"Attract Subscribers" Distribution Industry War... Convenience Store Coffee to Department Store Bread

GS25, 625% Surge in Customers
CU, 30% Increase in Subscriber Store Visits
Hyundai Department Store Side Dishes & Shinsegae Bread Popular
Expansion of Various Product Services

[Asia Economy Reporter Lim Chun-han] The distribution industry is turning its attention to the "subscription economy," where customers pay a fixed monthly subscription fee to use necessary products or services at regular intervals. The goal is to create a so-called lock-in effect that encourages continuous use of their products and services. Currently, department stores, convenience stores, and others are preparing to introduce more diverse subscription services.

◆ Three Convenience Store Chains "Targeting Regular Subscribers" = According to GS25 on the 2nd, the number of subscribers to the paid membership service "The Pop Plus" increased by 652% last month compared to its initial launch in May last year. The Pop Plus is a service where customers pay a monthly fee of 2,000 to 3,000 KRW and receive a 20-25% discount on products within a selected category for a certain period. Earlier, GS25 expanded the categories to more than 10, including sandwiches and bakery items, and launched "The Pop Plus One Meal+" in response to the popularity of the subscription service.

CU's subscription coupon service, introduced in November last year, is also receiving great responses. According to CU, as of last month, the frequency of store visits by subscription coupon purchasers increased by about 30% compared to before purchase, and the payment amount per visit rose by about 20%. The Seven Cafe monthly subscription ticket, limited to 1,000 units at 7-Eleven, sells out immediately upon release each month due to its high popularity. A 7-Eleven official stated, "We plan to expand subscription services to include ready meals such as lunch boxes and sandwiches in the future."

◆ Subscription for Side Dishes and Bread at Department Stores = Department stores have also jumped into the subscription service competition. Hyundai Department Store started a side dish subscription delivery service in August last year at 10 stores in the Gyeongin area, including the Apgujeong main branch. The number of customers using the service has more than doubled since its launch. Hyundai Department Store plans to expand the side dish subscription delivery service from the Gyeongin area to regional stores such as Chungcheong, Daegu, Ulsan, Dong-gu, and Busan within the first half of this year.

Shinsegae Department Store's bread subscription service has seen about a 60% increase in subscribers compared to its initial launch last year. Customers who purchase the bakery subscription can visit and pick up one popular product daily from bakery brands such as Menagerie, Gents Bakery, Lee Heung-yong Confectionery, Somac Bakery, and Palace Bakery. Lotte Department Store also offers subscription services for side dishes and bread.

The distribution industry is setting subscription services as a new growth engine, and the number of companies and products adopting subscription services is expected to increase. An industry insider said, "There are so many items that customers can subscribe to in the distribution sector," adding, "Other items can also be considered for subscription service introduction."