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Identification as a key to Strategies for the Latin American Market

How to create better experiences from the context and needs of Latin users

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The Latin American market is an open field of technological development opportunities. It is no wonder that in recent years we have witnessed several unicorns emerging. Some facts can illustrate this statement:

  • In August 2020, Mercado Libre became the most valuable company in Latin America;
  • Airbnb, Netflix, and Uber, between 2016 and 2018, had their most significant  growth in this region than anywhere else in the world;
  • According to LAVCA (the Association for Private Capital Investment in Latin America), 2019 was the record year for raising investment for tech Startups;

The history of the last years is positive, and this region’s prognoses are optimistic, mainly concerning the buying behavior. When analyzing the financial sector, Latin America presents a huge market gap, where almost 70% of consumers don’t have bank accounts. As for interest in online shopping, UBS estimates that e-commerce will represent 25% of retail sales in the next five years, compared with 15% in 2019.

READ ALSO: Airlines are engaged in the transportation of COVID-19 vaccines in Latin America

Working at Despegar, or for Brazilians, the largest OTA in Latin America, and now in Mercado Libre, I had the opportunity to experience and learn more about different countries’ scenarios. Although the two companies’ field is completely different, the objective has always been the same: to create the best experiences for users and overcome Latin America’s challenges in different contexts.

User-Centric Design and Strategy

To achieve such potential, we need to remember that Latin America’s nations are not one single thing. Offering a unified and massive experience for the region as a whole will hardly be efficient, given the diversity and cultural wealth in each country. This is where the user-centric strategy begins.

Recent research conducted by Deloitte suggests that client-centric business is up to 60% more profitable than companies that don’t opt for this approach.

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User-centric companies assume that the client is the core of the business and all their contact points revolve around it. It doesn’t matter if your consumer is in your physical unit, in your e-commerce, or your social networks: he is unique to you. This impacts directly on brand perception and, consequently, on the trust people feel in your business.

To deeply understand users is to understand their context and especially to respond quickly to changes of scenario. A recent example was Mercado Libre’s adaptation by launching functionalities following the pandemic needs. There was a massive growth in the search for several categories and a consequent increase of five million new buyers, as shown in the report on the evolution of consumer behavior in times of COVID-19.

Localization is more than translation

When we talk about design and strategy centered on Latin American users, we don’t only deal with socio-economic issues but also with entirely different customs. Although Latin American countries share some cultural aspects, there are distinct user-profiles, and we tend to believe that most decisions should be made uniformly, especially when it comes to Hispanic-speaking countries.

READ ALSO: The debit cards not so silent revolution in Brazil’s e-commerce

Localization applied to e-commerce means adapting products or services to the appropriate cultural context, including language, idioms, marketing campaigns, and economics. Having access to Latin American scenarios is indispensable to benefit from the particularities of each country, for example, commercial dates such as the Hot Sale in Argentina and Carnival in Brazil, or even the difference between the number of annual vacation days, being 6 in Mexico, 15 in Chile and 22 in Peru.

It is not only a language barrier; there are cultural obstacles. If you are ignoring this, your audience will be missing you. It’s not just translating. It’s geolocalizing and customizing.

Allan cardozo, ux leader at mercado libre

Localizing content and design bring results. In practice, the projects I work on have country-specific clippings, which encourages us to create tailored solutions for each region.

As a Nieman Lab experiment demonstrates, it is possible to get six times more engagement when using localized content. In addition, CSA Research points out that 76% of online buyers prefer to purchase products with information in their native language and 78% of them are more likely to make an e-commerce purchase with localized content.

READ ALSO: Mercado Libre reports 13% growth in sales during the third VAT-free day in Colombia

At the end of the day, it’s all a matter of identification

Users approach a new product or service based on their mental models, which are formed by education, experience, age, and culture. Users generate expectations based on previous experiences. People seek identification in each new experience they have.

Generating this connection depends on encompassing the design as a strategy and seeing usability as a key element. An NN/g study demonstrates how usability improvements can increase current sales by about 79%. Companies that invest in design have significant returns, such as increased customer loyalty, better stock performance, higher revenues, and better evaluations.

Because of economic and social characteristics, defining costs, fees, and payment options require special attention, being decisive factors when dealing with usability for the Latin American Influencing Public. Understanding customers’ payment preferences and offering options that people are used to is paramount, as it directly influences the shopping and checkout experience.

READ ALSO: Third VAT-free day in Colombia: Marketplaces surpass 1,000% sales growth

An example of this need to adapt to Latin American payment methods is Boleto Bancário. EBANX’s Beyond Borders survey from 2019 points this method as one of the most strategic, since 51.5% of Brazilian respondents said they use it to pay for foreign products and services. Among those who made this choice, 53% had a credit card. The share of local payment methods has distinct relevances in other countries, such as Rapipago in Argentina, bank transfers in Mexico, and credit card flags in Colombia.

Other meaningful aspects for Latin American electronic commerce are descriptions, evaluations, and comments of products as well as customer service.

Bad experiences mark us. Because of this, we are directly affected by the bias of negativity. When making judgments, we weigh the negative aspects of an event much more than the positive ones. A PWC survey points out that 32% of consumers would abandon a brand they love after just one bad experience. This feeds the search for confidence through design. One can perceive this in the 70% of the worldwide public that reads comments and evaluations before making a purchase.

Making customer support easily accessible and personalized will require geolocation and data analysis. Imagine reading a product comment and not understanding what was commented on, or needing to solve a problem with the after-sales sector and the service being in another country. It may seem like a mere detail, but these points create distance in the relationship with the consumer.

READ ALSO: Latin American fashion e-commerce Dafiti recovers from initial pandemic hit and grows 52% in the third quarter

Breaking down borders

There is a huge opportunity to be seized in Latin America, and having a user-focused strategy is vital. To achieve this goal, businesses need to:

  1. Stop considering that decisions should be uniform throughout the region;
  2. Break down physical and especially conceptual barriers;
  3. Conduct research with users because each consumer interacts with the digital universe in a unique way;
  4. Besides translating, it is necessary to localize and personalize the experience;
  5. Focus on generating identification. In this aspect, nurturing a diverse team can make all the difference. 

A plan formed by the joining users’ needs and expectations, behavior data, and personalization of customer interactions allows you to conquer your product’s potential in Latin America.

(Translated by Livia Perretto)