From digital to loyalty: Unpacking the customer experience in Brazilian FMCG digitally native vertical brands

Abstract

Objective: This study aimed to analyze how Brazilian fast-moving consumer goods startups born in digital environments - also known as DNVBs (digitally native vertical brands) - are adopting effective customer experience (CE) practices in order to maximize their purchase recurrence rates and growth. In fast-moving categories such as food, beverages, cleaning or hygiene products, repeat purchases generally occur in shorter cycles and, for this reason, this research chose to target these sectors, thus observing the potential application and effects of CE in this context. Method: In-depth qualitative interviews were conducted with seven executives from Brazilian companies operating under the DNVB business model within the fast-moving consumer goods (FMCG) sector. The research instrument was based on a review of CE literature and questions regarding recurring purchases in this product category. The interviews were subsequently transcribed, analyzed and constitute the results of this study as proposed by Cheron et al. (2022). This report adheres to the COREQ checklist ensuring transparency and rigor in the presentation of qualitative research findings (Tong et al., 2007). Results: All seven fast-moving DNVBs investigated employ at least some CE practices. Post-purchase satisfaction surveys and the proximity between leaders and their customer service teams proved to be the central pillars for most of these companies. In this group of companies, the trend towards business growth was observed, as was the use of purchase recurrence metrics, yet subscription programmes remain technically complex and often misaligned with the business model; accordingly, only two companies have implemented them successfully, underscoring a need for further technical support and innovation. The relationship between company growth and the application of CE techniques has not yet been shown to be sufficiently relevant: managers have initially prioritized evaluations of the quality of products and aspects of services, such as delivery times. Contributions: The research identified a still small number of CE management practices being applied by these startups in the day-to-day running of their businesses. It also revealed frustration on the part of these leaders in exploring emerging technologies that are effective in improving their metrics, demonstrating opportunities for researchers and startups in retail technology that can address this type of management need. The research also sheds light on the agenda of companies born in the digital age, operating their own channels, and the challenges that entrepreneurs or executives in the fast-moving consumer goods industry may encounter when undertaking business in this segment.