As the temperature in the country starts hitting record highs, we see more and more people flocking to the
beaches, resorts, and yes, even shopping centers and malls to make the scorching summer heat more bearable.
Whether or not the increase in the number of mall goers translates to additional revenues for retailers is a different story, though. While new shopping centers continue to mushroom throughout the country, one can’t help but wonder how long this boom will last, especially with more Filipino consumers becoming more at ease with online shopping.
In this day and age when mobile phones have become shopping devices and when the competition has gone global, retail companies face the daunting task of responding to the challenges that could either give promise or peril to their business.
The 2017 Total Retail Report, a global study by PwC’s Global Retail and Consumer practice, reveals that the stakes have never been higher for retailers as they face one of the most competitive environments in decades.
The survey, which covers six continents and 29 territories (including the Philippines), and has 24,741 online shoppers as respondents, provides some insights into where retailers can invest in order to stay relevant in this demanding global marketplace. I am sharing below some of the types of investment retailers can make for their future as described in the study.
Mobile site. According to the survey, while in-store shopping is still most popular with weekly and daily shoppers, the frequency of mobile shopping has had a steady gain on other digital channels such as tablets and personal computers.
In the Philippines, for example, 32 percent of the respondents said they buy products at least monthly via mobile/smartphone. With the increasing popularity of mobile shopping, retailers should consider not only in-store investments but also investments that would maximize the mobile experience of their online shoppers. Taking it a step further, retailers must also consider whether to invest in a mobile app or a mobile site as each offers a different mobile experience for the shopper.
Talent. Contrary to recent information circulating in social media, in-store shopping is not disappearing. For the past five years, the PwC study has shown that a significant percentage of global consumers shop in-store at least once a week.
This underscores the importance of making necessary training investments to make sure that quality store associates enhance the consumers’ in-store experience. However, this is just one side to investing in talent that should be given attention by retailers. With the fierce global competition in retail, investment in marketing and social media expertise has become a must. An important but often overlooked aspect related to this is that such expertise must extend all the way up to the C-suite. In this way, retailers can continue to be relevant and attractive not only to its consumers but also to prospective employees.
The brand story. In the PwC survey, respondents were asked about the online media they used regularly to find inspiration for their purchases. It is not surprising that “traditional” social networks such as Facebook and Twitter came out on top.
As more and more consumers want accessible authentic information, retailers should consider telling their brand stories in social media to promote their products and services. The impact of the social media ads released earlier this year by one of the country’s leading fast-food chains is a testament to this. Rather than just concentrating on traditional advertising, retailers should explore investing in a social media strategy, which focuses on both content and media – what platform to use, frequency of posting and the like.
More secure platforms. Data security remains to be a top concern of online shoppers, with about two-thirds of the respondents saying they are concerned with having their personal information hacked while using their mobile phones. It is interesting to note that this concern is greater in the Philippines, with 80 percent of the respondents wary of hacking.
Investing in secure platforms and its maintenance, as well as the training and continuing education of IT employees has, therefore, become a must for retail companies doing or planning to do business online.
Loyal customers. Based on the results of the PwC survey, more than 60 percent of the respondents like to shop based on brand loyalty rather than to try something new, when asked what kind of shoppers they were. Do they generally know what they like and tend to stick with it, or do they generally like to buy whatever seems new and different? Investing in keeping loyal customers happy through special discounts, customized offers and frequent buyer programs could provide good returns for retailers.
While business models and strategic priorities may vary across companies, the proposed investment strategies described above should guide companies as they traverse the complex and evolving retail business landscape. To flourish or to fizzle out, the result depends largely on how retail companies are able to respond to consumers who are becoming more and more demanding and to the competition that continues disrupting the status quo.
Catherine H. Santos is a partner from Assurance and the Assurance Transformation Leader of Isla Lipana& Co./PwC Philippines. Email your comments and questions to firstname.lastname@example.org. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.