Tesco Homeplus Virtual Subway Store in South Korea

Summary

Tesco, rebranded as Homeplus in South Korea, faced the challenge of having fewer stores compared to its competitor Emart. To solve this, they launched virtual stores in subway stations, where customers could shop using their smartphones by scanning QR codes. This innovative approach allowed busy Koreans to shop while commuting, turning waiting time into shopping time. The campaign led to a significant increase in online sales, with a 130% rise, and boosted new memberships by 76%. Homeplus became the leader in the online market and closed the gap offline as well.

Takeaways

• 🇰🇷 South Korea is a unique market where Tesco rebranded itself to Home Plus to adapt to local preferences.
• 📉 Despite being number two in the market, Home Plus faced a challenge of fewer physical stores compared to the top competitor, Emart.
• 🎯 The mission was to become number one without increasing the number of stores.
• 💼 Koreans are among the most hardworking people, and grocery shopping once a week is seen as a burdensome task.
• 💡 The solution was to bring the store to the people by creating virtual stores in everyday locations, such as subway stations.
• 📱 Virtual stores replicated real stores, but with the innovation that people could shop by scanning QR codes with their smartphones.
• 🚚 After completing their online purchase, products would be delivered to the customers' homes shortly after they returned.
• 🛒 This approach allowed people to shop conveniently without visiting physical stores, turning waiting time into shopping time.
• 📈 As a result, online sales increased significantly, with a 76% rise in new registered members and a 130% boost in sales.
• 🥇 Home Plus became the leader in the online grocery market and nearly overtook the number one spot in the offline market.

Q & A

What was the main challenge Tesco faced in South Korea?

Tesco had fewer stores compared to the number one company, Emart, which made it difficult to compete directly in physical locations.

How did Tesco address this challenge without increasing the number of stores?

Tesco created virtual stores in public spaces like subway stations, allowing customers to shop using smartphones by scanning QR codes, which turned waiting time into shopping time.

What was the key insight Tesco gained from studying South Korean consumers?

Tesco discovered that South Koreans are the second most hardworking people globally and view weekly grocery shopping as a dreaded task.

What innovative idea did Tesco come up with to address the needs of busy South Korean consumers?

Tesco decided to bring the store to the people by setting up virtual stores in places like subway stations, allowing consumers to shop on the go using their smartphones.

How did the virtual stores function?

The virtual stores were designed to resemble actual stores, with displays of merchandise. Customers could scan QR codes with their smartphones, adding items to their online cart, and have the products delivered to their homes after completing the purchase.

What was the result of Tesco's virtual store campaign?

The campaign led to a significant increase in online sales, with 10,287 consumers visiting the Homeplus online mall using smartphones, a 76% rise in new registered members, and a 130% increase in online sales.

How did Tesco's online sales performance compare after the campaign?

Homeplus became the number one company in the online market in South Korea and was very close to being the second largest in offline sales.

Why did Tesco change its name to Homeplus in South Korea?

Tesco rebranded itself as Homeplus to better adapt to the local South Korean market and to appeal more directly to Korean consumers.

What technology did Tesco leverage to implement its virtual stores?

Tesco utilized smartphones and QR codes to allow consumers to shop virtually by scanning items from the displays, which would be automatically added to their online carts.

How did the virtual stores benefit South Korean consumers?

The virtual stores allowed consumers to shop conveniently without physically visiting a store, turning their waiting time into productive shopping time, and giving them more free time after work and on weekends.