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“Breathing Life Through Omnichannel: Philippines' Retail Market" with Chris Fong| Episode 15

This week, we have a very special guest on The Future Of Retail Asia Podcast, and he is none other than Chris Fong, CEO of M2Cash, and a partner of Aimazing in the Philippines! Chris brings incredible insights from his rich experience working with multiple huge malls and retailers in the Philippines. In this episode, Chris expounds on the ways that consumer expectations have shifted as a result of Covid, and how malls and retailers can remain competitive and stay atop of these expectations. Chris also brings in specific use cases and case studies that have seen massive success in the Philippines market, using them as an exemplar of how technology can truly supercharge a mall or retailer’s promotional strategies.

The Future of Retail Asia, now streaming on Spotify, Apple Podcasts, and Google Podcasts. View the video and full transcript below. Enjoy!

Episode 15: “Breathing Life Through Omnichannel: Philippines’ Retail Market” with Chris Fong

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IMRAN: Welcome back The Future of Retail Asia, one of the world's top 50 best retail podcasts! My name is Imran.

Jun: And I am Jun. Today, we have our first guest from the Philippines, Chris Fong. Welcome Chris!

IMRAN: Welcome!

Chris: Thank you.

IMRAN: Chris is currently the CEO of M2Cash Corporation, which has their HQ at Metro Manila, a company that has been serving the industry for more than a decade as a leading IT consultant and service company with proven expertise in O2O marketing strategies, digital customer experience and solutions. Chris also has experience in both e-commerce and physical retail, previously serving as the director of e-Commerce Philippines for the past decade and the CIO of SM Supermarket arm, working with some of the largest brands and retailers in the Philippines. Welcome again, Chris!

Jun: Yeah, I think we are very excited to have you on the show. Very very excited to discuss about the retail industry in the Philippines. Where we want to start off today is, how the retail industry in the Philippines is currently doing? And how have the malls across the country coped with the pandemic, and how has it affected the development of the industry there?

Chris: Very much like the other countries within the SEA region. Everyone has gone digital, as we know now, because of the pandemic. A lot of them have opened up their ecommerce stores. They started working with delivery aggregators and also a lot of other initiatives with regards to going digital. Just to avoid the face-to-face or human contact. We’ve seen this with even the smaller SME companies all the way up to enterprises. It is interesting now, cause we see a lot of enterprise companies, their CEOs are coming out and really leading the charge on this one. You can see them being quite active on Facebook or Twitter trying to promote their new channels themselves, since they are not doing much as well at home. It’s quite interesting to see the dynamic on how all these companies decided to reinvent themselves and go onto the digital platform. Especially for brick and mortar. I don't think that traditional companies in the past for the brick and mortar have tried. The Philippines is quite known to be traditional. And so a lot of these, especially retailers, brick and mortar retailers. They are quite happy with their footprint all across the country. But what do you do when the customers can’t come to your stores? They are not as tech-y, or as familiar with technology themselves. So a lot of them rely on the next generation, and outside consultancy or digital vendors to help them with the migration. But it’s been quite, quite good locally actually. In terms of digital adoption, especially with regards to payments and e-wallets. Given that those are necessary to complete the ecommerce loop. So yeah. This pandemic has really brought that about in all aspects. But traditional retailers, we’ve seen some also fold up. Because they just didn’t know how to do that digital transformation, and just decided to call it quits. But for those larger ones, they have no options but to really ride that wave, that digital wave.

IMRAN: Great sharing! I think it has been referred to by many people as Covid being the Chief Innovation Officer for many people.

Chris: Right, that’s right.

IMRAN: Like you said, right. It has been forcing everyone, even the CEOs to come out and say a lot of statements. I think it ties in very well with the question I want to ask, which is, do you see any specific technology adoption in the Philippines in particular. What is common that we have seen throughout various countries and stakeholders we’ve talked to is, the waves of the Covid, the waves of the restrictions and lockdowns, the waves of the reopening, the waves of a lot of experimentation. Some of the retailers or some of the malls may have been going into things like experimenting with e-commerce side. Like you said, some of them have been going with digital wallets, digital payments, ,contactless. Some have been looking at things like click and collect, delivery click and collect, experiential, in-store retail. But in the Philippines specifically, did you see any specific direction of adoption in specific technologies or strategies?

Chris: That’ a really good question, because we’ve seen almost every single channel being exploited and explored by every single type of company. From messenger on Facebook or Viber as one of the local messaging apps which is quite popular to WhatsApp. To SMS. To websites. Almost every single contact point, especially Viber groups, where communities started launching their own marketplaces, which was quite popular before companies started deciding to put on their own websites. They tried conversational methods through messenger apps. Just asking their employees to create these community groups to see if they can push their products to these conversational groups. And then once their e-commerce getting online, then they would try to push that as well. But it was just a lot of different avenues that everyone tried to see which one would come up the most used case. So yeah, I think there wasn’t just one type of solution. Everyone just totally experimenting with whatever they can get their hands on. But the number one would be always the shopping cart. I think that would be Shopify platform that everyone just went crazy on to bootstrap themselves and get their stores up and going. Whether through mobile phone or through a desktop browser. I said that would probably be number one, but everyone started inventing everywhere. Even trying to get that transactional checkout into a conversation bot, like Viber, is quite a feat. But we did see some outlets trying to do that. The Philippines is out to experiment with any type of engagement, but at the end of the day, at least they were present in all different types of channels. I think that was mostly their strategy, and then find out which grew the fastest.

Jun: Interesting, we are definitely seeing more options of digital solutions. Today, we also want to use this chance, one thing we would like to talk about is the latest cooperation with Power Plant Mall. A little bit of background, every year Power Plant Mall will have a christmas raffle, and it’s a car for a giveaway prize. But the special thing about this year is that, it’s their first year of using the digital way to do the giveaway. And yes, it’s powered by Aimazing. But Chris, just want to check with you, what are some of the challenges faced by Power Plant Mall before this year when they were still using the manual way to do the giveaway. And how different was this year’s Christmas promotion with Aimazing’s solution.

Chris: Well, I think like most malls, not just in the Philippines, but in the world. Getting your tenants in the mall to participate in something where you’re trying to connect with a digital contact point, like let’s say your mall app. And your consumer is practically unprecedented in trying to make it work. You know how tenant participation is going to be a challenge there. So the way Rockwell Mall, which is an upscale mall here in the Philippines. It’s always famously known as a visited place because of their Christmas decorations at this time of the year. So it’s quite frequented and quite well known for that, even outside just approaching the mall, the entire area, Rockwell’s always well lit at night. So quite a gathering place. Their Christmas Raffle, which they have every year. They used to do it very traditionally, as I mentioned earlier. Without any type of innovation, or before Aimazing was there, they asked customers to collect their receipts from outlets in the mall and present them to a customer service person and the challenge of the customer service person in collecting those receipts and reading the receipts and making sure that they are legit receipts, that they are qualified as part of the raffle. I can’t imagine how challenging that must be to know and be a master at reading three hundred different types of receipts coming from different outlets, where to look for the receipt number, where to look for the amount purchased. Because obviously their mechanics for the raffle entails minimum purchase requirements and other data like that. So that was the way, imagine doing that in this type of pandemic, where you see a customer service booth with tons of customers lining up just to submit and be part of that lucky draw or raffle. It must be quite a challenge and so that is where Rockwell Mall really tried to innovate and work with us and Aimazing to find a better way they can provide convenience for their customers, especially now. If as much as possible there is no contact or no face to face. That is something they like to embark on, just to provide that extra layer of service and safety for their loyal customers.

IMRAN: Interesting what you mentioned right, that most malls in the world can’t provide this. Seems very simple but we are talking about thousands and thousands of customers queuing and validation and interaction time and obviously cashier and stuff. Time as well, to explain or validate these manually as well. So I think from what we understand from the project, even at this kind of halfway stage. There is a lot more customers downloading the app, there is a lot more customers participating in this giveaway. And that actually using the loyalty app. Again this is kind of seamlessly, you remove the whole customer service experience from this. At the counter, you don’t actually need to have a lot of promotion around the giveaway because every single participating transaction receives a lucky draw stub now. So suddenly if I am not a customer of the loyalty app, suddenly I have this loyalty app lucky draw in my hand, and suddenly this is completely automatic. Does this present a new stand, a new benchmark, a gold standard of how campaigns of malls should be running in the future?

Chris: Most definitely, I think from the data standpoint alone, we are seeing a lot of real time data. In the traditional method of reading the receipt and qualifying them by hand and by eyes, you’re not able to really input that data right away, or capture that in the most accurate method. So right now we're able to see all those transactions in real time, be able to make sure it is accurate and reliable. Doing so has proven a lot of benefits in the area of knowing which stores or outlets are doing quite well. In which areas of the apps also works well with customers, in terms of engaging with the receipt and that particular raffle stub which is used inside of the Rockwell app to earn the points.

Jun: Just now you mentioned a lot of benefits, implementing the loyalty program and real time lucky draw raffle and everything. We know that a lot of our audience are from malls, from retailer side. They are also curious about, what would be the challenge for the mall, especially now that we already have a project running in the Philippines. So what would a mall face when they are trying to implement a digital solution into the mall, the whol shopping mall? Just want to check with Chris, what are the common problems face when shopping malls are implementing a digital platform, and how they are able to overcome this problem?

Chris: I think that is an age old problem, which we are very glad to solve together with Aimazing. I myself used to work with a large group of companies. The largest mall developer here in the Philippines. We were one of the flagship stores as the supermarket. The age old problem is really, how do you connect all your outlets in a manner where everything is real time, as far as purchase data. So that you can execute just like an e-commerce store, where you have all these 12.12, 11.11, last minute events where you want to trigger something in real time. E-commerce of course is really easy to do, because it’s just a click of a button, and it’s all on the customer’s phone. But how do you do that with brick and mortar stores, who have antiquated or really legacy POS in-store systems. How do you bridge the gap between that and the fast paced consumer. So that’s where we come in. That’s actually our company’s motto, in bridging the gap between retail legacy systems and fast paced consumers. I think malls really are faced with that large challenge of converting them, and getting their outlets and tenants within the malls to participate in something digital. But sort of bridge that gap and find how the mall can help tenants actually get there. Since they are quite tied down with their POS systems, their legacy POS systems. Aimazing serves that O2O connection, that offline to online connection. We can bridge that gap between the POS and the consumer directly. That is one challenge. The technology challenge. But the second challenge is also quite considerable, in terms of the mindset. Now that you have the technology and the innovation to now connect these stores or outlets with the consumers. I guess there are sometimes there is that fear, in terms of being able to now have that real time connection between the outlets and the malls and the consumers. I think that tenants need to understand that. The malls should also be able to properly get the tenants to participate in something that is mall driven. Just like the Rockwell example, they have to talk to all their tenants and tell them they wanted to run the raffle now in a different fashion. Where it is more digital and it is more interactive with customers through the Rockwell app, using the existing store receipts. So malls, I think, will now be faced with tenants who may, are quite traditional. And they need to do that additional step of explaining how it exactly works, how it would benefit everyone. So there isn’t that fear of innovation and of this digital execution that is quite new to them. But still remaining quite traditional in the sense of making it work. There isn’t any fancy or complexity to it. It’s really just plug and play. And it works immediately. I think with the Rockwell project, it has proven itself, in terms of its compatibility. Just in making it as simple as plug and play and working right away. I think that really helped us move quickly to execute the whole raffle and digitise it instantly.

IMRAN: I think that was a very good summary in terms of its spirit. You were sharing that your ethos is to connect legacy malls, legacy retailers and their systems with fast moving consumers. And I think on our side, with Aimazing, we are always thinking around, how do we give shopping malls the ability of e-commerce decision making and data. I think that kind of very very sweetly explains why there is such a great synergy we can because it’s two sides of the same coin. There is one other interesting case study that we would love to discuss with you. It is one of the largest pharmaceutical brands in the Philippines that we are working together with as well. For this campaign, a consumer buys a certain product from a pharmacy. And they claim a free burger. And this is completely seamless as well. Sounds simple enough on paper, could you share a bit more about this campaign? What is so special about it?

Chris: Right, it is so ironic that it is so simple, but there is a lot of complexity that goes on behind it. Just like the Rockwell project, this new project that we have here with the largest pharmaceutical company in the Philippines, is basically automating and digisting the whole thing. Again, because the pandemic and because it is so hard to also find good work or help with the uprise in employment and not being able to hire a lot of people or people also being let go quite frequently during the pandemic. So automation is something that has helped retailers. So for this pharma company, they wanted us to embark on a project to sort of automate their promotional campaigns, which traditionally has always been done manually through, again, a booth. What we call, traditiaonlly, a redemption booth. So customers who have their purchase receipts would either take a picture or present to a person who’s been in the customer service booth, and they get their reward from that, usually an umbrella or free milk or something like that. So that’s the traditional way of doing it, and you can imagine how these redemption staff have to memorise a ton of different mechanics from multiple schemes or multiple promotional campaigns from the supermarket or the drug stores, for example. So this pharma company worked with some drug stores. They wanted their products to be rewarded on the receipt, so when you do buy any of their participating products from the promotional campaigns, customers can immediately see them reflected on the receipt. And they can use that to claim at partner stores outside of the drug store, or outside of that retailer, to claim that free burger that you were mentioning. It was always quite convenient because there was always one of these burger shops near the retailer, because we worked with one of the largest chain here in the Philippines. So that allowed a really automated way, where customers could immediately buy and get rewarded instantaneously, without that added layer of having to do another face to face and wait in line again at the customer service just to claim something. This way, they can leave immediately after the store, and claim it at their own convenience in a store nearby.

IMRAN: And this is without any human interaction, right?

Chris: Yes, yes.

IMRAN: Just the additional point I wanted to add here is that we talked a lot about the human time involved in those redemptions. But we haven’t even mentioned things like the incidences of fraud, of the incidences of human error, and then all the rectification that needs to be done on the back when the customer realises that I have been invalidated unfairly. And then they write in to the customer service and then they complain. A lot of extra hours even beyond those redemption as a result of the human intervention being less than a 99.99% data accuracy from an automation service. I think this is very interesting to mention.

Chris: To add also, in this particular project, data was extremely important to them. They wanted to react immediately because we enabled several retailers and drug stores. And these retailers, there were more than 10 that had different POS systems or store systemes, which wasn’t really a problem since Aimazing sort of normalises in order to make it unified, a unified execution. Data was really important, because they could quickly reac to any store that seemed to have a low turnout, or a low redemption from the campaign. And be able to react to that, and provide let’s say, extra promotional material or a social post just to boost that particular store’s performance on that campaign. For example, one thing they also benefited aside from that being reflected on the system, is also being able to move around the premiums, or the rewards for the customers. So if they did see a high take up in another store, they would move the rewards or the premium items from the non performing stores to the high performing stores, so that it doesn’t run out. So that’s something they can’t do if it was the traditional, physical inventory. One thing we implored here is that we weren’t stacking up free umbrellas in the store. We also digitised the rewards that we were giving out to the customer. Given that the rewards were also digital, we were also able to manage it quite dynamically, without incurring logistical costs of the traditional rewards.

IMRAN: Yes, sounds like magic!

Chris: Pretty much.

Jun: If I remember correctly, the brand told us if currently they want to react to some campaign, they needed to take 3-4 months for the campaign.

Chris: That’s right.

Jun: But Chris mentioned right, they can react in real time.

Chris: Yes, yes. And they can load up on several campaigns all at the same time, unlike in the past. When they were doing it through the manpower route, you can only memorise so much. You can only memorise a few products and a few scheme. But this brand had several schemes, more than 10, that they wanted to run at the same time, with different types of mechanics. Like buy 10 get something free, or buy 20 or get this free, or buy a combination of this one and that one and get something for free. A normal human can only go so much, in terms of knowing which ones. This really helped out.

IMRAN: So on this point, it is only possible once you completely automate this process. You are able to have a system that is unified and you can scale it up. Then you can stack it up, stack up all those campaigns together. Not even previously, currently with any brand and retailer right now, it is pretty much impossible, because of the human limitation.

Chris: You can pretty much imagine the relief the store staff have, that it is all automated now. Customers love it as well, because it is something that they know they will always get, and it’s not up to someone who may probably didn’t remember to give it to them. It’s always there. Stores love it, as far as data and the whole automated of it. They are just surprised when they see that the prizes on the receipt, and customers are delighted in seeing it. They simply also ride them that. It is also the experience of the store staff and the customer that share together. It is quite a delightful experience because it is new and something simple. It doesn’t also ask too much of the customer, to download an app or do something extra. They simply present the receipt to the near retailer and they claim their reward.

Jun: Very interesting. We always talk about different parties, we have the guests from malls, we have the guests from retailers. Today we bring another one, the FMCG, fast moving goods. Very interesting. Because a lot of outlets, inside their stores, they are selling all these FMCG brands. This podcast is the same. We are trying to create the entire ecosystem, try to bring different parties and come in to achieve the win win win. I think very interesting to not only serve malls, not only benefit the mall. It actually the consumer, I would put the consumer, the shopper, in the center. But we were discussing about this can benefit the brands, they can track their marketing in real time. What is the benefit for the retailers and the consumers, again because we can see the benefit for the brands, but what would be the benefit for the retailer to adopt this, what would be the benefit for the consumer?

Chris: Especially in this time, because of the pandemic. It is really pushing and adding pressure to all the retailers to come up with always new innovations. Which would help them get out of whatever burden they had during the pandemic. It is not just the retailer, but all these different other companies who are also. I mean the FMCG companies that you mentioned, who are also asking retailers to look into it. Because their products are in the stores. And retailers have to show these FMCG companies that they are also doing something to help with adding additional revenue through those channels. I think that these retailers, they have to really show their vendors that these innovations like Aimazing really helps offload the number of, not just promotions, but the number of activities the staff within the store or the retailers are undergoing extreme pressure with all these different things. I mean just from sanitising the stores alone, to having to take care of all these different maintenance that were brought about by the pandemic. Now they also have to memorise, or they need to know the different marketing mechanics. So it is quite helpful if we can come in and sort of take that off their hands, or off their load, in terms of automating it at the tail. So that it is self service by the customer, when they make a purchase. And there’s no more store involvement. And of course the important part there, the data, and being able to scale up to a lot more than just a few that the store can actually execute on.

IMRAN: Yeah, so it is completely taking away this reliance on human capacity.

Chris: Right, I think that people, of course, need to attend to people more urgent tasks, more sanitation. But leave all these mechanical promotion, mechanics to the automated systems to do. In that regard, it is helping sales, because there is incentives for the customer. But again, don’t tax the customer, and don’t tax your staff to be able to cope with all these FMCGs who are demanding to be able to create this type of promotions to help sales. I think it’s a really perfect opportunity to go in and assist them with it, through our solutions.

IMRAN: I think it would be such a very interesting future to have concurrent live events, live daily sales campaigns. And you can see in really at scale. Multiple payment companies, multiple e-wallets, multiple FMCGS, multiple retailers. All within a mall or ecosystem, running a campaign at scale. Really enabled by something like this, without the cap or ceiling of human capacity.

Chris: Exactly, that’s right.

IMRAN: Sorry Jun, back to you.

Jun: I think this reminds me of, if brands can use this to get better ROI, and they can put more budget into the retailer. And the retailer can use this to attract more shoppers. And the shopper can get what they want from the promotion. I think it will be an entire very good circle, and a healthy circle. Because they brand, Chris mentioned about the data, they can use the data, they can react more faster. And because they can react more faster, they can put more budget on the retail side. And the retailer will feel more happy, because they can differentiate with other people, from other retailers. And then the shopper is also very happy. Because I go to this retailer, and I can get a special gift. That would be a very interesting, and a healthy ecosystem, healthy cycle.

I: So I think it’s time for the closing questions. Chris, if you have one mall manager in front of you, and one retail manager in front of you. What would be your one piece of advice to each of them, that would be different to each of them.

Chris: Well, I think that they need to know the customers. Number one. That is who they are trying to convince and engage in. They should be looking at the target market, the profile of that target market that they want to interact with. And they should be looking for a good match, a good match in terms of the right channel to interact with them. Here in the Philippines we have a wide variety of markets. We usually use letters like market A, B, C and D, being the more affluent, market A and B. You need to know what channel to properly engage them on. And of course, for the lower end markets, you need to know which technologies to use. Because there isn’t much technologies they are accustomed to. So being able to have that wide range of innovation and non-innovation, I guess. Maybe innovating with traditional methods, and innovating with more newer technologies. You need to have that at your disposal. So that you can match it with the right market that you are trying to target. So whether your customer has the ability to go from offline to online. Or if you have your target market use offline to offline. So that pharma project that we did, was offline to offline. We didn’t ask the customer to download an app, we didn’t ask them to go to Facebook or anything like that. That worked out really great, because it matched that profile. So that’s one thing I would tell the retailers and the FMCG brands. Know that market, know what works for them, and don’t be limited just because everyone is creating an app, doesn’t mean that’s your only choice. I think it’s more about awareness and knowing it. And that’s the reason why we are on this podcast, because people can be more aware, that you are not stuck with just those types of engagements. We can actually do these types of things on your existing systems and your existing materials that you use everyday with your customers. But of course, connecting it in a different way, with a twist. They also need to look at the right reward and incentive. Learning from those projects, we do know where to engage them, so the touchpoint was the receipt. And the next part was what would they want to get out of it. So we needed to make sure that, from the portfolio we have locally, because we also have, not just enabling merchants with their receipts. But also enabling merchants with digital coupons and digital vouchers. So that’s something we also have as one of our offerings. We call it the electronic certificate, or e-gifts. So matching the right reward for the right audience really works. Because that sort of incentives them, and we make it easy because it is digital for them to claim it also with convenience. At the end of the day, I think those two things. The right touchpoints and the right rewards would definitely lead to a successful promotional campaign.

Jun: I see, and our last question. Do you think physical retail can remain king?

Chris: I think the physical retailer will always remain king. I think that what digital brings to the table, is just additional information. People go online to research, to know more about the product. But how do you replace touching a product, how do you replace the smelling of the product. I don’t think VR or any of those technologies would be able to replace it. It is just like my analogies with my son, and him attending online distance learning. All of us still want our kids to go back to school because there is just so much they are missing out on. And its the same with retail experience. There is so much senses that the human body needs to experience in terms of delight, and the experience of shopping that you may never ever get that is just online. For the basics, you can go online for. But for the added experience that you can never capture through the screen of a phone. I think that is where, of course traditional retail will always have it all.

Jun: I couldn’t say that better. I wish we could carry on, I think we could carry on for a long time if we wanted to. But that’s all the time we have today, it flew past! Chris thanks for joining us on the show.

Chris: Thanks for having me.

IMRAN: And for the viewers if you have any questions, especially regardings the Philippines market, or if you are thinking about under the hood systems of automation that Chris was talking about for your retail brand, for your FMCG, for the malls in the Philippines or even in the region. Please submit your questions to ask on your socials, we will obviously pass it forward to Chris to discuss this or answer your questions as well. And with that, stay tuned to next episode. Thank you! See you soon!

Jun: Thank you!

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