Ber months will usher in the gradual recovery of retail in the country, an executive of the country’s largest mall operator said yesterday.
“We are quite optimistic of the economy, it just needs a little hard work,” said
Steven Tan, president of SM Supermalls, in a webinar hosted by the American Chamber of Commerce and Industry.
As Christmas is a very huge thing for Filipinos, Tan sees consumers warming up and going back to the malls by the “ber” or as early as September “with safety in mind.”
Tan sees SM Malls to be hitting 70 to 80 percent mall footfall by December if the uptick continues.
That is a huge improvement coming from a low 20 percent when the SM malls reopened starting May 16 and from 50 to 60 percent as of last week.
Tan said as of last week, 60 to 70 percent of its tenants have resumed operations with the remaining still closed as they have been classified non-essential or leisure such as gyms, spa and yoga centers.
Tan said retail has been identified as the first or second most impacted by the new coronavirus pandemic.
In the Philippines, 74 percent of the economy is driven by domestic consumption of products and services. About 58 percent of micro, small and medium enterprises are in wholesale or retail business.
Even with the economy opening up, Tan said the retail sector is still challenged by
the continued health and safety regulations, near-term effects on consumer confidence and spending power and lingering fear to visit stores and other venues.
“Retailers have to work harder to convince consumers’ lingering fear of confined spaces and crowded places (that makes) Filipinos reluctant to return to stores. Safety is essential to gain customer trust and confidence,” Tan said.
Tan said retailers also have to respond quickly and innovatively to changes in consumer behavior.
Tan noted the need for retailers to reposition their products and services as essential for customers to buy.
He cited the case of Uniqlo, long been known for its Life Wear positioning and which recently launched face masks in Japan.
Tan said retailers also have to repurpose their assets, space and people not just for safety but also for productivity.
He cited the case of Sarsa which converted its restaurants into hybrid lifestyle retail and dine-in establishments.
Lastly, Tan said retailers have to make sure they are readily available to customers.
This is achieved by adopting omnichannel where customers can access a retailer’s product or service through online and offline.
But he said malls will still be relevant because “Filipinos are very social, they love going out to teat and hang out,” Tan said.
Tan said the pandemic has pushed SM Malls to embrace digital commerce.
Aside from its Click & Collect and a huge Viber community where it able to serve its customers both online and offline, SM Malls this quarter a virtual mall where customers can book purchases online for goods available in the regions and will be delivered to SM mall nearest to the customers.
