By Andres “Andoy” Montiel, Packworks’ Chief Data Officer
In recent weeks, “sari-sari” stores have already felt the dwindling delivery of stocks of beverages, particularly carbonated drinks, due to the supposed shortfall in the country’s sugar supply.
In fact, the country’s major bottling companies, Coca-Cola Beverage Philippines Inc., ARC Refreshments Corp., and Pepsi-Cola Products Philippines Inc. (PCPPI), issued a joint statement confirming that they are facing a shortage of premium refined sugar, a key ingredient in manufacturing their top products including carbonated drinks.
This is on top of concerns over the ongoing inflation and looming food crisis brought about by the Russia-Ukraine war, triggering large spikes in prices of wheat and other essential commodities such as oil and grains. This means the costs of noche buena and media noche products like cheese, all-purpose cream, spaghetti sauces, and sandwich spreads will increase as the holiday season approaches.
And now that mobility restrictions eased, many consumers, especially those situated in rural and suburban areas, still opt to buy from their neighborhood sari-sari stores rather than go to big supermarkets. However, with prices shooting up, how can sari-sari stores optimize their inventories and make sure they have commodities to offer to their customers? How can they avoid empty shelves in the run-up to “ber” months?
Sari-sari stores comprise the chunk of the country’s micro-retail industry, and some 170,000 traditional sari-sari stores today have already transitioned their operations from pen-and-paper to digital. They use a mobile app wherein they have access to pricing tools, inventory management, and working capital loans. This also allows sari-sari stores to work with manufacturers and brands in growing fast-moving consumer goods categories in their stores.
Each transaction made by geo-tagged sari-sari stores within the app is recorded as large data sets, also known as Big Data, and is used to provide deep insights for partner manufacturers and brands to help them identify customers, predict trends, forecast demand, and optimize pricing.
Knowing consumers’ buying behavior in the sari-sari store will also help companies plan which products to drive. Knowing how much people spend per sari-sari store visit and how often they buy a specific category can help manufacturers determine a product’s price and packaging.
By directly connecting them to the manufacturers and brands, sari-sari stores can access supplies for lower prices; thus, they can stock up on commodities that meet customers’ demands in a given circumstance. Besides, it’s always convenient if demands are readily available on their shelves for the consumers.
In case of calamities like a typhoon, ashfall, or flood, for instance, Packworks’ Sari IQ data shows that people buy more hygiene items and laundry detergent during this time. Companies may add a supply of these products or reintroduce slow-moving products in the same category so consumers will be familiar with the brand and help increase sales for sari-sari stores.
Circling back to the holiday season and the impending price increase on essential commodities, sari-sari stores can offer something unique to shift the demand of their customers. Some might have a special dish or home-baked goods. Regardless, the most resilient sari-sari stores always have something that sets them apart from other stores that just offer the usual goods.
In addition, the data from the app helps sari-sari stores decide which products to put upfront and how long to keep them there. Rather than loaded shelves of stock that far exceed demand during any given week, data helps sari-sari stores understand how much stock they’ll need each week and plan accordingly. It also allows them to explore the sales benefits of clustering related products on display.
Filipinos are known to celebrate the Christmas holiday starting in September. While some families already stock their supplies months ahead of December, many still prefer to go to the nearest sari-sari store for last-minute shopping. With or without crisis, this only means sari-sari stores remain relevant, holding the loyalty of communities and continuing to serve as the pantry extension of many Filipino households.
Supermarkets and big retailers have been leveraging big data analysis to interpret their customer demographic and transactional trends. As with all other industries disrupted by the pandemic, digital transformation is unavoidable for small sari-sari stores to future-proof their business, customer experience, and operational efficiency. We live in an exciting time where there’s a way now for sari-sari stores to reap the benefits of advanced analytical tools and opportunities to redefine or reinvent themselves, allowing them to rise out of the crisis stronger.
About the Author
Andoy is the Head of Data at Packworks. A seasoned executive in the field of first-mover innovation and customer-centric technology strategies, Andoy has led teams in the Philippines, Malaysia, and Hong Kong in delivering new revenue models and technological capabilities. From operationalizing the first hybrid cloud system in Globe to the monetization of the company’s vast unstructured data, the projects Andoy leads lay the groundwork for enterprise-wide development and adoption of customer-focused strategies around new learnings.
Packworks is a startup company that provides a business-to-business (B2B) platform that is easy to use, has low bandwidth, and light footprint that will allow sari-sari store owners to become more efficient in managing their business. Founded in 2018 and started as a solution for multinational companies in the Philippines to connect with neighborhood stores, the platform has now transformed into a way out of poverty for the millions of sari-sari store owners across the Philippines. Packworks empowers the sari-sari stores through scalable and accessible technology, with its team composed of dedicated developers, programmers, and technicians that work to put the power back into the hands of the people at the heart of Filipino communities by providing them digital opportunities previously only available to big companies. By bringing technology-based solutions to one million Filipino sari-sari stores, Packworks is driving toward a more progressive, connected, and inclusive Philippines.