[Comprehensive] "Let's Make True Fans of the MZ Generation" LGU+ Opens Unmanned Stores for 'Contactless Distribution Innovation'

[Asia Economy Reporter Seulgina Jo] "In the era of COVID-19, secure true fans (passionate fans)."

LG Uplus, under the leadership of CEO Hwang Hyun-sik, opened its first unmanned store in Jongno-gu, Seoul, declaring an "untact (contactless) distribution channel innovation." Targeting the digitally savvy MZ generation, the unmanned stores will expand within the year to five major cities including Seoul, Busan, Daejeon, Daegu, and Gwangju, and for the first time among telecom companies, will introduce Naver simple authentication and simple payment services. By responding even faster to the untact innovation accelerated by the COVID-19 pandemic, LG Uplus plans to increase its own true fans.

◇First unmanned store in Jongno, Seoul... 4 more locations within the year

On the morning of the 22nd, LG Uplus held an online press conference at its first unmanned store ‘U+ Untact Store’ opened in Jongno-gu, Seoul, announcing its untact distribution channel innovation strategy. This was the first event disclosed by LG Uplus since CEO Hwang’s inauguration.

The innovation strategy focuses on adapting to changing consumer trends in the COVID-19 environment, including ▲opening the unmanned store ‘U+ Untact Store’ ▲introducing simple authentication and simple payment systems on the official online mall ‘U+shop’ ▲expanding untact customer care programs. Im Kyung-hoon, Head of LG Uplus Consumer Sales Division, who attended the conference, emphasized, "Customer demand for untact services has increased since COVID-19," and added, "Through distribution channel innovation, we will gain genuine customer empathy and secure true fans."

Seoul Jongno-gu's first 24-hour operating U+ Untact Store

Based on months of prior customer research, LG Uplus opened the 24-hour U+ Untact Store No. 1 in Jongno-gu, Seoul. Unlike existing unmanned stores that only allow USIM activation and device changes, this store enables customers to independently complete new subscriptions and number portability. A self-activation zone is also separately provided inside the store. LG Uplus plans to open additional U+ Untact Stores in Busan and Daejeon in the first half of the year, and in Daegu and Gwangju in the second half.

The U+ Untact Store is a space targeting the digitally native MZ generation. While LG Uplus’s previously established complex cultural space ‘Ilsang Bi Ilsang-ui Teum (Teum)’ in Gangnam, Seoul, became a communication space and playground tailored to MZ generation tastes, the ‘U+ Untact Store’ focuses on the core telecom store functions while adding an environment preferred by the MZ generation.

Park Sung-soon, Head of Channel Innovation at LG Uplus, introduced, "The target of the Untact Store is clear: the MZ generation," adding, "It is a fully independent unmanned store offering all services including customer service processing, mobile phone purchases, and device pick-up without staff." The store minimizes inconveniences previously expressed by the MZ generation such as excessive staff interaction and inconsistent services across stores and employees, while enabling quick service during busy hours. The decision to locate the first unmanned store in Jongno was based on the judgment that there is sufficient demand for unmanned services among MZ generation office workers in the area.

However, some voices express concerns about the digital divide, fearing that elderly customers, who are not familiar with kiosk use, may find it difficult to use unmanned stores. The expansion of unmanned stores is also expected to face resistance from existing distribution channels such as dealerships.

Regarding this, Park Sung-soon stated, "We do not intend to make all stores unmanned," clarifying, "Existing offline stores will remain in residential areas and commercial districts with many elderly customers." He also added, "Since elderly customers visiting unmanned stores may have difficulties using devices, we have set up systems for staff calls and telephone consultations."

Im Kyung-hoon, Head of Consumer Sales Division, explained, "There may be hybrid stores that combine fully unmanned stores and some of the implemented technologies and systems to assist operations in offline stores," adding, "It has not yet been decided how extensively to expand, and we will decide after reviewing the five stores opening this year."

◇Partnering with Naver for simple payment... U+shop aims to triple growth within 3 years

The official online mall U+shop, a key online distribution channel, will also be revamped. Through this, LG Uplus has set an ambitious goal of tripling growth within three years. Kim Nam-soo, Head of Digital Business at LG Uplus, emphasized, "2021 is the first year of online channel leap," and added, "We will achieve 300% growth targets for mobile and internet by 2024." Despite the COVID-19 pandemic last year, U+shop recorded 32% growth in internet sales and 27% growth in mobile sales compared to the previous year.

Next month, LG Uplus will introduce Naver simple authentication and simple payment services on U+shop through a partnership with Naver, Korea’s leading portal company. The strategy is to target the rapidly growing online simple payment market and the key demographic of people in their 20s to 40s.

Previously, online new subscriptions and number portability required identity verification through a credit card in the customer’s name or a universal public certificate, but going forward, identity verification will be possible using just fingerprints or patterns. The complicated credit card payment process, which has been a customer inconvenience when purchasing smartphones online, will also be simplified through the introduction of Naver simple payment.

Interior view of the U+ Untact Store

LG Uplus is building a 24-hour untact customer response process including AI chatbots and expanding real-time communication linking online and offline channels such as live commerce.

LG Uplus also newly launched the untact customer consultation system ‘U+shop AI Chatbot.’ It features an advanced AI chatbot function applying the latest deep learning language model ‘BERT.’ Preliminary tests showed that the U+shop AI Chatbot’s consultation accuracy reached 90%, ranking among the highest in Korea. LG Uplus plans to continuously enhance AI capabilities through collaboration with LG AI Research Institute, where group resources are concentrated.

In cooperation with Hana Financial Group, a dedicated U+shop partnership card will be launched in the second quarter. Depending on monthly usage, customers can receive discounts up to 25,000 KRW per month.

All of these efforts align with CEO Hwang’s true fan strategy, which focuses on experience-centered services that customers see, hear, and feel, aiming to secure LG Uplus’s own true fans. Known as a ‘sales expert,’ CEO Hwang has emphasized the need to secure passionate fans who are enthusiastic about LG Uplus’s services since his appointment in the second half of last year.

Im Kyung-hoon, Head of Consumer Sales Division, said, "The unmanned store was prepared for the MZ generation, and we hope it will be an opportunity for them to become our fans," adding, "We will create various strategies tailored to the needs of different customers."

This content was produced with the assistance of AI translation services.