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It’s hard to escape news of changing consumer behavior and ongoing retail ‘disruption’, especially amid the year’s largest sales. An evident signal of this shift has been the steady decline in foot traffic to once widely /lopular Black Friday sales in shopping malls.

Net sales on Black Friday slid 10.4 percent for brick-and-mortar chains, according to RetailNext.

For digital-first businesses, launching online is a no-brainer. But what happens when you are an existing brand that is over 80 years old working with hundreds of distributors around the world? Speed and simple decision making are out of reach.

At the Shangri-La at the Fort Manila, four brands – Abbott, Unilever, Payless, and Titan22 – each leaders in their own categories, were brought together by ecommerce enabler and e-distributor aCommerce to candidly share customer preferences, impact of traffic congestion and what must change internally in order to stay relevant in the future.

This is what was discussed:

1. More Filipino men pushing the carts

“There’s a lot more male shoppers going for groceries, it used to be the woman that was in charge of nutrition labels, but now they tell men to do it,” says Christian Domingo with a laugh. He is the Head of Ecommerce for Abbott Philippines.

Findings from a recent Nielsen study show that 40% of today’s grocery shoppers in the Philippines are men, an increase of six percentage points from last year. The driving factor? Affluent Metro Manila residents, especially in dual-income households.

Nielsen

Grocery shopping behavior for men and women in the Philippines. For more charts & graphs, visit here.

What this means for brands is to rethink marketing strategies traditionally targeted towards women.

Referencing another study, Christian attributed the popularity of ecommerce to worsening traffic conditions in the Philippines. CEO and owner of Titan22, the top sneaker retailer in the country, Dennis Tan, also shared his experience.

“The customer decision window is getting shorter and shorter. It used to take days where people thought about purchases and then come back to it but now the entire process seems to happen with minutes.”

He should know as Titan sold 400 pairs of Jordan Elevens during Single’s Day (11.11) in the first hour online.

“I won’t drive for hours for a chance to get the right shoe size. Consumers have a lot of options where to buy products, so we need to offer a competitive advantage.”

2. After-sales is as important as the purchase journey

Ecommerce is commonly misinterpreted as the shopping experience on a website but what gets forgotten is the attention given to the steps that come after checkout.

“How a customer feels after the purchasing experience is a big factor to the entire happiness experience to retail. This is one of the big pieces,” comments Dennis.

“We need to give them inspiration, not only about the shoe, it’s about happiness guaranteed,” agrees Thea Lizardo, Head of Ecommerce for Payless Philippines (Footwear Specialty Retailers Inc.).

3. Internal processes causing friction, there needs to be unified commerce

aCommerce, ecommerceIQ

Christian Domingo and Thea Lizardo from Abbott and Payless, respectively.

“It’s not typically mentioned but an important factor to talk about is the hurdle of internal friction in terms of technology. There’s a lot of confusion around how we attribute sales,” mentions Thea. “ These discussions are vital to transforming the entire business.”

“How do we remain competitive? How do we keep customers? It’s overwhelming for brands and business owners to adapt to all the changes because it’s so quick but at the end of the day, it’s understanding your numbers, your customers, your behavior and leveraging it.”

“Internally, there is no P&L, who is going to own the digital marketing unit? The marketplace?” comments Christian.

“It’s recommended [at Payless] to have a separate P&L, separate ERP for our ecommerce business as we didn’t want to disrupt the other 76 stores,” replies Thea.

Another internal roadblock Christian hopes to push through is the company’s (lack of) unified shift to ecommerce.

“We are selling milk online but other product divisions such as diabetic drugs need the push. They have hurdles like FDA approval, internal conflict, etc. but what we envision for 2018 is to go beyond the brand because it’s the user looking for a solution to a problem.”

“We [Unilever] have a long heritage selling fast moving consumer goods but we need to move things faster,” closes Kay Veloso, Head of Ecommerce for Unilever Philippines.

“It’s [unified commerce] not an unachievable dream, it’s a basic expectation. B2C, B2B – we serve the entire ecosystem to get the pulse of people we serve, and continue to adapt our brands to ensure their day to day needs are met through ecommerce.”

aCommerce, ecommerceIQ

Kay Veloso at the aCommerce Philippines Partner Media Workshop

4. Data and mobile will pave the retail future

Each brand has their own ideas about the main focuses for 2018. Unilever Philippines hopes to e evaluate its mobile experience to understand if it’s delivering the brand message across the board.

“Omnichannel is the big trend that is here to stay in the Philippines. We need to provide consistent online and offline experiences and preserve the quality of our products both instore and online,” comments Kay. “80% is coming from mobile websites and the Philippines is actually the fastest growing mobile market in Southeast Asia.”

Payless Philippines wants to leverage its data to better utilize its offline stores to become more customer oriented and explore new channels.

“How can we leverage the 76 Payless stores and unify them to serve our customers better? We have online data, consumer data so we can map out our merchandising plan for various locations.”

“Social commerce, exploring the space that we’re not in [social media] but also stores (they can be turned into fulfillment centers). Customers are becoming brand agnostic. We need to capture them when they are on their devices, not only at the mall, people no longer go online, they live online.”

Titan, on the other hand, will focus on expansion through ecommerce to meet the demand growing outside of Metro Manila.

“The challenge for Titan is all our physical stores are in Metro Manila while 50% of consumer base is outside Metro – we will continue to build on it and see what role innovation really plays for us.

“At the moment, ecommerce is more defense than offense, but when you start playing offense is when you start to win.” — Dennis Tan, CEO and owner of Titan22

“It used to be that companies had to set up a website because everyone was doing it but the companies that have their own internal ecommerce teams are the ones that are most successful, you need to be ones to drive and grow it in the organisation.”

Dennis Tan from Titan22


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For more charts & graphs, check out our database.

One of the biggest pain points that most brand managers in traditional companies experience is internal push back when trying to drive their ecommerce initiatives forward.

Why is this?

Headlines like this:

Online sales eating into offline retailers profits
Ecommerce is killing traditional retail
Five signs that stores (not ecommerce) are the future of retail
The advantages of ecommerce over traditional retail

And this,

Ecommerce Case

A fashion item sold in store or online is still a sale made for the company. Source: ONESTOP

Creating an online retail channel requires resources and that could cause other departments to feel threatened but headlines like these create a ‘this or that’ type of mentality even within companies.

No matter which channel the sale is made, it’s all money going into the company’s pocket.

Given that online retail is usually pitted against traditional retail as “the enemy”, ecommerce managers have the uphill challenge of proving that this isn’t the case and actually, sometimes the complete opposite.

Re-thinking a traditional mindset

Fighting for more resources to be allocated to ecommerce becomes a struggle given the unpredictable nature of success online.

Open an offline store in a popular shopping center and it’s almost guaranteed to generate sales. Open an online store and fear that it will be lost in a sea of better keywords, better product images and even hungrier digital agencies.

But ecommerce is not new competition, it is simply another shop down the street that showcases what your brand is about. It can also be used to drive more foot traffic to your shop if conducted correctly.

Once the mindset, “you against me” is reversed, can ecommerce channels thrive on behalf of the brand.

The company will slowly learn a new business model described as “unified commerce” – where retail and the internet are not siloed but managed to complement one another.

Being able to utilize the internet to resurrect a brick-and-mortar brand will be vital to many brands currently stuck in an in-between situation.

Payless Shoesource in the United States is planning to close up to 500 of its stores for bankruptcy reorganization but will continue its operations in the Philippines – a market that they advocated for ecommerce almost since its inception in the country.

“It will be business as usual for Payless’ international operations, including the Philippines, as these business segments have been doing well and are profitable,” SSI Group Inc. said, Payless Philippines official distributor.

Making the ecommerce business case

Payless Philippines Ecommerce Project Manager, Thea Lizardo, spoke to a select audience at the ecommerceIQ x Google Ecommerce Masterclass in Manila earlier this year to share a few tips for managers advocating ecommerce internally.

Have a champion

This can be any individual in the company, preferably someone in the C-level ranks, who supports your mission to build a digital channel. When requesting for a larger budget or during monthly reporting, this ‘champion’ should be able to ensure enough resources are available to reach your growth targets.

ecommerceIQFrom experience, Thea knows that reporting may look deceiving to outlookers but that ecommerce managers should be able to understand and explain the numbers.

Brand milestones – highs – are usually followed by dips as the company reassess and allocates more spending to build the ‘front-end’ business (demand generation) by focusing on optimizing marketing, mobile, and product assortment, etc.

Employee advocacy

Often overlooked, a company’s employees can be the number one source for low-hanging free advertising fruit. As shared by Thea, 1,000 employees can be responsible for reaching one million customers, or creating 5,000 unique pieces of content all about your brand.

Their involvement in the company’s success online and knowledge of the ecommerce department’s progress will also build a sense of community and ownership.

ecommerceIQ Payless

Payless Philippines Ecommerce Project Manager, Thea Lizardo speaking at ecommerceIQ x Google PH Masterclass 2017

Here’s what you should know:

1. Vietnam’s online travel market is valued at $9 billion in 2020

Up to 45% of Vietnamese internet users book hotel services or air tickets, with the figure increasing by 11% annually, according to Vietnam’s deputy director of the Ecommerce and Information Technology Agency, Lai Viet Anh.

The number of travelers booking tours online has increased considerably in the last two years. About 4,000 travelers booked tours online in 2015 and it increased by threefold last year (12,000 travelers). In the first half of 2017, the number of travelers booking tours online was equal to that of the entire year of 2016.

Forecasts say Vietnam’s online tourism market’s value may reach $9 billion in the next three years.

Read the full story here.

2. Didi Chuxing partners with car booking company Careem

Chinese ride-hailing company Didi Chuxing has announced a new partnership with Middle East transportation company Careem to further its expansion in North Africa and the Middle East.

With 12 million customers, Dubai based Careem has overtaken Uber within the Middle East since its launch five years ago, with investors such as Germany auto company Daimler, and Japan’s Rakuten.

Didi’s expansion into the Middle East will put it head-to-head with Uber, who have already gained ground within the region.

Read the full story here.

3. Payless emerges from bankruptcy

Payless is set to emerge from bankruptcy after disposing of half of $847 million of debt it had built up under its private-equity ownership.

Payless has closed roughly 700 mostly mall-based US stores, but is opening four mega stores here to add to some 3,200 post-bankruptcy locations in the US and abroad, and plans to invest $234 million over five years.

The company is banking on a strategy focused primarily on brick-and-mortar sales at a time and can withstand the onslaught of ecommerce.

Read the full story here