Crisis prompts Pinoys to save more

CEBU, Philippines - A research conducted by Nielsen Company (Philippines) Inc. indicated a drop in consumer index and a growing trend towards savings.

In her presentation on retail marketing and tips during the 3rd Regional Retail Conference organized by the Philippine Retailers Association held at the Parklane International Hotel, Mary Margaret C. Martinez, associate director for retail services of the Nielsen Company (Philippines), Inc. said that shoppers’ mental state and buying behavior have been affected by the current economic outlook.

Martinez said that according to the latest Nielsen data, shopper’s trend for 2009 and retail index, the country’s consumer index has dropped by six percent, however the Philippines’ consumer index is the sixth highest index among 60 countries in the world.

She said that the confidence level of shoppers have also declined while spending on essentials like new clothes, technology, tourism, investments, out of home entertainment have gone down and there have been lesser shopping trips and shopping now turned to smaller basket sizes.

However, she stressed that the county is still second in spending over new clothes and new technology and the eighth in home entertainment spending and the fifth paying off credit card debts.

She said that the current economic crisis has noted negative volume for consumer spending along with the unit sales decline of consumer products however the value is still up because of inflation.

“Pinoys believe that its not a good time to spend and their spare cash is now consistently placed to savings. However, their outlook has become optimistic that this recession may last shorter as expected and this in turn provides a positive business prospective as consumers confidence improve; consumer spending will eventually follow,” said Martinez.

She said that there has also been a noted growth of private label consumption and shoppers are now shifting to nearby stores to save on their expenses like transportation.

“There is slowdown of shopping trips and reduced spending while promos are now considered. But there are still optimistic news because out of 60 countries, the country ranks six in the confidence level of shoppers and slowly we are gaining back that confidence thinking that there is still sunshine after the storm,” said Martinez.

She said that it is important that retailers are aware of the changes in consumer shopping behavior and lifestyle so that they might not overlook obvious opportunities in the marketplace.

“There is a focus on more essential items that is purchased whenever need arises; there is also a shift in going to nearby traditional stores like sari-sari, wet markets and convenience stores. Key store attributes also impact consumer buying behavior because now they prefer convenience in location, wide variety and as well as product affordability and value as they have become more conscious on pricing,” said Martinez.

She said that the Visayas region top the list for the most price sensitive shoppers in the country and this should be a challenge to retailers in the area.

“There is a need to understand consumers better now so retailers should look at the micro and macro view of the consumer buying trends. Filipinos will not stop buying so we should adjust to their needs and demand for convenience and value for money, so should do more promotions, assortment, innovations, and store improvements to induce purchase,” she said.