The strong performance of retail in the first six months of 2022 not only speaks of the resilience of consumption in the Philippines despite economic headwinds. This also gives insight into the Filipino consumer and what’s unique about the retail landscape in the country.
Dhinno S. Tiu, The SM Store Executive Vice President for Operations and Sales Support said that the Filipino consumer today is evolving but still focused on value shopping especially magnified by the pandemic. They are also getting more comfortable with technology as the pandemic pushed digital alternatives in consideration of safety.
But retail spaces, particularly malls, will always be the go-to community spaces in the Philippines for Filipino shoppers. Beyond the purchase of life’s necessities, malls have evolved into a hub that serves as the modern-day plaza center for communities all over.
“As the new day social platform, the malls are a place of convergence, dining and shopping, where people can mingle and relax. Despite e-commerce, brick and mortar spaces will always have a compelling value and relevance for the Filipino shopper,” Mr. Tiu said.
Elsewhere around the world, especially in Western countries, shopping malls were affected when COVID-19 struck.
In contrast, shopping and even ‘malling’ in the Philippines have become an integral part of the everyday Filipino lifestyle. Crowds have returned to Philippine malls, with SM malls’ foot traffic increasing by more than 100% over pre-pandemic levels year-to-date.
The numbers recently posted by SM Retail echoed this activity. Operating over 3,300 stores, SM Retail reported a rise in revenues by 18% to PHP163.7 billion in the first half, buoyed by the return of crowds in physical stores and malls. SM Retail’s net income also grew by 91% to PHP7.0 billion, benefitting from efficiencies across all retail formats.
Renewed economic activity is spurring a revival in livelihood which, in turn, is driving rising incomes across the country. Cash remittances from overseas Filipino workers also hit new highs in July 2022, up 2.3%, providing more fuel for spending.
With added resources, Filipinos are returning to shopping, especially in fashion items with vigor. Many also treat shopping as therapy and entertainment.
“People will always go shopping to feel good about everything that is going on,” he said.
Backed by over 60 years of retail history, SM knows the Filipino consumer all too well. It however continues to listen, adapt and innovate to their ever-changing needs. When the pandemic struck, SM made it a point to connect with the customer conveniently and innovatively.
Call to Deliver, The SM Store’s hybrid and safe shopping service available through #143SM, Facebook Messenger and Viber, allowed customers to chat with personal shoppers and have their items delivered to their doorstep or picked up in-store.
“The introduction of our personal shopper channel (Call to Deliver) enabled us to continue serving our customers during the peak of the pandemic. We were the ones who went and reached out to our customers, offering the convenience of same and next day delivery and personalized service,” Mr. Tiu said.
He added that SM will continue building on its strengths to be relevant to its evolving customers. As SM welcomes more people back into its stores and malls, it is working to introduce more experiences, especially to the younger generation with more ‘Instagram-worthy’ areas to go along with its diverse and complete offerings. “We continue to adapt to our customers’ modern needs and endeavor to provide them with new, safe, and enjoyable shopping experiences,” Mr. Tiu said.