Key challenges Philippine retailers need to overcome
PRA President Rosemarie Ong also shared how Wilcon Depot transformed its operations during the pandemic.
Whilst the Philippines has seen a resurgence in retail sales on the back of revenge shopping and revenge retail following the pandemic, retailers, however, are not out of the woods yet as there are several headwinds they are bound to face, ranging from economic woes to adapting to consumer behaviour.
Rosemarie Ong, president of the Philippine Retailers Association, said at the Retail Asia Forum in Manila that despite the optimistic outlook for the Philippine retail sector, threats due to the high inflation rates and the high interest rates remain.
“As we enter the coming months, retailers are cautiously optimistic about the year ahead,” Ong said. “We are in the rebasing period, depending on what sector you belong to; If you are in tourism you have an advantage.”
Aside from the general economic challenge, disruption to logistics is also a challenge for retailers as any delays in the delivery will entail increased operational costs for businesses.
The proliferation of counterfeit products also poses a challenge not only to retailers’ revenue but also to their reputation.
“We are pushing for an equal level playing field,” Ong said.
“This is one of the challenges that many of the retailers are facing. Although many of us now have transitioned to the omnichannel, some of us are just starting to go back to normal, addressing the lost revenues that they have experienced,” she added.
Ong said the biggest challenge retailers in the country face is adapting to the ever-evolving consumer behaviour and preferences.
One of the aspects this entails is the increased adaption of technology following the pandemic. The digital transformation also brought about various changes such as online payments.
The use of artificial intelligence is also one of the recent developments that retailers should venture into as this helps in monitoring demand, supply chain, analytics, and forecasting.
“We need to understand the pulse of every consumer to be able to adapt to the new preferences in this ever-changing environment. We have to be proactive as retailers,” she said.
Innovations at Wilcon
At Wilcon Depot, a home improvement and construction supplies retailer, the company optimised its online platforms and published more content to provide its consumers “the sense of feel” of the store during the pandemic.
When restrictions eased, Ong, who serves as senior executive vice president and chief operation officer at Wilcon, said they introduced the “Browse, Call and Collect,” as only a few can go to the stores.
“We optimised the website with the browse first and then [customers] will coordinate with us and call, and then schedule a pickup for the item,” she said.
Wilcon also introduced a virtual tour through Facebook Messenger, providing consumers with an overview of the products they want and giving them time to decide on their purchase.
Through its more sophisticated online shop, it also provides the same customer service such as providing estimates on the number of items they need for a certain product such as tiles.
“What we did is that the transformation will not be noticed. It’s like you are still in the physical store,” Ong said, adding that they introduced a virtual reality store.
Leading in sustainability
Preference for sustainable and ethical consumerism is also on the rise amongst shoppers. Ong cited a survey which stated that 8.8% of households in 2022 will become smart homes and this will increase by 19.5% by 2027.
At Wilcon, Ong said they offer smart and eco-friendly products, such as intelligent toilets, smart kitchen appliances, smart locks that use fingerprints and face recognition, smart vacuum cleaners and smart closed-circuit television cameras.
Aside from this, the company developed a five-year sustainability plan which included the installation of solar panels in its new stores.
“The electricity will not go to the grid anymore and it helps reduce carbon footprint,” she said, adding that they are using macro air big fans to reduce reliance on air conditioning units and save electricity costs.
Moving forward, Ong said that it is important for members of the retail industry to collaborate for the development of the sector.