The new normal in Philippine retail

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Photo from: pexels.com

By: Inquirer.net

Colliers believes that the COVID-19 pandemic and the lockdown are likely to redefine shopping experience in Metro Manila.

Even if the government fully relaxes the lockdown imposed throughout Metro Manila, subsequent personal distancing protocols likely to be implemented will reduce consumer traffic. This, in turn, is likely to result in a slower absorption of retail space all over Metro Manila.

Colliers projects vacancy rising to 12 percent in 2020 from 9.8 percent in 2019. In our opinion, the reduced mobility, observance of physical distancing and aversion towards the use of physical currency present opportunities for mall operators and retailers as these are likely to form part of the new normal in Philippine retail.

For a consumption-driven economy like the Philippines, we are optimistic that mall operators and retailers may still tap pent-up demand. Stakeholders in the retail sector should be proactive especially with the projected rebound in economic output, recovery in overseas Filipino workers’ (OFW) remittances, and the potential impact of social amelioration programs on consumer demand.

Online shopping to drive retail

By expanding online strategies and partnering with apps to facilitate seamless delivery, retailers should be able to offset any softer retail demand due to the COVID-19 pandemic.

Based on the results of a Colliers Philippines survey, women have a higher daily internet usage than men. Close to 60 percent of the female respondents spend seven hours or more online while only 45 percent of males allot the same amount of time. Respondents of the survey would usually allot around 3 to 3.5 hours daily on online shopping.

The survey also showed that the daily internet usage and time spent on online shopping increases with age. Those 51 years old and older spent more than 10 hours a day online, with online shopping reaching as much as half that. Younger respondents (21 to 30 years old) spent on average three to six hours a day online with two hours of that on online shopping alone.

This supports one of our recommendations that retailers should increasingly target older shoppers and senior citizens. There should be a seamless online shopping experience, from adding items to cart to checking out using credit cards.

 

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