MANILA, Philippines – There were clothing racks, mannequins, and dressing rooms – just like what one would find in a typical clothing store. But there were no price tags, shopping bags, and cash registers.
While shoppers can see, touch, and try on clothes at the store, they cannot take them home immediately. Instead, they buy products at the store, and Zalora delivers them to their homes. They were asked to scan a QR code and download the Zalora application to their smartphones. Shoppers can also use the available tablets found inside the store or laptops at the check-out counters to sign-up or log-in to Zalora app and then place their orders.
Online retailer Zalora Philippines, which is owned by tech incubator Rocket Internet AG, opened its offline store today, June 17, at EDSA Shangri-La Mall in Mandaluyong City. This represents the retailer’s strategic omnichannel approach to reach more customers and encourage them to try online shopping.
Zalora Philippines will only stay in its EDSA Shangri-La space until September, at which point they may extend, close, or reopen elsewhere in the country only to stay there for a few months as well.
This kind of location is called a “pop-up” store. Zalora Group has already been trying the business model in other countries, like Singapore, earning positive results.
“We’re an online shop, utilizing an offline store,” Zalora Philippines Co-Founder and Chief Executive Officer (CEO) Paulo Campos said at the launch of its pop-up store. “This has been successful in Singapore.”
Zalora Group – which has become the Asia’s number one online fashion destination within 3 years of operations – saw its net profit last year increase by 70% to P6.34 billion ($140.4 million). The number of Zalora’s transactions almost doubled to 3.9 million last year from 2013’s two million.
“This is a way for Zalora to educate potential customers who may not yet be comfortable shopping online and grow our customer base. This business model works,” Campos said.
Its first pop-up store was located at the Glorietta Mall in Makati City. “Most customers there have never shopped with Zalora before,” he said.
The company is now keen to execute the same concept in other places outside Metro Manila, Campos said.
Future shopping paradigm
The Zalora pop-up store marks another milestone in the company’s young history.
“Since we started operations in 2012, we’ve continued to look for innovative ways to grow e-commerce in the Philippines, and through this initiative, we hope to widen our customer reach, educate them on the benefits of online shopping, and dress them in the latest fashion trends in the quickest way possible,” Campos said.
Campos said his company sees a future where offline and online shopping are not two separate business schemes.
Zalora Philippines, according to Campos, will be well poised by having an online presence with offline locations to satisfy the needs an online experience cannot provide.
“When it comes to online shopping, we understand that customers have some hesitation, especially since they cannot physically touch or try the products they see in our website. With the Zalora pop-up store, we are now bringing our products closer to our customers while still keeping the convenience of online shopping,” Campos said.
Partners with Globe Telecom
Zalora Philippines partnered with Globe Telecom, Incorporated to give its customers access to its online shopping portal on mobile devices.
Through this partnership, Globe postpaid customers can access Zalora and other e-commerce websites.
“Making the country as the digital lifestyle capital of the world, we are excited to collaborate with Zalora to further grow the e-commerce industry in the country with a game-changing offer,” Globe President and CEO Ernest Cu told reporters.
It is too early to know if Zalora’s vision of the future of shopping will be realized. “This is an experiment, but it appears to be heading in the right direction,” Campos said.
Although Zalora sees a big market here in the Philippines, its managing director Constantin Robertz said that “lack of high-speed Internet and poor logistics infrastructure make the country’s e-commerce market challenging to reach.” – Rappler.com
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