MANILA, PHILIPPINES – Convenience is the top priority for Filipino shoppers when it comes to choosing retailers, according to the 2019 SmartShopper study of Kantar, the world’s leading data, insights and consulting company.
The Kantar SmartShopper Study is an annual report that combines shoppers’ actual behavior with their perception of retailers across a number of attributes. The study is conducted by the Worldpanel Division of Kantar, leveraging a survey 2,000 urban households nationwide from July 2018 to June 2019.
Convenience is King
Kantar data shows that convenience has consistently been the most important factor Filipino shoppers consider when choosing where to purchase FMCG goods since 2015. However, the shoppers’ definition of convenience continues to evolve. In the past, convenience meant accessible location. But today, the number one factor that makes shoppers consider a retailer convenient are the range of services offered by a retailer to make shopping easier. This includes payment assistance, specialty counters, car parking assistance, baggers assistance, price checker and kiddie carts. The second most important attribute is the accessibility of the retailer’s location.
“Shopping is expected to be more pleasurable and easier as lifestyles become busier and fast-paced. Retailers thus need to be sensitive and more creative in finding ways to cater to these customer expectations. When this happens, customers not only spend more time in the store but their frequency of visiting potentially rises as they become more loyal to these stores,” Des Deocareza-Lozano Kantar, Worldpanel Division Director shared.
Emerging Channels on the Rise
With the increase of FMCG product sales also comes the rise of Emerging Channels which include hyper/supermarkets, department stores, convenience stores, personal care stores, direct selling, drug stores, gifting, and groceries. These Emerging Channels now accounts for 50% of the FMCG market. It grew by 16% percent, double the growth of Traditional Trade channels, which as a result lost shares from 45% to 43% today.
As Modern Trade channels aggressively expand, the top Modern Trade retailers continue to reap the rewards. According to the Kantar study, the top 5 Modern Trade retailers, namely Puregold, SM, Gaisano, Mercury Drug, and Robinsons, collectively account for 15% of total FMCG sales. These five retailers enjoyed significant growth in the past year, with Puregold and Mercury Drug both growing the most in value shares. Puregold has grown its value share to 4.6% from 4.1% in previous year while Mercury Drug improves from 2.4% to 2.6 today.
The study also suggests some specific steps retailers can take to solidify its foothold in the Modern Trade space. For example, by providing a more pleasant shopping atmosphere, Kantar’s SmartShopper 2019 study projects that one of the top Philippine retailers can further boost sales growth by as much as 5%.
“We need to constantly think about what drives shoppers to buy in specific channels as they become more complex and demanding. Convenience as we know it today may be redefined and can become a ‘given’ for shoppers. Both manufacturers and retailers then need to bear this in mind as they map out their growth plans this year,” Deocareza-Lozano added.
