Retailers urged to ramp  up holiday marketing

CEBU, Philippines —  Retailers and mall operators are urged to ramp up strategies to take advantage of the holiday spending nearing Christmas season.

Colliers Philippines market study revealed that while Filipinos have returned to brick-and-mortar shopping, retailers should also consider the segment of Filipino shoppers that continue to buy online.

“Redesigning of physical mall spaces should be complemented by improvement of retailers’ online shopping platforms,” said Colliers Philippines director for research, Joey Roi Bondoc.

“We see a continued reconfiguration of physical mall spaces and we see this trend even after holiday-induced spending in fourth quarter 2023,” he said.

While a strong retail growth trajectory is seen towards the fourth quarter, Colliers also warned retailers to prepare and draw strategies on sustaining the active shopping market.

“The challenge for mall operators and retailers is how to sustain footfall especially now that the impact of revenge spending is starting to dissipate,” Bondoc added.

Colliers suggested that shopping malls and retailers should amplify holiday marketing initiatives, as holiday bonuses and additional remittances from Filipinos working abroad are likely to boost Filipinos' purchasing power towards the fourth quarter 2023.

“Retailers and mall operators should seize this additional push for Filipinos' propensity to spend,” Bondoc said.

It is also high time for mall operators to maximize consumers' willingness to visit brick-and-mortar mall spaces and participate in various activities held in malls' activity centers. Events such as wedding fairs, bazaars, and even housing summits can entice more consumers to visit malls, stay longer and even spend more.

Colliers believes that mall operators and retailers should closely coordinate in curating events that will be held in malls' activity centers.

Reassess retail mix

“In our view, mall operators should carefully reassess the retail mix that they will be offering their consumers given the entry of more foreign retailers and expansion of local ones. This will especially be crucial for new malls that will open in fourth quarter 2023 and are planning to maximize holiday-induced spending from Filipino consumers,” Bondoc added.

While majority of retailers that will occupy physical mall space will be from the food and beverage (F&B) segment, mall operators should thoroughly assess the ideal retailers that they will be featuring in their malls alongside the typical F&B (food and beverage) accessories, and personal care retailers.

In the third quarter 2023, F&B and fashion retailers led physical mall space absorption. Over the next six months, these retail segments are likely to cover nearly 80 percent of new physical mall space take-up.

Likewise, mall operators should carefully study which retail mix will provide them with optimal level of spending from consumers as well as sustained footfall for the long term.

The Philippine economy is primarily consumption-driven, and this entices foreign retailers to invest in the country. The Philippine Franchise Association (PFA) also supports this positive sentiment on the country's retail sector.

According to analysts, the impact of revenge spending is starting to dwindle. This potential decline in personal consumption is likely to be offset by holiday-induced spending, with the fourth quarter of every year traditionally a strong period for retail given the release of employees' holiday bonuses and spike in remittances from Filipinos working abroad.

Colliers believes that the challenge for retailers and mall operators is how to sustain footfall in physical retail spaces and entice consumers to stay longer and spend more.

Experts at Colliers believe that the careful curation of retail mixes and events in activity centers and high-density retail areas will likely play a crucial role in stoking retail spending for the remainder of 2023.

Consumer confidence will also be a barometer of Filipino shoppers' purchasing power for the next 12 months.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that Filipino consumers remain optimistic with outlook index at 18.9 percent in third quarter 2023 from 20.5 percent in the second quarter 2023.