes sector in the e-commerce in 22,4% until 2021, turning into the third biggest market right after the electronics market (50,8%) and the toys and games market (24,2%).

Renner’s physical stores have also been gaining a bunch of initiatives in order to attend the new customer that craves for maximum comfort. Most of them are in a period of test. But don’t be surprised when you face a totem when you enter one: this kind of tech device is trending in some stores of the brand.

The totem allows the client to shop for an item that’s not in the stock and have it delivered to their home. “Even though they physical spaces haven’t suffered any alteration, the idea is to transform them to a showroom, little by little, with the best experience and devices to reduce the time a client takes shopping”, says Gomes.

With the innovations, the level of Renner’s services tend to raise. In the big capitals, for example, express delivery is already a reality. The client receives his purchase on the same day, at the latest on the day after. Actions that aim on speed and better shopping experience will wage war between the companies in the field.

“Aside from Renner, brands like RiachueloC&A and Hering have strong digital agendas that help most decision making and improve the relationship with clients as well as their shopping experience. However, the tendency in the next five years is to intensify the use of technologies and boost the competitiveness, since we read news about them weekly. The market is really hot”, observes Terra.

Diversity is a good business

Owners of the young apparel brand Youcom, the household utensils brand Camicado and the plus size fashion brand Ashua, Renner’s strategy is to invest in different markets and diversification of business.

Take a look at Ashua, for example. The e-commerce is focused on female clothing with sizes that go from 46 and 54, it was created in 2016 and started the physical operation with three stores in São Paulo and Rio Grande do Sul. Five more are in their plans this year.

Betting on this market may have been a good idea once it moves R$ 11 billion and has been growing quickly. According to a research by IEMI (Intelligence of Market) the revenue increased in 18,92% between 2016 and 2018.

Besides, in 2017, Renner gave its first step towards internationalization by initiating in Uruguay. Today there are seven stores already in the neighbour country. “The entry in Uruguay has been satisfying, above expectations, which helped us make the decision to invest in Argentina also on this year’s second semester”, says Laurence Gomes.

In the beginning, three stores will be inaugurated in Buenos Aires and Cordoba. However, the brand doesn’t intend to explore all Latin America. At least not for now. “We don’t expect to advance to other markets at this moment”, warns Gomes.

Another source of income of the company is its financial support, Realize. In June of 2017, the Central Bank authorized to transform the subsidiary on a financial institution. Through the store’s balcony or the app it’s possible to order a credit card, take loans and hire insurances. Integrated technologies to the app guarantee credit approval in only four minutes.

Until december last year, 31 million Renner cards (private label) were granted; while cards in partnership with Visa and Mastercard (co-branded) were up to 4,8 million. “Our goal is to support the retail sales, making the purchase experience more pleasant and convenient. Besides, credits have been an important issue during crisis moments”, says Gomes. “Around 20% of our Ebitda comes from our financial operations”, reveals him.

According to Eduardo Terra, this kind of action becomes more strategic from the retail business. “The company manages the risks better because it knows its clients. When well administered, it’s a line of business that could bring big results. As the customer’s concern, it attracts convenience and loyalty”, analyzes him.

During the next few months, the group will be focused on implementing the digital cycle on its operations and will take the initiatives to other brands. Just like they prepared themselves back then for the crisis, they are preparing now for the inevitable changes in the retail business. “This process will contribute a lot with the competitiveness from now on, once the customer is way more connected and less loyal”, finishes him.

(Published May 2019).