by Jan Michael Carpo, Reporter
In an era where technology continuously transforms industries, SM, one of the Philippines’ foremost retail giants, is embracing artificial intelligence (AI) to revolutionize the shopping experience for Filipinos and empower micro, small, and medium enterprises (MSMEs).
Giant retail group preparing strategic embrace of AI
With over six decades of retail experience, the company is poised to leverage AI not only to enhance customer service but also to support small businesses that form the backbone of the economy.
Hans Sy, the head of the SM Prime Executive Committee, is a strong advocate for AI who views it as a vital tool for advancing SM’s business model. According to him, AI technology has the potential to significantly improve various aspects of retail, from customer service to inventory management.
Sy also believes that understanding customers better is crucial, and AI offers the best means to achieve this. “Knowing your consumer is the finest use of AI,” Sy emphasized, envisioning a future where malls recognize customers upon entry and offer personalized shopping experiences.
This vision extends beyond customer interactions. SM’s foray into AI includes applications like predictive analytics, customer behaviour modelling, automated inventory management, and AI-powered chatbots.
These technologies aim to optimize operations, reduce costs, and enhance customer satisfaction, thus providing a blueprint for MSMEs to follow.
Empowering MSMEs: A Core Focus at SM
MSMEs currently account for 99.5% of all businesses in the Philippines and provide more than 60% of total employment. However, these enterprises often struggle with adopting new technologies due to limited resources and technical know-how.
Based on the latest study conducted by the BSP together with the “Better Than Cash Alliance,” digital payments now make up 54% of all retail payment volume. Merchant payments, on the other hand, still account for about 58 per cent.
According to the alliance, despite some important advances in electronic payment systems in the past two decades, the Philippines remains a heavily paper-dependent (cash and check) society.
Recognizing these challenges, SM has committed to bridging the gap.
The company leverages its vast network and resources to provide MSMEs with affordable, easy-to-use AI-driven tools and platforms.
One of the standout initiatives is the launch of an AI-powered marketplace platform. This platform helps MSMEs expand their reach by offering data-driven insights into consumer preferences, optimizing product listings, and automating marketing efforts. Such initiatives enable small businesses to compete on a level playing field with larger corporations.
The SM Mall of Asia in Pasay City, the second largest in the Philippines and ranked 8th biggest in the world
SM’s commitment to AI is not merely theoretical. The company is actively rolling out practical applications that demonstrate the transformative potential of these technologies.
For instance, SM’s AI-powered inventory management system uses predictive analytics to forecast demand, aiding MSMEs in managing stock levels efficiently and reducing wastage — a critical advantage for businesses dealing with perishable goods.
AI in Action: Real-World Applications
Another innovative use of AI is in personalized marketing. SM is piloting an AI-driven marketing tool that analyzes customer data to create targeted campaigns, thereby helping MSMEs tailor their marketing messages to specific customer segments.
This increases the likelihood of conversions and improves customer loyalty. Additionally, AI-powered chatbots are being explored to handle routine customer inquiries, freeing human resources for more complex tasks. This technology is especially beneficial for MSMEs with limited staff, enhancing customer service capabilities without significant additional costs.
As SM continues to develop and expand its AI initiatives, the company acknowledges the importance of collaboration. SM is working closely with technology providers, government agencies, and educational institutions to ensure that the benefits of AI are accessible to all, particularly MSMEs.
This collaborative approach is part of a broader vision to create a more inclusive and innovative business ecosystem in the Philippines.
Sy also reflected on the company’s resilience during the rise of online shopping, highlighting how SM adapted by enhancing in-store experiences and launching its online store. This adaptability is crucial as the company looks to the future. “I definitely believe in a bright future,” Sy remarked, emphasizing that AI and innovation are key to staying relevant and competitive.
In this new era of innovation, SM’s commitment to AI and MSMEs is a testament to the transformative power of technology. As MSMEs embrace new tools and capabilities, they stand to gain a competitive edge, expand their markets, and drive economic growth.
And with SM leading the way, the future looks bright and promising for small businesses across the Philippines.