Thought Leadership

3 Loyalty Marketing Lessons from the Philippine E-commerce Industry

Feb 18, 2019
How online retailers survived the Filipino mall culture, and what every brick-and-mortar store should learn from them.

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Online shopping is popular among Filipino consumers regardless of socioeconomic status. In a study done by VISA, 9 out of 10 Filipinos go online shopping at least once a month and spends an average  of 17.77 USD.

Traditional retail can’t just rest their laurels on a consumption-based economy with an ingrained mall culture. It's evident that Filipino buying behaviors are changing.

Brick-and-mortar stores can learn a lot from an industry that despite the challenges - low credit card penetration, mobile internet below global average - continues to thrive.

Pivot to your market’s needs

The main competitive advantage of E-commerce is convenience. From marketing to shopping to customer support, the main selling point is that it provides digital experiences that result to a unique yet efficient customer service. This naturally leads to cashless transactions so you can literally buy anything even at home in your pajamas and wait for it to arrive.

In the Philippines however, cash is still king. With only 8% of Filipino credit cardholders online retailers have to think of another way to serve their consumers. This lead to the rise of COD transactions as an alternative payment option. The Department of Trade and Industry (DTI), as part of its Philippine E-Commerce Roadmap, is building an improved COD gateway system to help local online retailers.

Local businesses should extend this mindset to their loyalty program regardless of whether they have an online shop or physical store. Instead of settling for a set-and-forget plastic loyalty card, automate your loyalty program by switching to a digital solution. By equipping your customer with a digital loyalty app, they can discover, redeem and track their rewards in one place. Bonus: you can track this in real-time and avoid manually extracting data from POS machines and tediously encoding them in Excel sheets.

Adapt to your consumers’ fluctuating demands

While there is a clear affinity for old school cash transactions, that doesn’t mean Filipinos aren’t willing to change. Cashless payments are steadily gaining traction among consumers. Lazada has partnered with GCASH to enable Filipinos to shop without a credit card or bank account and make cashless transactions.

A cashless ecosystem is perfect for the time-starved tech-savvy Filipino market. And true enough, Filipinos don't have problems adapting - 58% prefer shops that accept cashless payments, and 69% want to use cards or contactless payment technology over cash.

You can also apply automated transactions to your loyalty program. Allow your customers to use points as discounts via a digital loyalty app. This increases repeat purchases and promote customer retention. When you’re in one of the largest smartphone markets in the world, going cardless is common sense.

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