In 1985, Henry Sy Sr. opened his fist mall in SM North Edsa amid turbulent political and economic circumstances. Three decades later, SM has grown to become a successful retail monolith with 54 malls across the country and five in China. It is counted among the world’s largest and most profitable commercial center operators, the Asian equivalent of America’s Simon Property Group and Europe’s Klepierre Group.
 
SM’s well curated retail and entertainment centers have replaced public parks, providing decent spaces where the public can shop, dine and recreate. To a large degree, SM’s success has been borne out of government’s inability to provide public spaces where the citizenry and can converge and interact. It is a niche that SM filled across the archipelago with each mall offering more amenities and more attractions than the one before it.
 
For the first time since its founding, SM Supermalls (as the business unit is referred to today) held its first partners summit a few weeks ago. The summit brought together the who’s who in the local retail scene the SMX in the bay area. I was fortunate to be invited, even if I am just a small player in the industry. Hosted by SM Prime Holdings President, Hans Sy, the summit sought to lead retailers to adapt to the digital age. The event was cleverly themed under the moniker “Brick Click,” signifying the convergence of brick and mortar businesses and the digital space. Leading the discussion were management guru Francis Kong, Disney Institute’s Wing Tan and Samsung’s Global Marketing Head, David Kang.
 
I had no idea what the summit was all about before attending. As the rationale of “Brick Click” was explained, it all began to make sense and I was glad I came. Brick Click sought to educate retailers like me on the importance of digital marketing and how to use social media to drive customers to our stores.It taught us how to remain relevant in a marketplace that’s increasingly becoming “virtual.” My take home value from the event was phenomenal.
 
RELEVANT INSIGHTS ON DIGITAL MARKETING
One of my biggest a-ha moments was finding out that 83 percent of all consumers today rely on feedback from the Internet before deciding to make a purchase. This holds true not only for durable goods like cars and appliances but also for daily consumables like grocery items, garments, hotels and restaurants. This realization gives new importance to such websites as Trip Advisor, Zomato.com and Hardwarezone.com. Even bloggers of repute have become more important to brand building than they ever were before. Studies further reveal that it takes at least four positive feedbacks to convince a potential customer that a product or service is indeed worth the purchase.
 
As of 2013, the use of mobile smartphones has overtaken laptop and desktop computers as a way to surf the net in the Philippines. To many of us, smartphones have become the fifth appendage of our bodies. This means, information on products and services are now within immediate reach of every consumer at any given point in time. For retailers, not having a footprint on the digital sphere is akin to not existing at all.
 
All these suggests that brand management in the digital space is now just as important as traditional advertising and public relations. This is goodnews for small and medium sized retailers as the Internet has leveled the playing field between large corporations and fledging ones. These days, the upstart retailer can have just as much brand recall with a strong presence on facebook, instagram and twitter as mammoth corporations do with their multiple ad placements on TV and print media. This is especially true for products that cater to the upscale market and the youth.
 
An excellent case in point is the success of VMV Hypoallergenics, a medium-sized company that has tremendous presence on social media. Sales of its anchor product, Armada Sun Protector, are more-than-respectable in comparison to say, Coppertone, who spends hundreds of millions on TV, print and billboard advertising. I am quite certain that if one computes the ratio of sales to ad spend, Armada would beat Coppertone, hands down.
 
THE DIGITAL YOUTH
The internet has also given rise to new market characteristics, especially among the millennial generation or those under 25 years old.Whereas in decades past, those under 25 can simply be profiled by gender, income and geographic location, – they are far more complex and difficult to profile in todays digital world.
 
Remember, this is the generation that is highly informed given their savvy in extracting information from the net. They can form their own opinions, no longer needing prompts and validations from their elders to do so. More importantly, this is the age group that expresses their every thought and emotion over social media. The millennial of today comprise 54 percent of our population and are more informed than the generation before them. More significantly, they are the greatest influencers of consumer trends. Not to recognize their importance can spell disaster for a fledgling brand.Conversely, to hit their sweet spot can spell success.
 
Spotify is a supreme example of a brand that speak to the millennial generation. From humble beginnings, it has risen to become household names on the digital space. On the flip-side, brand like Odyssey Records have been left on the wayside due to their inability to electronically connect with the youth.
 
FLAT AGERS
Senior citizens, too, have been affected by the digital revolution. Consumer analysts have identified a new market segment called the “Flat Agers.” These are people from 55 to 70 years old who refuse to step into the senior citizen’s way of life. Not withstanding their age, Flat Agers remain productive and on top of their game. They are the moneyed segment, who, instead of wearing loose trousers and sweaters, sport the latest fashions from Loewe and Cortefiel. They reject bingo joints and ballroom dancing halls in favor of the hottest clubs and restaurants in town. Poster children of Flat Agers are the likes of Robert de Niro and Meryl Streep. Their local equivalents can be Edu Manzano, former Press Secretary Mike Toledo and even Sen. Loren Legarda. They, too, are very much wired via social media.
 
This segment represents tremendous opportunities for retailers who traditionally discounted them as non-core markets.
 
Despite the rise of the virtual market place and e-commerce, the summit’s speakers all agree that there will always be a place for restaurants, retail shops and service-oriented establishments like mine. While consumers today obtain the majority of their product information through the net, they still prefer to physically visit the store to purchase them. After all, e-commerce can never replace the emotional connection forged between the sales person and a customer, the excitement of physically handling a product, nor can it mimic the experience of dining in a fine restaurant. In this sense, brick and mortar retail stores are here to stay. However, what separates those bound for success and those doomed for failure is how they use the digital space to create a stronger brand, induce trial usage and generate repeat business.
 
For brick and mortar retailers, the name of the game these days is using the internet to create customers that in turn, generate more customers through social media buzz.
 
SM is on top of its game precisely because it evolves with the times, disrupts the status quo and pushes the boundaries. The digital space is SM’s next arena of battle and from the looks of it, it is preparing a strong offensive in this sphere. I reckon it will continue to stay relevant because of this.   I appreciate the fact that it is taking its strategic partners along with it for the ride.
 
Andrew is an economist, political analyst and businessman. He is a 20-year veteran in the hospitality and tourism industry. For comments and reactions, e-mail [email protected]. More of his business updates are available via his Facebook page (Andrew J. Masigan). Follow Andrew on Twitter @aj_masigan.