Bricks still click.
Although challenged by the e-commerce boom, brick-and-mortar companies continue to strive since, for decades, they have been part of the lives of millions of Filipinos.
Proof of this are the malls.
SM Prime Holdings Inc. president Hans Sy highlighted key qualities such as strength, durability, value, and sustainability as reasons why brick-and-mortar businesses, particularly shopping malls, remain to be relevant in the digital age.
“Our malls are indeed called cities, places where families and friends gather together to eat out, have fun, and even do their business transactions, and hear Sunday mass,” Sy said during the recently concluded SM Partners Summit in Pasay City.
Consumer tastes have changed along with the advancement of technology, but so to have malls, he said. This is through efficient relationships between mall owners and brand leaders, he said.
“Together (SM and its partners) have changed the Filipino lifestyle forever,” he said, as he honored SM’s partner-brands that have been there since the establishment of its first mall in North EDSA in 1985.
Sy also announced SM’s plan to open six more malls in 2016 and develop four to five new malls each year thereafter to achieve its long-term goal of building a total of 100 malls across the Philippines.
Just last October, it opened its 55th mall in the country—SM Center Sangandaan in Caloocan City—while reinforcing further its spot as the largest local shopping retail operator with a total retail footprint of 6.82 million square meters.
To celebrate how malls have withstood the test of time, the retail forum discussed how the industry can persist in championing retail by bridging the gap between “bricks” and “clicks”—those with physical infrastructure versus online commerce.
Over-managing “bricks”
Since “there has been a gradual and insidious decline in customer service (globally),” operators must “over-manage” and get “crazy” over business systems and processes, said Wing-Hoe Tan, Walt Disney Institute regional business development officer.
“Disney’s consistent business results are driven by over-managing certain things that most companies undermanage or ignore—and that is a key source of what differentiates us,” Tan said.
For local businesses to differentiate themselves from their competitors, each organization should “rupture a widely held industry stereotype,” he said.
Exceptional service, which equates to exceptional customer experience, is attainable because “[it] is architected from systems and processes that [businessmen] control,” he said.
This can be achieved not only by “over-managing” company leadership, culture, service, innovation, and brand but most importantly, establishing an emotional connection with customers, he said.
“The power of service lies in [the company’s] ability to create an emotional connection, rather than a purely rational connection. And emotional connections lead to economic outcomes,” he said, citing recent innovations in Disney Parks and Resorts amenities such as its “Disney cruise line” that offers fairy tale-like ride experience to kids and families.
Disney Institute is the professional development arm of the Walt Disney Company.
Engagement through “clicks”
The competition in the retail industry is no longer about “mutual exclusivity” or separation between bricks and clicks, Samsung Mobile vice president for online David Kang said. It’s now about the convergence of online and offline services, he said.
“Consumers react better to advertising or marketing communications online but at the end of the day, they will still go to the store to purchase. It’s not mutually exclusive, it’s complementary. [Bricks and clicks] need each other,” Kang said.
He said social media has paved the way to a multitude of choices for consumers. With this, consumers’ purchasing behaviors are also evolving, he said.
Shoppers tend to rely first on the Internet for researching the qualities and features of a product before buying one, he said.
He cited a Google survey that revealed 83 percent of customers depend on user ratings or product review sites, where they read four to seven reviews, before making a purchase.
So how can online and on-ground businesses manage to coexist? “It’s not only just about the consumer going to the website, looking at the TV, but how can we, as businesses and brands, ensure that we are everywhere. At the end of the day, e-commerce still requires offline [transactions] to be successful. To be successful in e-commerce, you need your customer first to be engaged,” he said.
Engaging customers means that an on-ground business should also employ online services to provide customers with easy access to information, he said.
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