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Kicker : COVER STORY(Commerce)

Trending-: Offline Business Channels

Thinking Out of the Box Is Necessary for Everyone

Do-Hyuk Kim, Reporter

ndapple0921@gmail.com

'Retail Store' In Our Minds Often Look Like This

  As we all know, the smartphone has changed our entire world dramatically. It helped people to stay online regardless of their location, encouraging them to communicate more and fetch necessities conveniently in a way no one could have possibly expected previously. Buying a new item to enrich or to show off your life never felt so easy, until the appearance of the smartphone. Before these little pocket-rockets dominated the solution of accessing the internet, there was something called ‘the computer.’ Online commerce was born at that time, and never hesitated to grow up its market share since it’s first appearance. Amazon raised the bar of online commerce provider in America decades ago by selling budget-friendly books that could be accessed via online. Then in Korea, a company called Coupang completely reshaped how online commerce worked by fully utilizing smartphone’s interface and a marketing strategy to match. Everyone now believes that online is a supreme channel for purchasing goods for their daily lives and those beliefs are sturdy, because it has been reinforced for years. But interestingly, a major shift in commerce has already swung into action.

  Not only did the development of the smartphone and improvement of cellular technology reinforced online commerce to be the segment you should care about, but COVID-19 did too. The virus that humanity had never seen before locked down our daily lives, then led everyone to step into the world of contactless everything. Contactless shopping also turned up, rising as the most crucial shopping channel companies to consider. In fact, every month of 2022 marked an increase of the volume of online shopping compared to 2021. Popular opinion says that other shopping channels already reached their peak in terms of growth, but online shopping – which includes mobile shopping – still possesses headroom to become much more influential. That made all retail companies dive and focus on online shopping, but some people are thinking differently.

Familiar Brands Are Constantly Innovating, Striving for Survival

  One of the most popular brands for purchasing clothes in Korea, ‘Musinsa’ recently opened an offline store that encourages customers to visit for taking a look at clothes they are going to buy and try them. Musinsa originally began as an online-only seller that spun all types of clothes, including underwear and sunglasses, and currently is the biggest shopping channel that the younger generation likes to visit. The offline store was a following act for launching their private clothing brand, ‘Musinsa Standard’, and they decided to open a place where people can experience the clothes. They knew that the biggest concern people got while shopping online is that they should confirm purchase without looking and touching the product they are going to buy. So, in the middle of the COVID-19 era when social distancing was ongoing, they launched their flagship store in the heart of Seoul, Hongdae.

  Foreign example brings up ‘Sephora’, which is a French company that sells cosmetic products. We are all familiar with drugstores such as ‘Olive Young’ that sell a variety of products including snacks and beauty related consumer goods. Sephora is one of them, but different in one significant point. Sephora built an offline store that does not sell any of their displayed products to customers. Those stores are only focused on experiencing their products and customers should go back home without any purchase. After people returned to their homes, they should order those products experienced via the online store Sephora has prepared. Sounds quite weird and intriguing, but Sephora’s out of the box plan succeeded. No other competitive drugstore brands marked growth during recent offline store’s downturn, but Sephora recorded growth due to this strategy. Enhancing customer satisfaction by giving a chance to customers to wear those cosmetic products and closely examining their looks worked to satisfy customers.

Luxury Brands Are Also Sensitive to Latest Vogue

  Not only do consumer-friendly cheap brands struggle to attract customers, but luxury brands too. Chanel is constantly enticing customers by opening pop-up stores. Current pop-up store ongoing is placed in Bukchon Hanok Village located in the center of Seoul. In Chanel’s latest pop-up store, you can experience Chanel’s perfume lineup. Because perfume conveys scent, it is hard for customers to fully perceive what the perfume conveys to the user. To eradicate this problem, Chanel brought up an offline pop-up store, but in a slightly different way. The way to access this pop-up store and go through programs that they have prepared is to buy a Chanel product. Then a private invitation follows, which encourages customers to make a visit. This unique proposition shows that the purpose of pop-up stores is not simply attracting every single people that are familiar to Chanel, but to lock in their already experienced customers to constantly buy Chanel’s other products. Luxury brand’s customers tend to spend their money much more willingly and have other options to move on to different luxury brands, and it looks like Chanel penetrated their consumption habits. Emphasizing their heritage and uncompromising qualities through offline stores is one of the marketing plans that shrunk while social distancing was ongoing, and Chanel quickly took the lead by proposing these pop-up stores every single year recently.

Different Tactics Always Accompany Dangers

  This altering plan to returning to offline stores is not unusual, but there are some significant risks that follow. The first issue is related to distribution of product. If a company sticks on online channels, the thing they only have to do is put all of their consumer goods in a single warehouse and contact delivery services to send them to customers. But opening up offline stores makes everything much more complicated, forcing companies to distribute sufficient amounts of each good at every single store. If the company sells products that are not influenced by the date going passed, that would be less problematic. Companies selling groceries or processed foods need to throw away foods that have already passed expiry date, and that is all included in costs that the company should undertake.

  Secondly, opening an online shopping mall is considerably cheaper than a genuine store offline. Incarnating an internet site and uploading products that are expected to sell requires way less people to be involved. All they need is a team to construct an internet site and maintain it to be hassle free for customers, but an actual shop requires more workers to bring products to the store and arranging, selling and cashier to process the entire product buying progress. Fewer people involved means a huge amount of cost saving, because when you calculate all the cost that have been spent for forming a business, labor is the most expensive one and eats up most portion in expense. Due to high expenses on providing wages for employees, some stores are bringing up robots and vending machines to avoid using people for providing services to customers. Purchasing machines might cost some money at the moment, but in the long-term, the amount that machines save is tremendous. There is a clear limitation too, where the quality of services provided by actual humans and robots differ dramatically. If the offline store is opened for improving customer satisfaction by delivering an outstanding customer experience, like the examples that this article has given previously, ensuring all those prices is essential.

  As we have found out, various brands worldwide are striving to improve their performance during hard times. Most people are still thinking about the pending trend that everyone talks about that focusing on online shopping channels is essential. That is true, but to become ahead of the curve requires more blue-sky thoughts. Returning to opening offline shops might be risky, but customers’ response is compensating those extra expenses. The world is changing faster than people are expecting, so I hope readers of this article practice to think outside the box. Sometimes, ostensible madness can change the world.

Sources: 

https://kosis.kr/covid/statistics_onlineshopping.do

https://www.gqkorea.co.kr/2022/12/16/%EC%83%A4%EB%84%AC%EC%9D%98-%ED%96%A5%EA%B8%B0%EB%A5%BC-%EB%A7%8C%EB%82%98%EB%8B%A4/

https://www.gqkorea.co.kr/2021/06/04/%EB%AC%B4%EC%8B%A0%EC%82%AC-%ED%94%8C%EB%9E%98%EA%B7%B8%EC%8B%AD-%EC%8A%A4%ED%86%A0%EC%96%B4-%EB%AC%B4%EC%8B%A0%EC%82%AC-%EC%8A%A4%ED%83%A0%EB%8B%A4%EB%93%9C-%ED%99%8D%EB%8C%80/

https://www.collinsdictionary.com/ko/dictionary/english/supermarket (Image)