MALL operators and retailers are encouraged to amplify their holiday marketing initiatives to stimulate holiday spending.
In its latest market report, Colliers Philippines said holiday bonuses and additional remittances from Filipinos working abroad are likely to boost Filipinos’ purchasing in the remaining months of the year.
“Retailers and mall operators should seize this additional push for Filipinos’ propensity to spend,” said Joey Roi Bondoc, Colliers director for research.
The Philippines is renowned for its early and extended Christmas celebrations. Its Christmas season often starts as early as September. In Cebu, it can continue well into January with the celebration of Sinulog.
During the holiday season, retail sales typically increase and lead to additional hiring of employees to manage the higher customer traffic and meet the demand for goods and services. It is also during this season when manufacturing firms increase their production, leading to additional orders for raw materials and components.
“We see a strong fourth quarter retail due mainly to holiday-induced spending,” said Bondoc.
As Filipinos have started revisiting physical mall spaces, Bondoc emphasized the importance of revitalizing mall activity centers and organizing a diverse array of events, ranging from wedding fairs and bazaars to housing summits. These events have the potential to not only attract consumers to visit malls but also encourage them to stay longer and spend more.
Moreover, Colliers said mall operators should also carefully reassess the retail mix that they will offer their consumers given the entry of more foreign retailers and the expansion of local ones.
Bondoc said this will especially be crucial for new malls that will open in the fourth quarter and are planning to maximize holiday spending from Filipinos.
They should also ramp up the omnichannel shopping experience of their consumers.
An omnichannel shopping experience is a retail strategy that provides customers with a seamless and integrated shopping journey across multiple channels, such as physical stores, e-commerce websites, mobile apps, social media and more.
“In our view, redesigning of physical mall spaces should be complemented by the improvement of retailers’ online shopping platforms. We see a continued reconfiguration of physical mall spaces and we see this trend even after holiday-induced spending in the fourth quarter of 2023,” the report said.
Consumer confidence will also be a barometer of Filipino shoppers’ purchasing power.
The latest data from the Bangko Sentral ng Pilipinas (BSP) showed that Filipino consumers remain optimistic with the outlook index increased to 7.8 percent from 4.6 percent a quarter ago. They anchored this increased optimism on expectations of more available jobs, additional sources of income, higher income, an increase in salary, and stable prices of goods.
Consumer spending is more upbeat for the fourth quarter as the confidence index increased to 40.9 percent from 36.9 percent in the previous quarter’s survey results, which suggests that the pace of consumer spending may accelerate in the next quarter.
In particular, spending may increase at a faster rate for the following consumer items: food, non-alcoholic and alcoholic beverages, and tobacco; clothing and footwear; house rent and furnishing; water; electricity; fuel; medical care; transportation; communication; education, recreation and culture; and personal care and effects.
The BSP surveyed 5,272 households for the Third Quarter Consumer Expectations Survey, which was conducted from July 3 to 14, 2023.