Having a physical presence is more important than ever in the Philippines
While many bricks and mortar retailers have moved into online retailing some time ago, the reverse is now happening too. In the Philippines, Lazada and Zalora are but some of the ecommerce players that are tapping into the offline space. As consumer tastes evolve, physical retail can play a key role in allowing retailers to engage with shoppers in new and innovative ways.
Filipino consumers want to interact with products
According to recent research by Tofugear, 89% of Filipino consumers visit stores because they think it is important to try on and see products in real life. Meanwhile, over half say they research products online, but then end up buying it in a store because they want to physically interact with the product. Retailers that have set up offline presences are therefore able to better satisfy customer needs in such aspects – although this may be more relevant for some categories such as fashion or furniture than others.
Setting up offline helps retailers achieve omnichannel retail and build branding
For retailers, one main advantage of setting up an offline presence is being able to achieve omnichannel retail. A 2019 survey by Tofugear found that achieving omnichannel is the single biggest challenge that retailers in Asia are facing. Stores can also help build brand awareness and engage shoppers in ways that is not possible through the online channel.
Zalora’s experience with physical retail in the Philippines
Zalora set up its first offline presence in the Philippines in 2015, and has continued to experiment with offline stores and pop-up events since. The online fashion retailer initially opened a Digital Pop-Up store at EDSA Shangri-La Mall in Mandalyong City. Through the store launch, Zalora aimed to bring fashion products closer to customers whilst increasing the convenience of online shopping.
While shoppers could see, touch, and try on clothes at the store, they could not take them home immediately. Instead, products could be bought by scanning a QR code and purchasing through the Zalora app, or alternatively using in-store tablets or laptops to place orders for home delivery. Doing so enabled Zalora customers to touch and experience products, yet at the same time gain experience in online shopping.
Fast forward to November 2019 and Zalora launched the fifth iteration of its Pop-Up Store at the Greenbelt mall in Makati, where it collaborated with fashion, sports, beauty, and lifestyle brands such as Nike, Make Up For Ever, Benefit Cosmetics, G Active and Something Borrowed.
There is a heavy emphasis on experiential retailing, for instance through a virtual fitting room for Nike apparel and shoes, a beauty station with Make Up For Ever, Benefit Cosmetics and a wide variety of fitness classes hosted by G Active and partner gyms such as Bare, Flyweight Boxing, Anytime Fitness.
Considerations for retailers moving into physical retail
Not only did Zalora open offline stores to step up its omnichannel strategy, but also to educate local consumers about the benefits of ecommerce, which is still lagging behind other countries in the region. By partnering with different fashion brands through offline pop-up stores, Zalora was also able to build its reputation as a trusted fashion etailer amongst consumers and gain additional sales rather than focusing purely on the online channel.
However, moving forward, it is not advisable for online retailers to expand offline just for the sake of being omnichannel. Retailers should set clear objectives of what they want to achieve as well as the investment requirements – after all, rents can be an expensive matter for smaller-sized retailers.
At Tofugear, we encourage retailers to use pop-up stores as a way to test how your customers – as well as store staff - interact with new technologies that create a more frictionless shopping experience. Last but not least, retailers must ensure they provide a consistent brand experience across all channels as well as consistent pricing – which are major frustrations for shoppers in the Philippines.