‘Retailers must rethink strategy amid inflation’
ARETAIL executive encouraged retailers to re-strategize the way they do business to cope with inflation.
Speaking at The Manila Times online forum, “Tech Leveraging: The Future of Retailing,” on Wednesday, Philippine Retailers Association President Rosemarie Bosch-Ong said the retail industry must be resilient in the face of rising inflation.
“We always try to re-strategize and rethink the way we do business,” Bosch-Ong, who is also Wilcon Depot’s chief executive officer, said.
“So, we don’t just pass it on to the market because we don’t want to erode the
trust of the consumer on us … and we don’t want to be off the market.”
Filipinos are already reeling from high inflation, the depreciation of the peso, and disruptions in the supply chain, she said.
Bosch-Ong said her group adopts the concept of “granular pricing,” where retailers try to be resilient enough to prevent passing on the cost of production to consumers.
“We don’t do price increase across the board, we do granular,” she said. “We try to feel the market because we understand that the wallet size of the consumer is already thinning down. That’s why we have to work together … I just hope that things would improve.”
“We are seeing an improvement in the peso, with the US dollar going down, so hopefully it will improve,” she said.
Bosch-Ong also believes more overseas Filipino workers (OFWs) will come home for the Christmas holidays to spend their money in the country.
Earlier this month, the Philippine Statistics Authority (PSA) reported that the Philippines’ inflation rate surged to 7.7 percent last October. The peso’s exchange rate with the dollar was P56.94, as of Wednesday.
Bosch-Ong said both online and onsite stores are “evolving” and that retailers are reimagining the role of physical stores in the digital era.
“While e-commerce and online [retail] are gaining more traction now, physical stores will not be completely irrelevant,” she said. “In fact, the physical store can be your best asset in providing your customer the true brand experience.”
She cited Canadian retail guru Doug Stephens who said the physical store is gaining a strong presence on social media platforms.
Bosch-Ong also noted the observation of Éric Hazan from McKinsey & Company that the world is entering a “phygital” stage, which combines the words “physical” and “digital.”
“Retail is a very dynamic industry that continues to evolve and keep up with the latest trends in the market, as well as the latest innovations in technology,” she said. “So as we take the road to recovery, we will most likely carry out these new retail experiences: e-commerce, contactless and digital transactions, and at the same time, incorporate them side-by-side with the physical store. E-commerce and brick-and-mortar stores will remain to co-exist in the near future.”
The Covid-19 pandemic prompted most retailers to shift to online and digital transactions, which led to the acceleration of the e-commerce platform, she said.
Another forum participant, Leo Lagon, the chief executive officer of clothing brand Bayo, admitted that he was not sold on online shopping before the pandemic, “but since there’s nothing else to do, the team spent a lot of time shifting to Shopify.”
“True enough, ang online selling pala, iba [online shopping is different]. Even at midnight, sales are still coming in, especially during the pandemic when we started opening up,” Lagon said.
“We are still trying to strengthen our online shopping but taking into consideration, in clothing, usually the women would like to touch the fabrics,” he said.
Lagon said Bayo’s sales during the weekend are low, while sales are high on Mondays and on “sudden holidays,” such as typhoons.
He said the company is starting to consider other platforms.
Bayo “can turn around the making of these clothes in just two days, so we don’t stop, we have some pre-ordered items … these are some of the innovations that we are doing,” Lagon said.
According to the PSA, the retail sector had a 64.6 percent share in the country’s gross domestic product in the third quarter of 2022, which is the highest share.