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The 2.5-acre site at 10747 Rocket Blvd. in Orlando doesn't look like a powerhouse for Central Florida retailing.
Surrounded by warehouses and manufacturing facilities, Pegasus Transportation fits in with industrial-oriented neighbors. Until you consider the bus company will be responsible for some $25 million in retail sales at shops like Gucci, Coach and Saks Fifth Avenue during the next six weeks.
Pegasus signed a deal with the Florida Mall to bring some 10,000 Brazilian tourists to Orlando's largest shopping mall between now and the first part of August. The deal also includes ferrying the tourists to nearby Sports Authority and electronics giant hhgregg.
“Brazilians love to shop, and on average they spend $2,500 on shopping sprees when they travel to the states,” says Claudia Menezes, vice president and CEO of Pegasus.
Menezes is quick to point out that Pegasus, which had $12 million in revenues during 2010, is not your standard bus company. In addition to providing bus service for the group travel market, Pegasus also books the hotels and activities for the 25,000 tourists it transports in Central Florida each year.
About 15,000, or 60%, of the company's business is international tourists, and about 12,000 of those are from Brazil. Shopping was always a popular activity for these tourists, though most shopped for a couple of days in Miami — a prime gateway into the U.S. for Brazilian tourists — before heading to Orlando for the attractions.
“Orlando used to be mainly bargain shoppers. The high rollers went to Miami or even New York,” says Menezes.
Three years ago, Menezes and her husband, Fernando Pereira, the president and CEO of Pegasus, noticed a change in shopping patterns. Brazilian tourists — who typically stay about 12 nights during their trips — preferred to stay in Orlando. The shopping options had vastly improved with premium stores like Tiffany's, Saks Fifth Avenue and Nordstrom, as well as several high-end boutiques and outlet malls.
“Brazilians feel very comfortable in Orlando versus Miami or New York because it is so service-friendly,” says Menezes.
Menezes and Pereira began documenting the shift in shopping patterns, noting how much their customers were spending and what items were most popular. Electronics topped the list, as did the latest fashions and tennis shoes. Brands like Apple, Gucci and Victoria's Secret were highly desired, too. They also asked for feedback about the shopping experience.
They gathered data for three years and then approached Simon Property Group Inc., operator of the Florida Mall, about developing a partnership. The couple set up similar meetings with hhgregg and Sports Authority.
The Pegasus' executives not only shared their data, they also explained in detail how Brazilians prefer to shop.
“Americans will stand off to the side and wait for the sales clerk to finish with another customer. Brazilians don't do that. They gather around in a group and ask a lot of questions,” says Menezes. “If the staff knows how to work a group, they can sell 10 of the same item at once rather than selling one item at a time.”
Florida Mall has gone as far as printing special mall brochures in Portuguese, says Andrea Bjornlie, director of marketing and business development for the mall.
The couple also stresses the importance of having plenty of staff and inventory on hand to maximize sales during the three to four hours the groups are in the stores. Pereira says his company originally began working with another national electronics retailer, but the store repeatedly ran out of inventory and failed to train its staff about the differences between American and Brazilian shoppers during preliminary shopping sprees.
“If you can't accommodate our customers, we have to go somewhere else,” says Pereira. “Our customers are there for one reason: to buy lots of stuff.”
Case in point: Pegasus recently organized a shopping spree for a group of top-performing sales associates from L'Oreal's South American division. In three hours the group spent $20,000 in hhgregg.
Neither Menezes nor Pereira would disclose financial terms of the partnership with Florida Mall, hhgregg or Sports Authority, though they did say Pegasus does not charge the tour groups for organizing the shopping trips or the transportation costs.
The 10,000 customers Pegasus will bring to Orlando this summer represent new customers, and the couple plans to add more shopping partnerships in the future. About 250,000 Brazilian tourists came to Orlando in 2010. That number is expected to rise sharply as Brazil's middle class grows, and it has a strong economy and a favorable exchange rate that gives the Brazilian Real 60% more buying power than the dollar.
“Other people may try to copy what we have done, but we have three years of data they don't have,” says Menezes. Plus the company has built solid relationships with retailers since 1994 when the company had a single 15-passenger bus. Today the company operates 23 tour buses.
Bjornlie says Pegasus' extensive knowledge of the Brazilian market was one reason Florida Mall agreed to the partnership.
“This is a first for us. We have not had similar partnerships,” Bjornlie says. “We're always open to strengthening our relationships, especially when it increases our international recognition.”
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