Spinning the Wheel of Retailing in Latin America

Abstract

This exploratory study identifies key pillars upon which innovative business models rely on in the Latin American retail landscape. First, using qualitative research methods, we delve into the minds of Latin American emerging consumers to uncover their needs and paradigms. In a region where retail innovation has traditionally been targeted at high-income consumers, we find a new breed of retailers that cater to the large mass of emerging consumers. Second, we explore the avenues of innovation retailers have followed to serve this impoverished segment. We find that retailers' efforts to innovate have resulted in at least three original retail formats: one centered on providing access to durable goods, another centered on offering a wide assortment of goods and a convenient location, and the last one centered on incorporating design and quality. Based on the wheel of retailing theory, we show how these new formats are changing the structure of the retail industry in the region.