[Desk Column] Black Friday and Digital Transformation

[Asia Economy Reporter Myung Jin-gyu] This is a story from about three years ago on 'Black Friday.' Around 11 p.m., I stopped by a nearby Toys "R" Us store after seeing a flyer announcing a surprise sale starting at midnight, 12 a.m. It was a chance to purchase the much-desired PlayStation 4 at a super special price, and I was also eyeing some board games that were more expensive than expected to add to my collection.

The storefront, which I expected to be packed with people, was surprisingly quiet. Inside the store, however, it was already crowded with shoppers.

With a sudden feeling of regret, I hurriedly rushed inside. Employees were stacking products throughout the store. Thinking the shopping hadn’t started yet, I breathed a sigh of relief and searched for the PlayStation 4 section. I found it soon enough but was met with a wall of people. The finish line was in sight, but I couldn’t get close, and my heart pounded anxiously.

At the stroke of midnight, employees wielded cutter knives twice the usual size to tear off the plastic wrapping around the PlayStation 4s. The crowd surrounding them surged forward all at once. I threw myself into the fray. Pushed here and there, I squeezed through the gaps between people carrying boxes, but the PlayStation 4s were already sold out. Toys "R" Us had prepared a total of 50 units, and with many people quick on their feet and skilled in the scuffle, I couldn’t win. After arriving home around 1 a.m., I comforted myself by thinking many others had also come up empty-handed, but I couldn’t fall asleep.

I searched Amazon. Although $30 more expensive than Toys "R" Us, I could still get the PlayStation 4 much cheaper than usual. I thought there was no need to stand in line and get jostled around.

According to locals, it’s common to wait in line for hours and still miss out on the desired products because others are faster. Some friends even said that going to shopping centers on Black Friday is 'crazy.' They said it’s better to spend $10 to $20 more at Walmart or Amazon and have the items delivered comfortably at home, which is true.

Three years later, after the COVID-19 pandemic, this trend has intensified. The scenes of people rushing into Best Buy stores as soon as they opened and carrying away giant TVs taller than themselves with big smiles were hard to find this year. 'Doorbuster' sales themselves have greatly decreased, and Walmart and Amazon have engaged in fierce price competition, leading shoppers to search for deals on their phones and share information through communities instead of lining up outside shopping centers.

As a result, U.S. online retailers recorded about 10 trillion won in sales on Black Friday, November 27 (local time), marking an all-time high. Earlier, China’s Alibaba Group’s AliExpress recorded a record 83 trillion won in sales on November 11 during Singles’ Day.

In South Korea, the online market has also overtaken offline noticeably. During the Korea Sale Festa, eight domestic online shopping malls recorded total sales of 3.19 trillion won (based on card payments). During the same period, department stores recorded 1.54 trillion won, and three major supermarkets recorded 924.7 billion won. Even combining department stores and supermarkets, the total was 2.47 trillion won, meaning more people shopped online, even considering cash payments.

If 2020 was the starting point for digital transformation in the retail industry, 2021 is the moment to find answers. Walmart is a good example. Amid the COVID-19 situation, it was the only U.S. online and offline retailer to grow. Remember that Walmart’s unique solutions?digital transformation efforts pondered over for years after the Amazon shock, logistics using offline stores, and in-store pickup?proved effective.