CEBU, Philippines - Although the retail sector is anticipating a better year in 2011 as the global economy shows signs of recovery, industry players on the other hand are facing another challenge brought about by the new facets in consumerism.
As globalization changes the way people shop, so with the advent of the world-wide-web or the Internet. These two factors have given a challenging outlook for retail players, although the appetite for consumers to buy or shop is improving, said Philippine Retailers Association (PRA-Cebu) chairman Jay P. Aldeguer.
Industry-wide, Aldeguer said its hard to make a sweeping statement on the outlook of the retail sector in 2011, because the attitude of consumers now have changed dramatically, and are influenced by so many factors.
The attention span of this generation’s consumers is very short. Unlike in the past that established brands and products can thrive even with less investment on advertising and promotions. Today, having good products is not enough. Retail players should constantly innovate and spend more on advertising in different channels, including in the Internet, social media, aside from the traditional tri-media channels.
In the retail sector, those who are investing on marketing and innovation are the only survivors in the highly competitive market. Even the established brands and stores which have been there for years, can be outsmarted with new entrants in the industry, if players will continue to be complacent, Aldeguer said.
Aldeguer mentioned that advent of social networking such as Facebook, and the existence of Bloggers in the Internet have made a significant impact on consumer preferences.
People are so trusting—even on strangers. Bloggers whom people do not know of even can generate impact on consumers.
“Reactions now are so fast. Everybody knows instantly about what’s new, what’s not to try, or must try product and services,” he said adding that these among other factors that affect the choices of consumers have to be dealt with seriously by retail players.
“The world is changing. So with the retail game,” said Aldeguer, whose company owns the chain of Island Souvenir Shops in the Philippines, and other tourism-related businesses.
Generally, the retail sector is anticipating another promising year for the industry, especially in Cebu where economic drivers are tourism and BPO (Business Process Outsourcing). These drivers could surely boost the retail sector in the province.
However, the retail players should look at another dimension of challenges, where competition is tougher, and consumers’ attitude is too complicated.
A brand for instance which will stop making presence in the different medium like Internet, newspaper, magazines, radio and TV, should take extra careful, while consumers now can easily forget the existence of a certain brand---with so many choices in the market.
Investing on innovation is one of the top drivers for retail growth starting 2011. This means, that retail players should make constant innovation of their products and services, while giving value for money and good service is already “given.”
In fact, in 2010 performance of the retail players in Cebu was mixed. Aldeguer said there were shops that enjoyed good performance, but there were also stores that reported flat growth.
Growth in the retail sector, depends largely on the ability of the retail player to “dance with the music” in the changing sound-track of retail journey. Aldeguer emphasized that those who are brilliant enough to grasp the shift of consumer attitude are the ones that will benefit the promising retail industry, in the year considered as the “gateway” to recovery—2011.