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Retailers strive to create own ecosystems

Companies adopt own digital payment tools and omnichannel marketing to retain singles, double-income families

Shinsegae`s SSG Pay
Shinsegae`s SSG Pay
Retailers are embracing digital platforms and new delivery systems to attract new customers while retaining the existing ones.



Digital payment tool



The market frontrunner is Shinsegae Group, which has Shinsegae Department Store, discount supermarket E-Mart, high-end grocery store SSG, online shopping mall SSG.com, Shinsegae Food restaurants and several others under its belt.

The company launched SSG Pay, an app-based payment tool that can be used at all its affiliates, in August. SSG Pay also enables you to collect bonus points and coupons, and issue receipts by scanning a barcode.

Shinsegae is the first “offline” retailer to have created its own payment system. Those already out there -- Kakao Pay by Daum Kakao, Samsung Pay by Samsung, ISP by KB, Syrup by SK, Smile Pay by eBay Korea and others -- are for online shopping or made by software manufacturers.

With 21 million Shinsegae point members expected to use the platform, the company expects the system to gain momentum soon. The company is planning to expand its membership to gas stations, leisure facilities, cinemas, transportations companies.

“We have simplified the payment process by merging information technology, reducing queuing time at the cashiers’ desks and providing a convenient shopping environment for our customers,” Shinsegae I&C head Kim Jang-wook explained.

The nation’s largest retailer, Lotte, is also reportedly developing its own payment tool, LPay.



Omnichannel marketing



Omnichannel retailing -- the integration of brick-and-mortar stores and the digital world -- is the hottest new industry trend. 
Lotte Mart's Drive-Thru
Lotte Mart's Drive-Thru

At the Lotte Marketing Forum on Aug. 31, group chairman Shin Dong-bin demonstrated buying a purse from Lotte.com’s online shopping mall for collection at a nearby Lotte retail outlet, rather than delivering it straight to his home. This is designed to preserve the feeling of touching and feeling before purchasing, but reduce the time and effort of offline shopping, he said.

‘In order to cope with the ever-changing complicated retail environment, we need to think of new methods to bring customers together under our umbrella,” Shin said.

Lotte Mart, the group’s supermarket chain, has taken the service a step further and launched the Drive & Pick service at its Junggye branch earlier this month, which allows customers to pick up goods they purchased via an online shopping mall at a drive-thru section of Lotte Mart.

“You can check the freshness of the groceries and can make last minute changes by actually looking at the goods. But at the same time the crew loads the goods for you so you don’t have to get out of the car if you don’t feel like it,” a Lotte Mart spokesman stated.

Shinsegae is also doing a trial service at several branches, where online shoppers at SSG.com can pick up the items at the designated branches, even on the same day.

Convenience store franchise CU has signed a pact with Mesh Korea’s delivery application, “Butakhae,” which provides delivery services for purchased items via CU application that are worth more than 10,000 won within 40 minutes of an order.

“This is a convergence of delivery system and IT solution providing instant service,” the company stated.



Secure single, double-income customers



The biggest reason for the change is to retain customers in each retailer’s own ecosystem.

“You can go shopping, then pay and pickup within the brand. This is about more than making it convenient for customers,” Kim at Shinsegae said.

But another powerful reason is that people genuinely lack time for offline shopping and are moving fast to online.

According to DMC Media’s report, about 72 percent of mobile phone users have used mobile payment tools and its global market will grow to 721 trillion won by 2017.

This is due to the fact that double income families account for 43.8 percent of the families with married couples. The single-member family, which doesn’t have someone to go shopping, or wait at home for the delivery to arrive, are on the rise, taking up 26 percent of the entire households in the country.

“In the future, the trend will evolve into customers’ picking up purchased items at a robot store even late at night. This will surely become the era of ‘hybrid shopping.’” a Lotte Department Store spokesman said.

By Bae Ji-sook (baejisook@heraldcorp.com)



 





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