SM Group Enhances Retail Strategy Amid E-Commerce Competition

In response to the intensifying competition from low-cost e-commerce platforms, the SM Group is strategically enhancing its retail operations by prioritizing product assortment, customer service, and convenience. Executives from SM Investments Corporation articulated this approach during the recent 32nd National Retail Conference and Expo, highlighting the need to adapt to evolving consumer expectations.

Teresita T. Sy-Coson, Vice-Chairperson of SM Investments, noted that consumers are increasingly looking for convenience, engaging experiences, sustainability, and authenticity, while remaining price-sensitive. She stated that consumers want all of these factors but do not want to pay very high prices. This sentiment reflects a broader trend where consumers have become accustomed to the variety and competitive pricing offered by online platforms, making it crucial for physical retailers to carve out their unique value propositions.

“They want all of them, but they don’t want to pay very high.”Teresita T. Sy-Coson, Vice-Chairperson, SM Investments Corporation

Sy-Coson described the group's online operations as just so-so, acknowledging the challenges posed by the wide range of inexpensive products available on digital platforms. Rather than attempting to compete directly with e-commerce on all fronts, she emphasized the importance of differentiating physical retail through superior customer service and shopping experiences. She explained that since they cannot compete with online platforms, they should focus on assortment, customer service, and convenience.

Steven T. Tan, President of SM Supermalls, echoed this sentiment, asserting that physical stores can offer experiences and personal interactions that online platforms cannot replicate. He emphasized the significance of well-trained sales associates who can provide personalized recommendations and understand customer needs. He remarked that the experience is really key here, underscoring the role of human interaction in enhancing customer satisfaction.

“The experience is really key here.”Steven T. Tan, President, SM Supermalls

As younger consumers increasingly turn to digital platforms for their shopping needs, Sy-Coson urged retailers to remain vigilant and responsive to changing consumer behaviors. She advised that retailers must know what is the latest and should listen to Gen Z and millennials, while also recognizing the importance of catering to older generations.

“AI, if used in the right area, will increase productivity.”Teresita T. Sy-Coson, Vice-Chairperson, SM Investments Corporation

Tan added that continuous learning and adaptation are essential for retailers in this rapidly evolving landscape. He noted that innovation is not a one-time, big-time thing, suggesting that retailers must consistently seek new ways to engage customers and improve their offerings.

Artificial intelligence (AI) is also emerging as a tool that can enhance retail productivity. Sy-Coson pointed out that while AI can help organize information and support creative work, it should not replace critical thinking. She mentioned that AI, if used in the right area, can increase productivity, but cautioned against over-reliance on technology. Tan similarly advised retailers to maintain control over AI applications, stating that they should not be slaves to AI but rather make AI their slave.