Breaking the glass ceiling
November 3, 2018 |
Luiza Trajano turned Magazine Luiza from a small giftshop into one
of the 10 largest retailers in Brazil. Now, she is using her influence to place more
women on company boards throughout the country.
It all started during summer vacation when she was 12 years old. Luiza Helena Trajano went to work at her aunt’s giftshop in Franca, a city in the interior of the state of São Paulo and over the years turned Magazine Luiza into one of the 10 largest retail companies in Brazil.
Trajano’s children grew up around the family business. Her son, Frederico, became CEO in 2016. But Trajano sits at the head of the board of directors and is also focused on increasing the role of women in Brazilian society through the advocacy group she leads, Grupo Mulheres do Brasil.
The group has committees on education, healthcare, racial equality and domestic violence, among other areas, and it has backed legislation to ensure that women make up at least 30% of board positions in publicly-traded companies.
Trajano recently talked to LatinFinance in her office in São Paulo and discussed her experiences in the business world, how women can assume a greater presence in company boardrooms and where Brazil’s retail sector appears to be headed from here.
LatinFinance: When you started working, did you imagine you would get this far?
Luiza Trajano: I never planned any of this. I have a saying that I like a lot: Start doing what is necessary, then do what is possible and then maybe do what is impossible.
I always thought that Magazine Luiza had to grow because the margins are so small in retail. If you’re not big, you don’t survive. I always thought that the family had to have a larger role in the company, but I never said, “I’m going to be this,” or “I’m going to be that.”
As a girl from the interior of São Paulo, talking with an accent, I made sure not to lose my essence, including my feminine essence. Even today, 99% of CEOs in the retail sector are men. Imagine 30 years ago. When I used to come to São Paulo to buy or sell things for the store or go to a cocktail party, it wasn’t easy. But I didn’t feel sorry for myself and I didn’t feel inferior. People came to trust me little by little because I knew what I was doing.
But we still have a long way to go, and that is why I am in favor of quotas. Quotas, for me, are a temporary measure to fix inequality. Today, women make up 7% of board members of publicly-traded companies. If you take away the owners and the daughters of the owners, like me, the number falls to 2%.
LF: What are the main challenges for women in the workplace?
LT: The thing is, companies need to adopt certain attitudes for women to have careers. Here at Magazine Luiza, for example, you start as a salesperson before becoming a store manager. Management trainees have to travel for six months, but female trainees only go as far as 150 kilometers from home. These are the small adjustments that you have to make to increase the number of female employees.
For 15 years, we have had the “mother check,” which women with children up to 11 years old receive apart from their paychecks. Today, you have to make small adjustments that show that you want to have more women in your company.
LF: Where is the return for the company?
LT: I’m not going to talk about the personal return, because I don’t think I have to advocate for diversity in the workplace. But let’s talk about the economic returns. Women today decide everything, even what car to buy.
LF: Speaking of the market, Magazine Luiza posted strong growth in e-commerce in the second quarter this year. How do you see the future of ecommerce in Brazil?
LT: It wasn’t just e-commerce that grew. Store sales also grew. Three years ago, we started to develop a multichannel sales strategy. We trained our team and today even our drivers have an app. We have two labs with more than 400 engineers who develop all the technology for us.
We were prepared. We were on the right the track, and the market started to see that. The retail market is going through a difficult time right now. The competition is trying to get out of some problems. We’re rooting for them, we really are, because we learn by living together.
Department stores are not going to die. We have opened more than 40 new stores. But the stores now have a different role. They are support centers for people who buy products online and pick them up at the store. That human contact is not going to come to an end.
LF: Do you think that is a characteristic of Brazil’s retail sector? In the United States, for example, the department stores and shopping malls are empty.
LT: The toy store in New York that closed, my grandchildren were dying to go there. But I think it’s difficult to combine the physical with the digital. It’s a challenge that Magazine Luiza faced early on.
LF: How do you see the relationship between e-commerce sector and the financial sector in Brazil? Do banks offer the right payment tools, or is that still an obstacle?
LT: Technically, the financial sector is very good in Brazil. Digital is not just technology. It’s culture. The banks have the tools, but they are going to have to enter the digital world. The digital world is very competitive, and the banks are going to have to take on a different type of competition. Today, you see that everyone accepts credit cards. The banks that change their way of thinking, those that manage to understand the market, will find it easier to compete.
LF: Do you think banks in Brazil will have more structured electronic payment methods in five to 10 years?
LT: They already have structured payment methods, but things are going to change. There won’t be anymore credit cards. You will pay for everything with your phone. It’s already like that in China. Retail is changing very quickly, and it is becoming more competitive. Today, anyone can have a little machine to sell stuff on the beach.
LF: What about cyber security? How can the retail sector and the payment services providers offer more security to consumers?
LT: I think online security is going to become a commodity. No one can guarantee 100% security. But I think banks and consumers are increasingly preparing themselves. If data is stored incorrectly, a company can lose a lot of money. The market decides the norms, and the market does not accept data breaches. If you don’t take care of your customers’ data, it’s in all the newspapers. Cyber security is a matter of necessity.
LF: Are logistics also a challenge for retailers in Brazil?
LT: I think logistics are the biggest challenge because Brazil is a big country, and we have some very old means of transportation. We don’t have trains. There are only a few companies in the sector. We have a postal service, but it doesn’t deliver everywhere.
Magazine Luiza even bought a small logistics company now that everything is online. We know that logistics is the challenge for any retailer in Brazil. It’s not so simple. You can go to Argentina in the same amount of time it takes to go from São Paulo to Fortaleza.
LF: The truckers’ strike showed that.
LT: The truckers’ strike showed it clearly. It also showed that many times you are at the mercy of someone you’ve never seen before.
LF: Do you think Brazil’s poor transportation network is a reason why retail stores are still hanging on? In the United States, for example, the stores have closed because shipping is so efficient.
LT: I don’t think it is only due to logistics that people go to retail stores in Brazil. We have a different culture than the United States. I think retail stores in Brazil are going to have to adapt over time. We are putting distribution centers in our smaller stores. We are expanding our stores to stock more products for delivery. If you buy something for your mother who lives in Amazonas state, and I have a store where she can pick it up the same day, that is easier than anything else. If I have a store and various distribution centers, I have an advantage.
LF: Magazine Luiza sells some products online that are unusual for a department store, such as food and drinks. Why did you introduce these new product lines?
LT: We are investing in the marketplace. We have a platform. The online retailers sell their products on our site and we take a percentage from each sale. We sell beer, tires, diapers. We sell everything. It’s the only way for us to sell more products than we had before. We already have 1,500 small and medium-sized retailers that sell products on our site. It’s universal, and it’s normal.