[Asia Economy Reporter Joesulgina] "The target of the untact store is clear. It is the MZ generation."
LG Uplus has opened its first 24-hour unmanned store, ‘U+ Untact Store’, in Jongno-gu, Seoul. It is characterized by fully automating all operations targeting the digital-savvy MZ generation. Starting with the first store in Seoul, it will expand to Busan, Daejeon, Daegu, and Gwangju within the year. In particular, in response to changes in consumer trends amid the COVID-19 environment, the company plans to innovate untact distribution channels to increase the number of 'true fans (passionate fans)' emphasized by CEO Hwang Hyun-sik.
On the morning of the 22nd, LG Uplus held an online press conference at the first unmanned store ‘U+ Untact Store’ opened in Jongno-gu, Seoul, announcing its untact distribution channel innovation strategy. This was the first event introduced since CEO Hwang took office. Besides opening the unmanned store ‘U+ Untact Store’, the innovation strategy includes ▲introducing a simple authentication and payment system for the official online mall ‘U+shop’ ▲expanding untact customer care programs.
◆Targeting the MZ Generation... 'Fully Independent' Unmanned Store Allowing New Subscriptions and Number Portability
The 24-hour unmanned store ‘U+ Untact Store’ is a space targeting the digital-savvy MZ generation. While LG Uplus’s previously established complex cultural space ‘Ilsangbiilsangui Teum (Teum)’ in Gangnam, Seoul, has become a communication space and playground that appeals to the tastes of the MZ generation, the ‘U+ Untact Store’ focuses on the core business of a telecom store while adding an environment preferred by the MZ generation.
In particular, unlike existing unmanned stores that only allow USIM activation and device changes, this store is distinguished by enabling customers to independently perform new subscriptions and number portability. At the same time, it minimizes inconveniences that young customers have experienced, such as excessive staff interaction and inconsistent services depending on the store or staff.
Park Seongsun, LG Uplus Channel Innovation Manager, introduced, "The target of the Untact Store is clear," adding, "It is a fully independent unmanned store that offers all services unmanned, including CS processing, phone purchases, and device pick-up." Regarding the decision to locate the first unmanned store in Jongno, he explained, "We judged that there is sufficient demand for unmanned services among MZ generation office workers in this area," and "(They) are familiar with digital technology and prefer unmanned services. They want quick processing during busy times."
The ‘U+ Untact Store’ operates 24 hours a day, and on offline store holidays and after the system closes, customers can check subscription information, pay bills, and change plans except for activation.
In the self-activation zone separately set up inside the store, customers can directly select the latest smartphones, device installment periods, plans, discount methods, and additional service benefits. After completing self-activation for new subscriptions, device changes, or number portability, a QR code ticket is printed, which can be touched on the unmanned locker reader to immediately receive the purchased smartphone and USIM card on-site.
Through the ‘USIM vending machine’ U+ kiosk, customers who want to activate unlocked phones or used phones can complete plan subscription and USIM activation in about three minutes untact. Bill payment, plan or number changes can also be easily handled by customers themselves through the kiosk. Additionally, all services in the store can be accessed by issuing a QR code. By entering a phone number on the ‘Welcome Board’ at the store entrance, not only customers from other carriers but also those using MVNOs can easily receive a QR code via text message through PASS identity verification.
Originally, LG Uplus planned to open the unmanned store last year but was delayed. The company explained that since they tried to automate all tasks possible in a regular store, the development scope was broad, and emphasizing intuitiveness required long verification processes involving internal staff and customers.
◆"Not All Stores Will Be Unmanned" Expansion Scale Undecided
LG Uplus plans to expand unmanned stores to five major cities including Seoul, Busan, Daejeon, Daegu, and Gwangju within the year. However, some voices express concerns about the digital divide, fearing that elderly people who are not familiar with kiosk use may have difficulties using unmanned stores. Resistance from existing dealerships and distribution channels is also inevitable with the expansion of unmanned stores.
Regarding this, Manager Park Seongsun stated, "We do not intend to make all stores unmanned," drawing a line by saying, "Existing offline stores will remain in residential areas and commercial districts with many elderly people." He also added, "Since elderly customers visiting unmanned stores may have difficulties using devices, we have equipped systems that allow staff calls and telephone consultations."
If customers visiting the ‘U+ Untact Store’ are not familiar with device usage, they can request face-to-face consultation through the counselor call system attached to each service device. Face-to-face consultation with staff is available on weekdays from 10 a.m. to 8 p.m. and on weekends from 11 a.m. to 7 p.m. on Saturdays.
Park Chanseung, Head of Sales Policy Group, also seemed aware of the distribution network’s concerns about the expansion of unmanned stores, emphasizing, "Dealerships are our valuable assets," and "We will not simply strengthen online sales but rather link online and offline to increase offline customers."
The proportion of unmanned stores among all LG Uplus stores in the future has not yet been decided.
Im Kyunghoon, Head of Consumer Sales Division at LG Uplus, explained, "There may be hybrid stores that are fully unmanned stores or offline stores equipped with the technology and systems implemented here to assist operations," adding, "So far, the extent of expansion has not been decided, and we will decide after reviewing the five stores opening this year."
◆"Let’s Make True Fans" Accelerating Innovation of Untact Distribution Channels
On the same day, LG Uplus also announced a revamp plan for its official online mall U+shop, a core online distribution channel. In April, through a partnership with Naver, Korea’s leading portal company, it will introduce Naver simple authentication and simple payment services for the first time among telecom companies. Until now, online new subscriptions and number portability required identity verification through a credit card in the subscriber’s name or a universal public certificate, but going forward, identity verification will be possible with just a fingerprint or pattern.
The complicated credit card payment method, which has been pointed out as an inconvenience when purchasing smartphones on the online mall, will also be simplified through the introduction of Naver simple payment. The strategy is to target the rapidly growing online simple payment market and the main target group, the 20-40 age group.
Kim Namsu, Head of Digital Business at LG Uplus, declared, "We will make 2021 the first year of online channel performance leap," setting a challenging goal of tripling growth within three years. To this end, they will build a 24-hour untact customer response process including AI chatbots and expand real-time communication linking online and offline such as live commerce.
All of this focuses on experience-centered services that customers see, hear, and feel, aligning with CEO Hwang’s true fan strategy to secure LG Uplus’s own true fans. Im Kyunghoon, the division head, said, "The unmanned store was prepared for the MZ generation, and I hope it will be an opportunity for them to become our fans," emphasizing, "We will create various strategies tailored to the needs of different customers."
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