Just like any other industry, the world of retail has been greatly impacted by the advancement of technology today. The benefits of digitalization have trickled down to the lifestyle choices of consumers, particularly their shopping habits and taste-making choices.
While on the other side of the coin, these same choices of the customers influence how retail businesses run their game in terms of levelling up the quality of their products and services, as well as their business operations.
Rose Ong, the newly elected president of the Philippine Retailers Association (PRA), shared her insights on the current retail landscape in the Philippines. She noted that although digital advancements have overall changed the business game among retailers, brands should consider being “omnichannel”, highlighting that the physical presence of a brand is still a huge factor in the growth of a retail business.
“For several years now, being omnichannel is stressed upon retailers. That simply means being equally present in both online and offline to cater more to the needs of the customers. While there is a rise of e-commerce or online shopping lately, we believe that brick and mortar stores will remain to be relevant, especially here in the Philippines, “she said. “The share of online shopping is only about 1-2% of our total retail value, and there is still a continuous expansion of malls and retail businesses in the country.”
Ong said that due to urbanization, real estate developers and retail businesses are expanding in emerging and secondary cities in the Philippines such as Davao and Cebu. “Every retailer today would like to expand in those emerging new markets. And a huge part of that is really making their physical stores in those areas present and dynamic—always adjusting to the need for convenience of Filipino customers. Filipinos generally love shopping, be it offline or online, so the key for retailers to grow is to be omnichannel and be adaptable to technological changes in retail today. Physical stores often see online stores as their competition when in reality, they can be relevant and high-performing by simply being excellent in both their online and offline presence,” she said.
The key is to be creative in improving both offline and online stores to offer excellent customer service. “Retailers today are now focusing on having better customer service and providing a unique customer experience in both their physical stores and online shops. Some stores inject new ways and gimmicks in their stores by using different digital innovations. Some have Chatbots that use artificial intelligence in messaging apps, while some use Augmented Reality for retail entertainment so as to entice customers to go inside their stores,” she said. “Others offer digital payment modes in their physical stores, which offer convenience to customers.”
Ong mentioned that although all these techie advancements are readily available, retailers have to be smart in choosing what digital innovation is going to work for their businesses: “Being the country’s premier organization for retailers, we at the PRA want to motivate our local retailers to reinvent (their retail business) but at the same time be prudent in choosing the right strategy for their business, as the options can be overwhelming. We hope to empower and educate Filipino retailers thru our seminars, networking activities, and other initiatives”, she added.
The PRA has been organizing various seminars for retailers that can help them improve their overall business flow and sales growth. “We have seminars for our members about what’s the latest in trade policies because we have partnerships with the Department of Trade and Industry (DTI) and other relevant government agencies. We conduct seminars on retail security measures, merchandising and other functional areas that can help them boost their business. They just have to check out our website for schedules and topics.”
One of the PRA’s mantras is that its only business is helping retailers’ business to grow through education. The PRA embodies its mission to support members’ efforts to expand globally and to empower and guide our local retailers in attaining global competitiveness.
The PRA organizes Retail Excellence Seminar Series (RetailEx), a series of monthly seminars aimed at helping retailers upgrade their skills and competencies through tailor-fit programs and topics on retail.
The organization also takes pride in its regional development programs, particularly catered to small and medium enterprises (SMEs) in the regional provinces of the Philippines. They intend to spread the benefits of retail education to as many retailers as possible all over the country.
PRA offers Retail Master Classes as well, an intensive two-day seminar geared towards training SME retailers and middle managers. While its Lakbay Turo Para sa Micro-Tourism Enterprise Program, conducted in cooperation with the Department of Tourism (DOT) offers trainings and seminars for micro-tourism retail, aiming to help micro and small retailers in key tourist areas by upgrading their skills and competencies in operations and customer service.
With the digitalization and education through seminars, Ong’s next aim is to empower retailers by positioning the Philippines as the next shopping destination in Asia, through the help and efforts of the PRA. She said that aside from education among retailers, redirecting the focus on some overlooked retail facets are some of the strategies they want to execute.
“I believe the Philippines can be positioned as the next shopping destination of Asia, so we are doing efforts to drive tourists here. Those start-ups that are not organized, we help them in merchandising and customer service. For example, souvenir shops—we help them on how to improve their spaces, their operations and their efficiencies. We teach them how to secure their business, control costs, use technology to their advantage, and more.”
“There are so many Chinese tourists and they do not have cash with them when they travel, so they do cashless transactions. So imagine if these souvenir stores actually take advantage of these cashless payment trends? As retailers, we have to consider being cashless in transactions and to level up credit card penetration to be globally competitive in giving customer satisfaction. These limitations on not being able to offer cashless payment modes, we have to address such issues. And I appreciate the efforts of BSP in promoting cashless transactions. “
Ong highlighted that Bangko Sentral ng Pilipinas (BSP) is still working on having a 20% rate of cashless transactions by 2020.
“Because of our poor internet infrastructures and very low rate of credit card penetration, it is hard to impose cashless payments among Filipinos because they are not used to those yet. But with the combined efforts of the government and private business organizations, I am positive that we can increase the rate of cashless transactions in retail. Digital payments through QR codes or apps are being utilized in major malls and retail stores. Even sari-sari stores these days are being educated on how they can take advantage of cashless transactions. Aside from giving customers convenience, it also gives them more options for their payments modes.”
The modern Filipino shoppers
Nowadays, due to the technological innovations and the social media, we have a more discerning Filipino market. Some research online first through reviews before actually purchasing anything. And that tells a lot on how much retailers should improve the quality of their products and services alongside overall customer experience. Although the Philippines may not be as technologically advanced yet as other countries in Asia, we see here that the internet and social media are big influences in helping people discover what to shop, where to eat or even whether they should buy an item or not.
Because of an even faster pace of lifestyle, customers demand for more efficient and convenient customer services. This may include as simple as being able to know prices easily.
“Customers are very demanding. That’s why DTI is very strict in imposing price tags. Consumers are comfortable with being able to look at price tags, so they do not need to ask anybody and just conveniently shop. People are too busy that they won’t pass up any measures that can make their shopping easier,” she said. She noted that digital price tags help in better shopping experience, and some retailers have item-level sensors that could also be leveraged to power a more seamless checkout, as well as a tool to drive future customer engagements in physical stores.
Ong also emphasized that one of the key characteristics of Filipino customers today is being advocacy-driven and environmentally conscious.
“Less use of plastic bags is very much trendy among the shopping habits of Filipinos today. Most retailers now use eco-bags, and they even give incentives and rewards to customers who use eco-bags, “she said. “Retailers minimize the use of plastic bags, and that is very much influenced by the consumers’ preferences. Filipinos are much empowered and informed now. Because of the awareness they have about being environment-friendly, they support retailers that have advocacies for preserving our nature.”
The PRA president also acknowledged how Filipinos are very much technology-oriented these days when it comes to shopping. “For online shopping and e-commerce, we are among the people in Southeast Asia with the highest hours spent in the internet from 3.36 hours using mobile device and 5.23 hours using desktop. I think Filipinos enjoy online shopping all in all. They are exposed to online shopping so much so that they have accounts with digital shopping platforms such as Amazon and Lazada. Filipino consumers are more into convenience now when it comes to shopping, especially the millennials and xelennials. They’re very adapted to these online trends, and even us, who are baby boomers, try to embrace the digitalization also.”
Ong believes retailers should take advantage of that. “It is beneficial for retailers to strengthen their social media presence, website, online stores and all these digital platforms that can help put their brands out there and improve sales. These days, it is actually a lot easier to be a retailer. Just open a store on Instagram and Facebook and make your brand known online, and you can have customers right away. But of course, the power of brick and mortar stores is here to stay.”
All in all, Ong concluded that the local retail scene these days is continuously booming. “The market is there. Even if we’re all talking about high inflation recently, the country’s gross domestic product (GDP) is still high and still within the targets. Consumption is still the number one driver in retail because of our high employment rate. We have more than 95% employment rate, while unemployment rate is just under 5%. If you compare us to Spain, we have a much higher employment rate. Also, one of the drivers in retail is the remittances from OFWs. It has been growing and growing over the years. The business is growing, the market is growing so there could be speed for every retail company that wants to expand.”
Retail has a come a long way but at the same time remains to be just the same. Several years ago, we don’t have any of these technological innovations- chatbots, augmented reality, and digital payments. However, despite the entry of these new advanced factors, retail is still about relating to its customers and giving good quality product and service. By giving customers good service and an enjoyable shopping experience, be it at the physical store or online shop, it would be without a doubt that Filipinos would continue to purchase and empower the retail scene today.