Innovating the in-store experience

Because Filipinos are tactile shoppers — especially for big-ticket items — companies must continue to find ways to optimize and innovate the in-store experience via digitally-enabled commerce

Filipinos want to know what they will be getting, and no ecommerce experience can approximate the qualities they can only get in-person. AFP

While the rise of ecommerce routinely grabs the headlines in the Philippines, its close cousin, digitally-enabled commerce, is also fast growing. Allow me to distinguish between the two. The shopping experience on ecommerce is fully digital: You can browse products, read reviews, examine specs and then purchase your item.

Digitally-enabled commerce is when some aspect of the brick-and-mortar shopping experience is aided by tech solutions. This segment is growing rapidly and points to some characteristics of Filipino shoppers that will be hard to shake, no matter how advanced ecommerce becomes.

One flagship example of digitally-enabled commerce comes from the partnership between SM Appliance Center and on-demand logistics platform Mober. Prior to this partnership, SM customers had to wait 36 to 72 hours for their bought item to be delivered to their home.

Through Mober’s enterprise web application, which can be accessed at SM claiming counter, customers can now book same-day delivery for fees varying between P450 to P750. An impressive seven out of 10 customers are now opting for SM’s same-day delivery service.

That a brick-and-mortar retailer has successfully augmented its customer experience with an on-demand platform highlights certain characteristics of Filipino shoppers that may always be better suited to digitally-enabled commerce versus ecommerce. These characteristics are important for founders across the region to take note of because similar cultural nuances may be present in their own markets. Catering to these nuances will create a better customer experience in traditional retail.

Filipinos are tactile shoppers. It may strike some people as strange to go to an SM Appliance Center to buy an item, only to then opt for same-day delivery. If they wanted the convenience of a speedy delivery, after all, why did they not just order online? The answer in a word is touch.

It’s been noted in survey after survey that Filipinos like to feel what they will buy in hand, no matter if it’s a living room couch or a flat-screen television. Filipinos want to know what they will be getting, and no ecommerce experience can approximate the qualities they can only get in-person, like what it feels like to sit on that couch or how heavy a television is.

Because Filipinos are tactile shoppers — especially for big-ticket items — companies must continue to find ways to optimize and innovate the in-store experience via digitally-enabled commerce.

Filipinos prefer a quicker shopping experience. Many brick-and-mortar retailers in the Philippines still suffer from delivery times lasting up to several days or even weeks. Such has often been the norm in the industry because there has been little incentive to change.

— the largest appliance store chain in the country — is boasting of same-day delivery, the onus is on other retailers to catch up. If a customer pays for an item, he should not have to wait a substantial amount of time to be able to receive that item and realize its value. The window between purchase and delivery should be small, just as Mober and SM have pioneered together.

There are other parts of the in-store process that can still be further optimized, including everything from browsing and item comparison to checkout and payment. Innovating these other parts of the shopping experience will appeal to the Filipinos who still want to shop in-store, but who also appreciate the speed and convenience that only digitally-enabled solutions can bring.

Filipinos customers can be prosumers. Prosumers is a recent term that has gone in vogue in tech. It refers to consumers who are willing to pay for a more premium, higher end experience over a free or cheaper, lower quality experience. This is evident in the Mober case study. As noted above, same-day delivery fees via Mober for SM customers cost from P450 to P750.

That so many customers are willing to pay delivery fees for the convenience of getting a product the same day points to opportunity across the brick-and-mortar retail experience. What other parts of the shopping experience can be enhanced with solutions that customers would be more than happy to pay for? The answers here will yield other key, value-add solutions to traditional retail.

The shuttering of Borders in the United States and other high-profile retailers has created a narrative of ecommerce versus brick-and-mortar retail. That narrative may very well be true in markets like the United States, but it only partially applies to the Philippines and other markets in Southeast Asia.

There are too many cultural nuances for customers to completely forgo traditional retail. In this environment, shrewd founders should look for ways — like Mober did with same-day delivery — to innovate the in-store shopping experience. Just because something is traditional does not mean it should be free of innovation. Founders across the region should find ways to reinvent the in-store shopping experience.