How technology helped retailers beyond the pandemic

By Revin Mikhael D. Ochave, Reporter

TECHNOLOGY has allowed retailers to survive the pandemic while boosting their operations to meet changing consumer behavior. From supermarkets to restaurants, the retail industry has embraced advances in e-commerce, positioning businesses for further growth.

“The sector heavily leveraged various technologies. Retailers integrated user-friendly websites, mobile applications, and secure payment gateways to enhance the customer experience and facilitate seamless transactions,” Rosemarie B. Ong, Philippine Retailers Association (PRA) chairperson, said.

“These adaptations have not only helped retailers survive during the pandemic but have also positioned them for long-term growth and success in the post-pandemic era,” she added.

The shift to e-commerce channels ensured faster transactions and better customer experience.    

“Retailers recognized the importance of reaching customers virtually and established robust online platforms to cater to the growing demand for digital shopping experiences,” Ms. Ong said.   

Beyond the pandemic, retailers have moved forward by using technologies such as artificial intelligence (AI), virtual reality (VR), and the Internet of Things (IoT) to ensure profitability in the coming years.

“Local retailers are actively embracing cutting-edge technologies to enhance their business operations and improve efficiency. AI is used to analyze customer data and behavior, enabling personalized offerings and targeted marketing. VR, like virtual dressing rooms, is transforming the retail experience,” Ms. Ong said.

“Additionally, IoT devices are modernizing supply chains and logistics, ensuring efficient product delivery. By staying at the forefront of technological advancements, retailers aim to remain competitive and drive innovation in the industry,” she added.    

Eric Teng, president of the Restaurant Owners of the Philippines or RestoPH, said the local restaurant industry turned to technology as a result of the pandemic.   

“We have new applications that restaurants use all the time like customer service apps and menu apps. There is also AI,” he said. “It is a new way of doing business, a new way of getting information.”

“Technology will affect many of the reasons why we travel since travel is one of the things that tell us where we eat because when you’re out of [your] home, you eat in the restaurant. That is travel mobility. That is very important with regard to the food industry,” he added.   

Data from the Philippine Statistics Authority (PSA) showed that the gross value added in retail trade reached P713.40 billion in the first quarter, up 16% from P615.66 billion a year ago.   

CHANGING CONSUMER BEHAVIOR
Dennis G. De Jesus, country head for the Philippines of global e-commerce solutions provider Anchanto, said the e-commerce sector has the potential to grow even after the pandemic following the change in consumer behavior.

“The potential for e-commerce growth is still there because in terms of our experience and consultation with the retail players, what they are saying is that there has been a change in the behavior for a lot of the consumers because they were exposed to the convenience of online shopping during the pandemic,” Mr. De Jesus said.   

“That particular experience stuck with them and the behavior has suddenly shifted into an omnichannel type of buying behavior wherein they now have the decision and access to buy the things that they need at an online or a physical store. Customers have redefined their buying behavior and pattern before making a purchase decision,” he added.   

Mr. De Jesus added that the easiest entry for small businesses to e-commerce is via the leading online marketplaces.   

“Anyone can sell in Lazada, Shopee, and Zalora. There is no hurdle at this point in time. Right now, there is no barrier to entry. I don’t think it is a challenge for small businesses to embark on e-commerce initiatives,” Mr. De Jesus said.   

The Department of Trade and Industry, citing data from British consulting firm GlobalData, is expecting the e-commerce sector to sustain its growth with a projected annual increase of 15.8% in transaction value from 2022 to 2025.   

It estimated e-commerce transactions to reach P495.2 billion or $9.7 billion by 2025, higher than nearly P270 billion recorded in 2021.   

Laurice Padlan-Obana, Kantar Philippines Worldpanel Division Consumer and Shopper Insight director, said in a media briefing that Filipinos still prioritize value and convenience when it comes to shopping, as shown in the company’s Shopperscope 2023 report.

She said it is important for shops to make their customers feel that they are spending their money wisely.

“Promotions should be offered. The specific kind of promotion that tops their preference would be the price off/discounts,” Ms. Padlan-Obana said.

“Now that people are out and about, when they speak about convenience, they also talk about access,” she said.

She said people also talk about longer store hours and nearness to other facilities, which are not necessarily their home. The location should be accessible to public transport and near other stores they visit, she added.   

Filipino consumers are now prioritizing ease of shopping when buying in local shops, Ms. Padlan-Obana said, citing organized shelves and visible promotions.

“Shopping is already more purposive and [customers] don’t want to waste a lot of time going around the store, at least for a majority of the Filipinos,” she added.   

RECOVERY PROSPECTS
Meanwhile, PRA’s Ms. Ong said local retailers are cautiously optimistic about the future of the retail sector.   

“Despite facing challenges such as rising inflation and shifts in consumer spending patterns, the local retail industry remains focused on growth and aims to regain the momentum seen before the pandemic,” Ms. Ong said.   

“Retailers are open to adopting multiple strategies and leveraging different channels to navigate potential headwinds and seize emerging opportunities,” she added.    

RestoPH’s Mr. Teng added that the local restaurant industry is already back to normal following the effects of the pandemic.   

“For the restaurant [industry], it’s actually back to normal. There is not much memory of the pandemic, although all the protocols became habits. People sanitize and wash their hands. As far as the comfort of people to go out, they are already back. We want normalcy back and we got normal back,” Mr. Teng said.    

He added that the government should push for stability in the food supply to avoid disruptions.   

“Generally, we need more stability in everything. If things keep changing left and right, that’s very hard for businesses to grow. We hope that there is more stability with regard to the food supply,” Mr. Teng said.   

This year, there have been shortages of either vegetables or major commodities, which have caused disruption, but restaurants have remained focused on recovery, he said.    

“We just have to deal with it. The only important thing that we learned was that even through the worst crisis, the world survived, the food industry survived,” Mr. Teng said.   

“We went through it and right now, just like any other crisis, after that, it is recovery,” he said. “When it happens, we hope we’re prepared for it but we will focus on the normal.”

Steven T. Cua, Philippine Amalgamated Supermarkets Association president, said supermarkets made adjustments after the effects of the pandemic.   

“As the pandemic slowly released its hold on the economy, supermarkets began sprucing up their merchandise, rationalized merchandise selection, worked on offline sales as online sales receded, and relied on innovative marketing to take the lead in enticing the market back into its doors,” Mr. Cua said.   

However, supermarkets have been slow in employing the number of personnel they used to have before the pandemic.

“Just visit your favorite supermarket and count the percentage of checkout counters existing compared to pre-COVID days, as well as the percentage of those retained open to service customers. To this day, I see retailers opening only 25% to 66% of retained counters even during rush hour,” Mr. Cua said.   

Mr. Cua urged the government to address the rising inflation as prices of grocery items have surged.   

“Inflation is one issue the government has to address before it leads to a state of stagflation, which is a deeper hole to get out of. Retail should find relief if prices become more stable and people have jobs and salaries to avail of commodities,” Mr. Cua said.   

“Additional taxes, increase in salaries, higher power costs, low demand all add up to inflation. Opportunities will be plentiful once the economy relatively stabilizes,” he added.   

Beyond the pandemic, local supermarkets should prepare for the “The Big One” or a magnitude 7.2 earthquake on the West Valley Fault, he said.   

“What we have to prepare for is ‘The Big One’ just in case it arrives even if it doesn’t during our lifetime. Retain the lessons learned from COVID-19 and always be vigilant of future shocks like this tsunami of a pandemic,” Mr. Cua said.   

Mr. Cua added that the government should focus on assisting various industries to support the growth of the retail sector.    

“The government should provide incentives for the manufacturing industries to invest, reinvest, expand and flourish. This provides employment and fuels a consumer-driven economy. Look after the needs of industry for power and water, physical infrastructure. Get the farmers who supply fresh produce more informed, inclusive and empowered to enjoy the fruits of a growing economy,” he added.