CREATING VALUE IN RETAILING FOR EMERGING CONSUMERS

Latin America, 2003

For retailers in search of new customers, creating value in catering to Latin America’s lower income segment, or “emerging” consumer base, is a tempting opportunity—perhaps even a necessity. These consumers are not merely attracted to low prices; they exhibit a specific set of needs that distinguish them from other income levels. Yet, after a decade of significant growth of the region’s “modern” retail sector, smaller scale retailers efficiently supply a significant portion of fast-moving consumer goods to these segments. Furthermore, small retailers manage to offset scale disadvantages and show a sustainable business model – even before the effects of any informality in taxes and labor contributions.

This industry analysis by the Latin America Council examines the mindset of these emerging consumers and draws new lessons from small-scale retailers. The research found that much of the conventional wisdom on lower-income consumers is unfounded and that there is much more to small-scale retailers’ value proposition than meets the eye. Read the report below for more shopper insights on this market segment.