The Power of Concepts Stores in the Crop Inputs Distribution in Brazil: Facts & Opportunities
Jan. 21, 2021
In the not-so-distant past, Brazil had more than 5000 sales points of for the distribution of crop inputs, many of these establishments did not have a technical staff, were inadequate locations, and often with poorly exposed and poorly stored products, and what intrigued me most of all, it was the fact that these places did not offered nothing different to the farmer, nothing that motivated the farmer to go to that place as a way of learning, relating, and interacting with the distributor, the partners and others farmers.
In recent years, this situation has changed a lot, with large investments by multinationals, private equity funds, and cooperatives, these spaces have been transformed and are being true centers of coexistence and learning among companies, distribution/cooperatives, and farmers. Crop Inputs distributors are increasingly becoming aware that they need to be a center for generating value for farmers through services and experiences and not only with sales of products.
My first experience with this transformation was when I was Marketing Director at Bayer and at the time Ivan Moreno, Market Access Director, came up with a project for the total transformation of the frontages of the Bayer distribution network. The Bayer brand was very strong and Ivan, very astute and intelligent, realized that linking and strengthening the Bayer name would be healthy for the whole business. With great success, we managed to standardize almost 100% of the network and we took the first step towards a better standardization and experience for the distribution network owners and the farmers.
The second step towards improving the physical facilities of the input distributors was taken by the cooperatives mainly with the entry into the Mato Grosso do Sul state, with modern stores and with fresh and convenience spaces transformed and made the distributors there like BioRural, Ciarama, Jangada also to modernize. In my opinion, the MS today is the state that has the most modern points of sale and synchronized with the current moment and with my perspective of points of sales and service to the farmer.
But after all, what is a concept store? These stores often work as an experiment or a kind of laboratory where brands can present their consumers with new ways of acting, from the service to how their products are exposed, or even a complete rupture of language and communication that is being used. This concept has been growing a lot in our retail segment with major brands making use of and investing in innovative projects such as Apple, Ri Happy, Via Varejo, Magazine Luiza, and Drugstores chains such as Drogasil. Just to have a dimension of values, the retail market in Brazil revolves around R$ 500 Billion, which justifies the modernization and this new look for the sector. But not so irrelevant, the sector of distribution of crop inputs, moves annually in Brazil, more than R$ 160 Billion Reais and that for this value, the relevance of the Agro in the economy, deserves the attention and dedication of the distributors and suppliers to attend better the customer.
You can't call a renovation or simply a new project in a concept store. I believe that every new concept must be based first on a strategy, the right direction. Does your company need to reach new baselines? Do you need new consumers? New Suppliers? or are you just looking for an increase in sales?
Concept stores need to be connected with their audience, in our case; they need to be connected with farmers. For distributors, it is an important moment to choose suppliers correctly and to know who is aligned with their strategy. Distributors have to offer a differentiated shopping experience and in our agro world, it has no end, the imagination can run wild since we can offer from productivity simulators, climate simulators, planting date simulators, agricultural insurance, that is, transform the shopping experiences for a moment of financial and technological interaction.
We know how strong the transactional relationship is in our segment, but how much of it was forced by us for lack of arguments and differentiation. Despite Covid and the social isolation I also believe that this will pass and the creation of living spaces, which strengthen the relationship and the trust of the farmer in his company and his partners, will be fundamental for the success of all involved. I am very happy that this concept has been strongly applied and in my opinion, it needs to be even more growth due to the growing demand and the need for differentiation. I have seen some examples that migrate in this direction and that two famous architecture firms focused on the retail market are already directing efforts towards the agribusiness market.
The first is MGoes (www.mgoesad.com), with major clients such as Banco Original, Santander, Ben & Jerrys, Drogasil and who, after the facade and renovation projects of Bayer distributors, set foot in agribusiness and led the whole the implementation of Syngenta's stores, AtuaAgro.
In my view, Atua Agro is an innovative and differentiated project, which focuses on customer service, relationships and bringing technology to the farmer. This project is a major milestone for the distribution system, as it is the first initiative of a crop input production company to go directly to the market and which in my opinion has been growing with great intensity in a market that is very disputed and dominated by cooperatives. It is the strength of generating demand versus meeting demand.
Another famous architecture and Design office with strong performance in the retail area with clients and differentiated projects such as OMO Lavanderia, Natura, Mc Donalds, Nutela and Ponto Frio concept stores, which has been putting efforts and making his projects in the field of agricultural inputs is the Jacarandá studio (www.estudiojacaranda.com.br), with an exclusive project for an crop input distributor in the state of Paraná made the rusticity of the agribusiness world allied with all the technology needed to produce well and sustainably.
This search and interaction with the farmer has no turning back, and new entrants are realizing this.
To finish I list 5 tips for you to invest in this concept and strengthen your brand and attract more customers
1- Invest in a warm, inviting and interactive environment with customers, the consumer always has to be the main element, as there is no point in a new store with extravagant decorations, modern facilities and technological resources if it does not offer a different experience and close to your audience.
2- Offer new experiences to customers: A store must be more than just attractive, today people want to leave their homes to live an experience, otherwise many things can be bought in the comfort of home in just one click. The distributor needs to look for this for the farmer, the products we sell are mostly post patents and the click is very attractive.
3- Make Partnerships: The store space can be used to offer workshops, training on how to teach something new, it can become a space to receive groups willing to discuss something, or the store can provide a space for a service provider, everyone are allies to build consumer loyalty.
4 - Have an Excellent team: Your salespeople need to be technical, passionate about selling solutions and committed to customers.
And last for not least, the number 5: Less is More: Focus on products and partners ... Don't try to please everyone, seek to bring solutions to your customer and focus in this case is essential.
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