The Peruvian retail chain specializing in the sale of footwear is taking its first steps in Chile after conquering its native country with a model that instantly connects physical and digital purchases.
In the early 1990s, Peru was taking the first steps towards economic recovery after years of hyperinflation and trade restrictions. One of the policies implemented was the liberalization of imports, which motivated hundreds of entrepreneurs to buy everyday products abroad to sell them at affordable prices in the Andean country.
With this motto in mind, businesswoman Lourdes Wong founded Banana Boutique in 1991, a store dedicated to the sale of imported items for women such as shoes, handbags, jewelry and clothing. The goal was to bring Peruvian customers closer to the shoes they saw at fairs in the United States and Europe. In this way, under the protection of the economic recovery and the breadth of its offering, the chain grew little by little and in 1998, it changed its name to "Platanitos." It was also around this time that the brand reinvented itself for the first time.
“The idea was to democratize fashion. And back then, we used to sell our products through catalogs, similar to how perfumes like Unique or L'Bel are sold, but in shoes. But at that time we noticed that when your catalog is very small, they don't promote or sell it. So in order to increase the number of pages, we decided to start selling other products like Nike, Adidas or Puma sneakers, which, let's say, were much easier to sell,” explains Pedro Mont, Lourdes Wong's son and today CEO of Platanitos, to AméricaEconomía .
This is how the company's diversification began, as well as the tendency to take advantage of alternative sales channels. While the stores offered exclusively women's shoes, the catalogues also offered sneaker models. Mont says that the transition to a website was therefore accessible to them, because they already had experience selling products outside their original audience. Today, the e-commerce platform also offers clothing, home accessories, food and drinks.
Even before the COVID-19 pandemic, the manager explains that they had already decided to invest in e-commerce, because it was very difficult to place certain products in physical stores. There were two key reasons: the first was the inability to display 600 pairs of shoes in stores of only 100 square meters. The second was that no one asked for footwear that was not feminine or belonged to a brand other than Platanitos.
“When a customer enters one of our stores, they always expect to see our own brand of women’s shoes and they don’t usually look for other products, even if they are displayed in privileged areas of the store. So we decided to promote them on the website,” says Mont. This approach allows the customer to order a pair of men’s shoes in a physical store thanks to the help of the platform, even if there are no models on display.
The heart of these operations is centered on the “Chaotic Storage System,” a method that consists of assigning an independent code to each product, even if they are shoes of the same model or pair. The objective is to collect all possible data on each item of clothing, including its origin, manufacturing time, location in a warehouse or branch, among others.
“If the product tells you that it is in stock, it is sold. In fact, in stores, the accuracy of the inventory record (ERI) is 98% or higher. This allows the customer, from any Platanitos store, even from home, to buy a product and automatically depending on where you are located, the system will try to find the nearest store by geolocation to reserve that order and block it for other customers. So, even if another customer sees that item on the website or in the store, they will not be able to buy it, because it has a unique code already assigned,” Mont explains.
Furthermore, if the customer wants to buy a pair of shoes and cannot find their size in the store they visited, they can use the platform to reserve their order in another branch and then Platanitos will send it to a nearby location. Mont's idea is to make the most of so-called "impulse purchases", a common phenomenon among many customers that benefits sellers, but which disappears as quickly as it appears.
“If I want to have a grilled chicken for lunch and a chicken shop doesn’t offer it the way I want it, I go to another one, because I want that dish. An impulse purchase is when you suddenly crave something and if you can’t get it at the moment, you forget about it. It can happen with chocolate, but also with a pair of shoes. Because nobody buys shoes because the sole on their shoe has worn out, but because they liked it at that moment and wanted to treat themselves,” he explains.
By this logic, impulse purchases tend to lose steam over time. “I have rarely found a person who will go to another store to look for their size. If you don’t secure a sale or impulse purchase at the right time, you usually lose it,” Mont warns.
THE KEYS TO GROWTH
Platanitos is currently close to reaching 100 locations in Peru, with an emphasis on provincial cities. This year, the chain opened branches in towns such as Talara (Piura), Moyobamba (San Martín) and Yurimaguas (Loreto), among others. It is striking that these are cities with only a few thousand inhabitants, but there is a reason for this.
“There is a lot of money in these cities that is not measured, because the informal economy predominates, but there is purchasing power and people from the provinces are eager to access products that are available in Lima and at the same price. Because normally when they receive products they tend to be expensive, because they pass through many hands: from the manufacturer to the regional distributor,” explains Mont.
Meanwhile, the retail chain has already taken its first steps in international expansion. This year, they managed to open their first two branches in Santiago de Chile, where they hope to consolidate themselves in the medium term, taking advantage of the presence of a large Peruvian community. According to the CEO of Platanitos, Chile had been on their radar for some time, but they had to postpone their entry due to the social outbreak of 2019 and the subsequent COVID-19 pandemic.
“Chile has the third largest population of Peruvians in the world. So, it is easier to enter a market where a large part of the people already know the brand. As for the challenges, although Chileans have twice the purchasing power, they are a little more conservative when it comes to fashion. Peruvians take a few more risks and adopt new trends, such as choosing neon colors, while their neighbors are more classic,” says Mont.
Although he does not rule out that Platanitos will eventually expand to other neighboring countries such as Bolivia and Ecuador, the manager assures that reaching one hundred branches in Peru and consolidating itself as a competitive brand in Chile are among the only priorities for now.
