Woo Tae-hee, executive vice chairman of the Korea Chamber of Commerce and Industry, speaks during a seminar held at the KCCI headquarters in Seoul, Tuesday. (KCCI)
Business leaders and experts gathered Tuesday at the headquarters of the Korea Chamber of Commerce and Industry to discuss the current bearings of South Korean retail industries and plans they should undertake going forward.
Woo Tae-hee, executive vice chairman of the KCCI, said that according to a survey conducted by the KCCI, "worsening consumer confidence" was chosen by some 300 retail industries in the country as the top issue to tackle for the years ahead.
"Consumer confidence is showing sluggish recovery even after the pandemic,” said Woo at a seminar held for the retail industry.
"With the United States' plans to curtail inflation with rate hikes and the protracted war in Ukraine, outlooks for world economies were considered dim," he said, connoting such factors contributed to a general decrease in consumption.
Regarding the current bearings for the Korean retail industry amid such uncertainties, Seo Jung-yeon, a wholesale and retail analyst at Shinyoung Securities, predicted, “Sales of food delivery services, home appliances, furniture and household goods will decrease due to shrinking consumption until the first half of next year.”
Lee Kyoung-hee, a director at the E-mart Research Center for Retailing Industry, added, “(Overall) growth for department stores will slow down as the number of domestic travelers (going overseas) increases rapidly with the recent drop in asset prices and rate hikes."
Shin Ja-hyeon, head of the Korea Duty Free Shops Association, focused on the current market situation for Korean duty-free shops, remarking that "despite various policy supports, uncertainties in the duty-free industry have not been completely resolved."
In regard to such circumstances, Yang Jae-seok, managing director at BGF Retail, stressed that stores should focus more on producing goods specifically tailored to consumer needs.
He noted that industries should respond to changes in consumer behaviors by expanding products that reflect younger people’s consumption patterns, while emphasizing that creation of store-related content such as web dramas should take place more often.
He further added that incorporating environmental, social and governance values into the production process is necessary to appeal to consumers’ taste.
Kim Myung-gu, a consulting partner at global consulting firm Monitor Deloitte, said that retail businesses can nowadays instantly lose their competitive edge if they do not understand characteristics of rapidly changing consumer behaviors -- stressing that retail stores should be completely reorganized to align with consumer needs.
As a way to envision such plans, digitization of retail stores was pinpointed as a strategy for retail industries to undertake.
Kim Jong-geun, managing director at MarketLink, underscored that retail stores, particularly convenience stores, need to utilize stores as an online delivery base, citing data that shop owners, along with their customers, are majorly in their 20s to 40s and friendly with technologies.
Baek In-soo, a professor at Osaka University of Economics, expanded on the discussion to digitize retail stores, introducing successful examples of digital transformation in South Korea, the United States and Japan retail industries that were able to internalize such transformation through active investments.
"Internal and external uncertainties such as political agendas and financial crises will affect the domestic retail market (negatively) next year," said Chang Keun-moo, president and CEO of GS1 Korea, a nonprofit organization dedicated to the design of supply chain standards, at KCCI.
"Plans to target consumers by strengthening production of goods accommodating needs of consumers, after analyzing the consumer behaviors, will become increasingly important.”
By Lee Yoon-seo (firstname.lastname@example.org)