The former Eva Herz theater, in the Conjunto Nacional, in São Paulo will be reopened as YouTube Theater, the result of a naming rights deal made between Magazine Luiza and Google.
The space will become part of Galeria Magalu, a 4,000-square-meter concept megastore that the retailer plans to inaugurate by the end of the year, in an address formerly belonging to Livraria Cultura.
“It will be the first Magalu unit in Paulista avenue, making an old dream of my mother’s, Luiza Helena Trajano, come true”, affirms Frederico Trajano, the group’s CEO, to EXAME.
Now, with Magalu Gallery, the company aims to consolidate the ecosystem in a single location and achieve a concept that the executive refers to as a “meeting store”. “It is a place where Chanel products meet Apple’s, Adidas meets Samsung, and even Nvidia graphic cards”, he says.
The initiative goes beyond product sales. The plan is to use the theater and YouTube partnership to attract influencers and content creators, transforming the space into a meeting point to generate audience flow and brand experience, besides reinforcing the association of Magalu to consumption, technology, and culture.
According to Trajano, the idea was not only to preserve the tradition of the former Eva Herz but also to give it a new purpose. “The theater should, for me, in the 21st century have this ‘phygital’ encounter, that is between physical and digital.” The idea is for it to function as a hybrid stage, capable of hosting both traditional spectacles and digital productions.
Long-time Google partner, he was the one who took the idea to YouTube. “I wish to have creators here inside the store. They need a physical space to meet their audiences. There is a need for this, and the project will enable them to connect with their audience beyond the algorithms, in a real space, through direct interaction.
The gallery was also planned as an Instagrammable store, with areas dedicated to activities and live commerce. The portfolio’s diversity will allow each brand to dialogue with its audience through content creators from different regions.
Multi-channel reinforcement
Currently, around 70% of Magalu’s profits come from the digital sphere, which makes up R$ 50 billion from a yearly revenue of R$ 66 billion. Together, Kabum and Netshoes represent R$ 10 billion from this total volume. To Trajano, the advancement showcases the weight of the group’s digital acquisitions, but also the need to give some visibility to the consumer that all these brands are a part of the same ecosystem. The Gallery, he affirms, fulfills this role by physically materializing the diversity of its portfolio.
The megastore arrives at a moment when the company seeks to gain more momentum in a market dominated by players such as Amazon and Mercado Livre. In the last survey, Magalu registered advances on two fronts, but has a more contained growth. Trajano explains that the strategy has been to swap expansion for rentability. With high interest rates, installment payments without surcharges have become more expensive, requiring a strengthening of the operating margin to offset the increase in financial expenses.
The bet in physical space comes as an expansion alternative amidst lower competition. To the CEO, the Gallery is not just a branding action, but part of a central strategy for the group to act in multiple channels simultaneously. “This has always been what sets Magalu apart and will continue to do so. Now, we are changing levels in terms of multichannel acting, involving the whole ecosystem”, ends the CEO.