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BGF Retail seeks 'onlineization' of offline convenience stores to win competition

By Lim Chang-won Posted : September 13, 2022, 11:02 Updated : September 13, 2022, 17:37
 

[Courtesy of BGF Retail]


SEOUL -- South Korea's convenience store industry has diversified customer-friendly services to attract customers. They never close and get rooted deeper into everyday lives as a place to buy groceries, snacks, simple meal packages and non-food products. A COVID-19 pandemic has boosted sales at convenience stores as people shun crowded shopping malls.

In a market crowded with tens of thousands of corner shops, BGF Retail, the operator of South Korea's major convenience store chain CU, has been in the vanguard of renovation by introducing unmanned stores at night, autonomous payment systems, and meal kits, which are convenient heat-and-eat food packages. 

Meal kits provide processed ingredients and seasonings so that consumers can easily complete the dish just by following the simple cooking instructions using a stove or a microwave oven. Demands for meal kits have increased thanks to people who chose to stay at home and eat meal kits or delivered food to avoid visiting crowded supermarkets or shopping malls.

In preparation for an infinite survival competition to come, BGF Retail has come up with the idea of "onlinenization" that would allow each convenience store to showcase differentiated products and hold discount events on its own app through BGF's mobile app called "Pocket CU." Store operators can send text messages to regular customers and communicate with them.

"Our country is small. Someday, there will be limitations in quantitative growth," Kim Seok-hwan, a BGF official in charge of digital transformation and Pocket CU's development, said in an interview with Aju Business Daily. "We are seeking a breakthrough by proactively increasing sales and profits of individual stores and strengthening our product structure and online for offline (O4O) services."

The number of active Pocket CU users rose from 2.5 million at the end of 2021 to 3.5 million in August 2022. "The key is to allow store owners to do sales activities at Pocket CU," Kim said, singling out a stock inquiry as the most popular menu. Inventory checks are available at all stores across the country because the app reflects inventory in real time within a minute or so.

BGF Retail started working on the renewal of its mobile app in August 2022 to open online convenience stores beyond simply linking offline stores with its mobile app. The goal is to allow franchise owners to post specialized products through their online stores and hold their own discount events.

In the early days, convenience stores had the same price and product structure. BGF Retail is trying to change the old concept "Through this renewal, we will be able to showcase differentiated products for each convenience store and hold independent discount events," Kim said. "Convenience store owners will be allowed to send coupons and event schedules to customers."

 

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