By Ehda M. Dagooc (The Freeman) Updated December 24, 2010 12:00
CEBU, Philippines - What was considered as an artificial retail boom in the first half of 2010 due to the election season, was surprisingly sustained all throughout the year, a testament that the perceived global crisis has not hit the bottom ground of the consumers’ pockets.
Philippine Retailers Association (PRA-Cebu) chairman Jonathan Jay P. Aldeguer said that the year 2010 has given the retailers’ a glimpse of a more lucrative business ahead, while performance of most retail chains have continued to post encouraging performance even after the election money was gone.
However, the retail sector in Cebu has seen another facet of consumer attitude brought about by the social networking phenomenon. Christmas season shopping came in so late, compared to the traditional busier November to December retail trade.
Aldeguer said people now shop in the ninth-hour for Christmas shopping unlike in the past, “it is because people have a lot of activities today than ever. We have seen the most number of [school] reunions due to facebook—making people busier with so many activities to attend to, putting shopping as the last priority.”
According to Aldeguer, the sluggish Christmas shopping performance of the new generation of consumers was not because people don’t have money, “but because “people’s attention now is divided.”
Although, the general observation in the retail industry for 2010 was good, compared to the last few years, Aldeguer said there are also stores that registered flat growth, while others are enjoying the active consumer market.
The volume of spending mostly goes to food, specialty shops, and whoever has been able to hit the attention of the consumers. Meaning, no matter what the retail outlet is selling, what is important is retail business should employ a continuous marketing and innovation.
It’s hard to identify though, the retail segment winners for 2010 Aldeguer said. What is clear is that those stores which continually adopted innovation, aggressive marketing investments, are the ones which also performed well.
Cebu’s consumer community has continued to be active, as if “money is not a problem” for most of them, Aldeguer said. Moreover, the increased number of tourists that visit Cebu all-year-round has fueled the retail performance all the more.
What is interesting now, with the changing consumers’ culture, is that “it’s no longer enough to have a good product alone.” What is more important now is making the “good product” be present all-the-time in people’s mind. This means, that spending into advertising in different medium channels is a compulsory requirement now—more than ever.
“The attitude of the consumers now has changed dramatically. The reaction is so fast. The social networking has also gained importance in shaping the consumer’s preferences. Blogs have entered into the picture and generate significant impact,” Aldeguer said.
Initially, retail players here projected an unpredictable and highly sensitive performance towards the second half of 2010, as the first half’s good growth figure was largely due to the election spending.
“The consumer spending seems to be up in the second semester of this year, maybe this is because of positive outlook of the market towards the new administration,” said Philippine Retailers Association (PRA-Cebu Chapter) president Melanie C. Ng.
Usually, she said the first few months of second half of every year, is considered as lean months for most retail players, however, the dynamism has sustained up to this time.
However, despite the positive outcome on retail sector, Ng said players are remained cautious in their operations, while the attitude of buyers now are constantly changing and highly sensitive on pricing movements, value added offerings and customer service programs.
Bringing up price of any consumer good is the last thing to be implemented by retail players now. Despite the active market, retailers are still “tightening their belt” in increasing profitability.
In fact, the game now is competing on value added services and good customer service, Ng said.
“We are very cautious on increasing our prices in any consumer good, unless it is already needed. The consumers’ buying attitude now has changed, providing value added services to customers is now the top priority,” Ng said.
Last year, the Cebu retail sector grew in a low-double-digit figure, Ng hopes that this year, the industry will hit the high double digit growth.
According to Ng, the retail sector in Cebu which dynamism is fueled by the increasing investments and employment generation of Business Process Outsourcing (BPO) and sustained growth of OFW (Overseas Filipino Workers) remittance is on its way to take full advantage of the recovering world’s economy.
Also, the sustained growth in tourism has also helped the retail industry in Cebu alive, despite the global economic challenges.
Although, she said the current performance is still incomparable to the pre-crisis levels.
In general, Ng said Cebu still offers a fertile ground for retail businesses, provided that retail players are willing to sacrifice a very thin profit margin, and put their focus on providing good service and quality products to consumers. (FREEMAN)
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