How COVID-19 pandemic has changed retailing landscape

Philippine Retailers Association (PRA) is the premier retailing association in the Philippines. In this interview, PRA officers share their thoughts on postpandemic retailing issues. They are: Jorge Mendiola, director of SM Retail; Bernie Liu, chair and CEO of The Penshoppe Group; Rosemarie Ong, senior executive vice president-chief operating officer (COO) of Wilcon Depot; Ben Chan, chair of Suyen Corp.; and Lorenzo Formoso, former vice chair and COO of Duty Free Philippines.

Q: How will physical retail spaces and layout change?

Mendiola: Retail spaces will always react to the conditions surrounding it. It will always consider economic, political and market trends apparent around us. One positive realization was when the alert levels eased up, we saw the children dancing in the hallways of our stores again and the senior citizens were brought back by their family members. Sales rebounded in the last quarter of 2021. It will continue to improve especially when those working from home start going back to the offices. January slowed down because of the Omicron variant but it rebounded again in February and, to date, we are experiencing sales levels at 75-80 percent of 2019 level, and mall traffic in most malls are already up to 90-100 percent of prepandemic levels.

What we want to do now:

1. continue to improve customer experience;

2. improve store layout and design; and,

3. intensify efforts on selling platforms (online, etc.)

We believe that brick-and-mortar retail is here to stay. We will continue to serve retail therapy for people.

Q: How do you think mall location versus non-mall location will play out for tenants in the future?

Liu: From the get-go, retailers have to be clear about their product offering, market segmentation and target customers. When these are determined, other decisions follow such as pricing, marketing and location. There is no one-size-fits-all solution that will answer the needs of every business. However, the pandemic showed us that having presence in multiple locations and sales channels is an advantage when one channel or location is forcibly shut down.

On the perspective of tenants as lessees, this crisis has shown that the flexibility of mall owners allowed brands to weather this storm. They allotted resources to help brands keep their stores open in the malls. This is a big advantage over having street stores where brands had to negotiate support and rental concessions individually.

During the lockdowns when physical stores had to temporarily close, we all learned that customers will continue to patronize the products that they like if these are accessible, hence e-commerce boomed in the last two years. But even as concerns over the pandemic lingered, the economy slowly reopened and people began to return to malls, bringing in the much-needed foot traffic for our industry.

We cannot discount brick-and-mortar stores. If we reinvest in them to adapt to the customers’ changing preferences, they will continue to thrive in the coming years, as much as e-commerce has established a foothold in the country. Moreover, retail is rapidly evolving into its next phase—the omnichannel—which will maximize the use of all existing sales channels and locations. It will create a seamless retail brand experience for customers, serving them when they want it, where they want it, whether online or offline.

Q: What “start doing” and “stop doing” lessons did you learn during the pandemic that will make your retailing more resilient and better prepared for the next pandemic (hopefully not soon)?

Ong: The pandemic has taught us many things for our businesses. As we, retailers, rally our postpandemic efforts, here’s my start-doing list: investing in proper ventilation and reinvention of our store spaces; beefing up digitalization and investment on technology; and, focusing on health and welfare of our organization and the community. And here’s my stop-doing list: treating brick-and-mortar as a stand-alone environment (instead it should be in sync and complemented by our online store); and, being complacent and focusing on the past. May the rest of 2022 be our most rewarding months yet.

Q: How do you intend to balance inbound store visits and the e-commerce business?

Chan: Bench has always been about customer experience. We take pride in engaging the senses especially when our customers enter our stores. When the pandemic happened, foot traffic declined significantly (but thankfully, we are on our way to recovery.)

We saw the shift as we found our loyal customers buying online. Our staple items—T-shirts, jeans, underwear and essentials—continued to move in our e-commerce platforms and we saw the opportunity to bring the sensory experience, albeit limited, online.

We continued to engage the customers with our local and foreign endorsers, shifting events from in-person to online. We invested in better product images, developed more engaging description pages and created attractive homepages to make the customer’s experience in navigating our sites much easier. We also became aggressive with our online promotions, participating in the marketplaces’ periodic marketing campaigns.

Our customers’ response was overwhelming. They continued to purchase the products given the ease of transaction from navigating the sites to ordering until the delivery process.

This has changed purchase behavior altogether. However, people still long for the multisensory experience and we will continue to showcase this in our stores. Now, our customers have more purchase channels and our presence in both online and offline stores will continue to be stronger. Given this, we ensure that all products are available in both online and offline stores to give customers the freedom to choose where and when they want to purchase.

Q: In what areas can “coopetition” happen among retailers, similar to how banks created ATM network?

Formoso: The pandemic has brought about new retail developments and formats, some of which were hastened due to necessity caused by lockdowns etc. The coopetition will be a welcome development in retail, especially to the supply chain i.e. supplier, distributor, retailer and also customer. Hopefully, the coopetition in retail will lead to economies of scale that will not only save cost, but also create speed in processing and efficiency—all of which are good for the business and also for the customer.

Like the ATM network, customer service was at the center and benefited the most. Likewise in retail, the coopetition is now seen in online shops like Lazada and Shopee, where competing and supplementary items are available and on-demand. Even after the lockdowns, some categories will maintain and continue to be purchased in these platforms.

I am optimistic that the advances in technology that spotlight artificial intelligence and augmented reality will push forward more derivatives of coopetition where competing brands or services and supplementary products can be offered alongside to benefit the supply chain, but more importantly, the customer. —contributed INQJosiah Go is chair and chief innovation strategist of Mansmith and Fielders Inc. The 28th National Retail Conference and Expo is scheduled on

Aug. 11 to Aug. 12 at the SMX Convention Center, MOA. Register at https://www.nrce-ph.com/.