'Cheaper if you pick it up': How retailers are luring customers back to stores

South Korea's retail industry, hemmed in by store saturation and tightening operating regulations, is turning to O4O (Online for Offline) strategies through its own apps to find a way forward — most recently by expanding pickup services that draw customers into physical stores.

GS The Fresh, the supermarket chain operated by GS Retail, has been running a weekly "open-run" promotion every Wednesday at 8 a.m. through its "Our Neighborhood GS" app since last year, industry sources said Thursday. Shoppers reserve products through the app and collect them in store. The lineup spans seasonal fresh produce, trending items such as Dubai Chewy Cookie kits, and discounted liquor and processed foods.

At Wednesday's open-run, a 1.5-kilogram pack of dried anchovies retailed at 39,800 won ($27) but was offered for 19,800 won — roughly half price. Popular items such as domestic pork samgyeopsal and freshwater eel routinely sell out within 10 minutes of going live, with virtual queues forming as demand spikes. Sales through the open-run promotion surged 243 percent in the first half of this year compared with the same period last year.

GS25's "fresh food pre-order" service follows the same model. Customers use the app to order seasonal seafood, large-pack meat cuts and produce that are difficult to stock at a standard convenience store, then collect their purchases at a store of their choice. Sales through the service nearly quadrupled in the first half of this year compared with the same period last year.

Pickup services are expanding across the industry. CU launched "CU BAR," which lets customers reserve and purchase liquor through its Pocket CU app, helping push the chain's first-half pickup and pre-order sales up 38.5 percent year on year. Seven-Eleven broadened its pre-order service, which had focused mainly on liquor and select limited-edition products, to cover desserts, bakery items, daily necessities and character-collaboration merchandise. Its first-half pre-order sales tripled year on year, while same-day pickup sales rose sixfold. E-mart24's pre-order volume also roughly doubled in the first half of this year compared with the same period last year.

The trend reflects the growing difficulty of expanding physical store networks. The combined store count of South Korea's four major convenience store chains fell to 53,266 last year, down 1,586 from the previous year — the first decline since convenience stores were introduced to the country in 1988, 36 years ago. Corporate supermarkets, subject to operating-hour restrictions and mandatory closure rules, managed only a 1.0 percent increase in store count last year, reaching 1,198 locations.

"Pickup service usage has been rising recently, driven by high prices and a growing preference for nearby shopping," an industry official said. "Because these services bring more visitors into stores and generate additional sales, the related services and product categories will keep expanding."