Country Manager Peru
Insights Division, Kantar
We know that maintaining sustainable growth is an increasing challenge for brands everywhere, and Peru is no exception. In fact, the good years are gone, and today, structural issues in this country create an ever-more-challenging context. These challenges are not only related to the deceleration in GDP, but also the growth of informal jobs and underemployment, which reduce average family income.
As a matter of fact, the Kantar household panel shows there has been virtually no growth in the average shopping basket. In the last quarter of 2019, value and volume both declined 1 percentage point.
Therefore, the challenge is to develop the right strategies for the current context – not just to wait for an end to the inertia in the country’s growth.
And we know the right strategy means implementing the three global growth pillars, applied to the Peruvian reality: brand exposure, brand activation and brand experience.
When considering the right kind of exposure for a brand in Peru, it is important to project a clear sense of purpose. Today, more than ever before, Peruvians are seeking time-saving brands that make their lives easier. And this is primarily because of the growing number of women working outside the home. According to official sources, seven jobs for women are generated for every one job going to a man, which leads to female empowerment as women earn their own money, but reduces the time women have available for shopping.
It is also vital to generate the proper ecosystem for communicating with people. In fact, instant communication like WhatsApp has become the key way Peruvians communicate with each other (79 percent use it), even more than e-mail (47 percent in 2019). The number of screens people have has also been rising; 76 percent of people had two or more screens in 2019, compared to 37 percent in 2015.
And this is why, when we see the fastest-growing brands in Peru, we notice most of them use at least five types of media to communicate their campaigns. But also, the content used is anchored in progressive values that demonstrate shared roles in families and female empowerment.
Now, in order to have the right activation in Peru, it is important to start with a change in the way of buying. Buyers have learned how to identify the role of each channel to be more effective in their purchases, which is why an increase has been noticed in the coexistence of channels and missions (78 percent of households had four missions coexisting vs. 68 percent the previous year).
Purchase channels that are growing include emerging formats like convenience, soft discounters, e-commerce, veterinarians, deliveries, bakeries and home centers; they stand out for fulfilling new needs, like closeness and value for money.
One of the brands to see the highest growth in value this year is the Plaza Vea supermarket, which learned how to adapt to these new needs, not only to reach more households but also to boost loyalty.
Ultimately, experience is the aspect of a brand that ensures sustainability. The most valuable brands in Peru outperform the average on the BrandZ™ experience index (scoring 110 compared to an average of 100 in Peru). The same applies regionally, with the most valuable brands scoring 107 for experience, compared to an average score of 100.
It is not only a consumer’s own experience of a brand that is important, but also the experiences of their friends and family members. Almost half of Peruvians say they have shared their opinion in their social circle before making a purchase, or have sought out the views of acquaintances or online influencers.
So, in this complex context of structural change in Peruvian society, sustainable growth requires strategies that take account of the new rules and emerging values of society.