MANILA, PHILIPPINES — In the age where digital shopping carts have seemingly taken over, Filipino shoppers are finding their way back to physical retail stores. But with in- store shopping back on the table, digital shopping habits developed during the pandemic still persist due to significant factors such as price, discounts, and convenience.
The tech-enabled market research firm, Agile Data Solutions, has recently conducted a nationwide study through its Hustle PH mobile app aimed at providing directional scenarios and insights into lasting Filipino consumer behavior trends.
Online Shopping Habits
Price is the first thing Filipino shoppers check online, with many using digital platforms as a virtual price catalog to canvass and compare deals from different stores. This newfound ability to easily browse multiple retailers without being geographically bounded or dealing with notoriously bad traffic conditions has become particularly important for highly price-sensitive consumers.
It revealed that 92% of surveyed adults were able to save money by purchasing essential items online. The study also found that Filipinos prefer online shopping platforms like Shopee and Lazada, with 76% of respondents taking advantage of sales and vouchers and 34% utilizing free shipping promos to save money.
The study further revealed that a significant proportion of consumers engage in bulk buying of familiar, fast-moving consumer goods (FMCGs) and commodities, such as diapers, tissue rolls, and other household essentials. These products, which are already well-known to customers, tend to receive the most attention online and drive higher basket purchases when coupled with great bulk deals. Of those surveyed, 50% practice bulk buying, with 28% citing attractive discount prices as the primary motivation, while 26% highlighted the need to stock up on essential products as a crucial factor. Furthermore, 16% of respondents noted the time-saving convenience of fewer trips to physical stores as an advantage.
This trend raises the question of whether brick-and-mortar stores may see a shift towards smaller purchases of FMCGs and commodities as consumers increasingly turn to online platforms for bulk buying these familiar products to maximize savings and convenience.
The boom of online shopping platforms and the emergence of “revenge spending” after long series of lockdowns have also fueled 45% of shoppers to buy items they like on the spot. While 83% compare prices on different online shopping platforms before making an impulse purchase, 91% said they plan and set a budget for their online purchases, and 89% said they have a savings goal they want to achieve before they purchase online.
Despite the increasing appeal of online shopping, 28% of Filipino shoppers have voiced their biggest concern about the authenticity and quality of products they receive. As a result, shoppers increasingly rely on product reviews to guide their purchasing decisions, seeking reassurance before taking the plunge. Other prominent concerns include the safety of packaging and the duration of delivery time, with 17% and 15% of respondents ranking them as their second and third most important issues, respectively.
Additionally, 71% of surveyed shoppers prefer cash on delivery (COD) as their top payment method, not because they lack knowledge of tech integrations but because they lack trust in the product delivered – if it is delivered at all. The gap between COD users and those opting for payment centers/e-wallets (14%) or in-app wallets such as ShopeePay (6.5%) and Lazada wallet (6%) highlights the importance of addressing consumer trust in the online shopping experience.
Data also shows that there is a difference in average spending among these groups: users who prefer COD have an average spend of 200-500 pesos, while those who prefer Lazada Wallet have an average spend of fewer than 500 pesos. Users who prefer other payment options, especially ShopeePay, have an average spend of above 500 pesos. This suggests that customers who use alternative payment methods, like ShopeePay, may feel more confident in the purchasing process and are willing to spend more on their purchases as long as trust is nurtured.
In-person Shopping Habits
Although the study reveals that consumers prefer to buy familiar commodities online, 77% of them still prefer a hands-on approach when it comes to discovering and evaluating unknown products. Consequently, this trend suggests that the sensory appeal and visceral experience of on-site shopping are far from being outdone by the convenience of online shopping, and brick-and-mortar stores may increasingly serve as venues for product launches and trials.
About 33% of the respondents believe online shopping can only serve as an alternative to in-store purchases rather than a complete replacement. This sentiment is further supported as 45% of those surveyed stated they had made a purchase in a physical store less than a week ago, while 54% reported having ordered something online during the same timeframe. The close percentages indicate a strong inclination among consumers to maintain a balance between in-store and online shopping experiences.
Furthermore, the study results highlight several key factors that contribute to the continued appeal of traditional in-store shopping.
For 32% of respondents, the instant gratification of receiving goods upon purchase gives brick-and-mortar stores an edge over their online counterparts, even when considering the time and energy required to visit a physical location. Almost half of the participants (49%) appreciate the sense of certainty and accessibility that comes with knowing they have a physical store to visit in case a purchased product malfunctions or has defects.
Lastly, 41% of those surveyed believe that on-site purchases still outshine online shopping when it comes to after-sale services.
This indicates that consumers value face-to-face interactions often associated with brick-and-mortar stores, suggesting that these aspects of the shopping experience should not be overlooked. “It is not a battle between online vs. brick-and-mortar stores. On the contrary, our market data shows that these two channels are evolving into a symbiotic relationship,” said Jason Gaguan, Agile Data Solution Founder. “The lockdowns during the pandemic have indeed jumpstarted the e-commerce revolution, but as we transition to a more open “new normal”, we see consumers becoming omnichannel shoppers. Consumers take in the best of both worlds: the ease of deal hunting in e-commerce and the rewarding experience and efficiency of physical shopping.”
He further explained how product mix between channels is evolving. He said, “Commodities and popular products which are familiar to consumers are being deal hunted online while more expensive products are merely searched online for ‘research purposes’ with the final purchases still concluded in physical stores. E-commerce channels then serve as online catalogs of physical stores for higher-priced products. This evolving symbiosis is a market movement we continue to track, and we are very excited to see where this all goes.”
The market study by Agile Data Solutions provides physical and online retailers an in-depth understanding of the primary and secondary market drivers of consumers today, as well as a comprehensive outlook of the current market situation and its future projections. Through the Hustle PH app, the firm harnesses the power of crowdsourcing data. This innovative approach supports its mission of democratizing market intelligence providing a reliable stream of insights that attract businesses of all sizes, from Fortune 500 giants to MSMEs and start-ups.