Interview: Ben Chan
How has retail liberalisation altered the domestic landscape, and what role has franchising played in bringing foreign ideas to the market?
BEN CHAN: The results of retail liberalisation have been nothing less than dramatic. The retail landscape of the Philippines is barely recognisable from the way it was just 10 years ago. Whereas many Filipinos used to travel to Hong Kong or Singapore for a global shopping, dining and leisure experience, now we have all of that in Metro Manila.
The most striking feature of this liberalisation is how global it is. The foreign retail market used to be dominated by US brands and a handful of really well-known European ones. Now we have Scandinavian, Japanese, Australian, South American, Canadian, Israeli and other foreign-owned franchises competing side by side in one mall.
Franchising has played a huge role in making this happen. Our company both franchises its own brand, Bench, and acquires foreign ones. This practice has created a dynamic exchange of ideas within our company, something that is replicated in the retail market as a whole. Each franchise comes with its own business model and its own point of view, so when one franchiser or franchisee exchanges business models with another, much growth and learning comes as a result. The consumer benefits from this immensely, as standards are raised, quality is improved, and knowledge is shared and imparted, which in turn fuels growth and more demand for other new ideas and concepts.
How has the proliferation of malls affected retailers? What are the challenges in further extending penetration outside Metro Manila?
CHAN: We are now very motivated to fill those new mall spaces with the most exciting and inspiring retail concepts we can find in the world. The new malls are providing customers with a complete lifestyle experience, where you can spend a whole day there and have all your needs met, from shopping and dining to lounging and entertainment. It is completely aspirational. As a retailer, you have to cater to that desire and take a lifestyle approach to the way you do retail. You have to be very meticulous about the lifestyle message that your store wants to deliver, because if it resonates with the lifestyle to which your target customer aspires, then you will have an increasingly loyal clientele who will keep coming back for more.
Advancing outside of Metro Manila is an organic process that will take more time, since customer habits there are a bit slower to adapt. The malls in the second and third biggest cities, Metro Cebu and Metro Davao, will inevitably carry the biggest and most successful brands already found in Metro Manila, and will usually follow the trends set by Manila.
What have been the challenges to building brand loyalty and consciousness in the Philippines?
CHAN: The biggest challenge is that there are no longer any set rules or formulas for establishing brand loyalty and brand consciousness. There used to be a sort of tried and tested technique to creating brand awareness and public relations, but that is now giving way to new methods of promotion thanks to the internet, blogs and social media. Nowadays, a retailer is not just a purveyor of products and services but also a disseminator of information. You have to keep feeding the public with posts on Facebook, Twitter and Instagram; you need to upload videos on YouTube; you need to be in the news; you need to be on top of celebrity culture. Your customers appreciate it when you send them text messages and emails about the latest offerings in your store. You get instant feedback as well, which keeps retailers on their toes. Because of this flow of information, retailers are now working at a very fast pace. Brand loyalty is an elusive thing given that customers are more responsive than ever to new products.
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