Why Businesses Are Shifting to A Digital Platform

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Challenges Faced by Brick-And-Mortar Businesses 

  1. Online vs. Brick-and-Mortar  

Online sellers have significantly increased over the past decade. More so now during a global pandemic when it brick and mortar businesses are being forced to close due to lockdown. Leading to limitations and more debt due to inability to pay rent and staff.  Online sellers with substantial discounts, a vast selection of items, and no sales tax have earned themselves a sizable market position. While the challenges that brick-and-mortar stores face are large, they are not insurmountable. Online platforms have given the customers an opportunity to browse through products and transaction securely and conveniently through their phone. 

  1. Labor and Other Goods Costs 

The cost of commodities is influenced by political and global economic dynamics. Inflation or trade conflicts may drive up the cost of foreign electronics or parts. Climate change may increase the cost of produce. Automation or labor market adjustments may reduce the cost of other raw materials. To keep up with the continual swings in expenses, retailers must be agile. Inflation in the employee market is a concern for retailers, since shifting economic realities in many regions of the world have driven up base pay. Along with the fluctuating cost of products, merchants must also contend with the fluctuating cost of labor, which may be tough to afford and move quickly, leaving employers scrambling. 

In the digital era, brick-and-mortar retail has some unique issues, and more are expected to emerge as the situation evolves. Retailers who wish to prosper should think about merging internet selling with a physical location. 

Physical sites with skilled people may serve as showrooms or experiential connectors, allowing customers to develop a stronger bond with a company. This connection may then be played out online or in-store, allowing the business to profit from both channels. 

The Rise of E-Commerce in the Philippines 

In the aftermath of the Covid-19 pandemic, the Philippines continues to rely on e-commerce and the digital economy to manage its macroeconomic stability. In the midst of the pandemic, the Philippines' e-commerce sector has seen a spike as brick-and-mortar firms have been impacted by lockdown measures. As a result, the Philippines recognizes the importance of e-commerce and the digital economy as major drivers of economic growth and resurgence. 

As per the Philippine Department of Trade and Industry (DTI), e-commerce generated 3.4 percent of the country's GDP in 2020, or US$12 billion (PHP599 billion). The Philippines' objective is to boost e-commerce sales to US$17 billion (PHP850 billion) by 2021, or 4.3 percent of GDP, and to US$24 billion (PHP1.2 trillion) by 2022, or 5.5 percent of GDP. 

The DTI also plans to encourage the growth of e-commerce enterprises from 500,000 in 2020 to 750,000 in 2021 and one million by 2022. Last year, an economy assessment put the Philippines second after Indonesia in terms of e-commerce usage. The economic system of the Philippines is regarded to be consumer driven. 

The Philippines E-Commerce Roadmap 2022 was introduced earlier this year by the government in order to enhance the e-commerce business. The purpose is to develop an e-commerce ecosystem that drives industry development and employment generation. 

Consumer Behavior 

According to Facebook's Emerging Trends Research, advertisers who were able to shift digitally during the health crisis made money, and consumers are more inclined to continue to shop online for convenience. According to the survey, 87% would be willing to pay extra for easier access to items or services. In 2020, 12,500 people were researched in 14 nations, including the Philippines, for changes in consumer behavior. When determining what to buy, 93 percent of respondents from the Philippines indicated convenience and price are important factors. 

Want to start your own e-commerce store and drive up the sales of your business? Book a free consultation with us to learn more!

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