In April, Lotte Hi-Mart unveiled the Home Total Care Service, a comprehensive solution that encompasses all aspects of home appliances. (Image courtesy of Yonhap)
SEOUL, Oct. 3 (Korea Bizwire) – Consumer electronics retailers, grappling with a dire challenge for survival, are seeking innovative solutions by introducing after-sales services (AS) and membership programs. In the face of escalating e-commerce competition, diversified sales channels, and a global economic downturn, consumer electronics retailers find themselves at a crossroads.
In an effort to navigate this crisis, these retailers are endeavoring to attract customers to their brick-and-mortar stores by offering an array of services. In April, Lotte Hi-Mart unveiled the Home Total Care Service, a comprehensive solution that encompasses all aspects of home appliances. This service acts as a one-stop destination for all home appliance-related concerns, including repairs, cleaning, previous installations, and warranty insurance.
Furthermore, E-Land recently inaugurated an offline service center in Ilsan, in collaboration with Meisters, a company specializing in after-sales service and installation. This center not only repairs malfunctioning household appliances but also extends its services to products not originally purchased from E-Land.
In a strategic move to adapt to the changing landscape, E-Land introduced an insurance service in March to cover damages to home appliances. In May, it expanded its portfolio by launching paid membership stores. Both Hi-Mart and E-Land are diversifying their offerings beyond product sales in a bid to encourage more frequent customer visits.
This strategic shift is rooted in the fact that home appliances have a considerably long replacement cycle and are highly sensitive to economic conditions, making it unsustainable to solely rely on conventional sales tactics.
For consumer electronics retailers, the path to survival hinges on creating compelling reasons for customers to visit their stores repeatedly and foster ongoing loyalty, well before the next purchase is due.
Hi-Mart has reported positive outcomes from its service-oriented approach. During the first half of this year, the four stores equipped with home all-around solution centers saw a remarkable 20 percent increase in sales compared to last year. Additionally, net profits turned a corner, reaching 2.2 billion won, reversing operating losses of 25.8 billion won in the first quarter to a 7.8 billion won profit in the second quarter.
Coupang recently applied for trademarks such as OneClick and Rocket AS with the Korean Intellectual Property Office, signaling its intent to enter the home appliance after-sales service sector. (Image courtesy of Yonhap)
Amidst these transformations, e-commerce titan Coupang is causing concern as it makes strides toward enhancing its after-sales service capabilities. Coupang recently applied for trademarks such as OneClick and Rocket AS with the Korean Intellectual Property Office, signaling its intent to enter the home appliance after-sales service sector.
The company has also initiated the recruitment of specialized personnel through Coupang Logistics Service (CLS). Nevertheless, some industry insiders are questioning whether Coupang’s efforts to bolster after-sales service will truly revamp its performance.
A seasoned industry observer remarked, “Apart from exceptional cases, online purchases of home appliances are gaining popularity. For smaller appliances, beyond major appliance manufacturers with robust AS infrastructure, the quality of after-sales service will emerge as a pivotal criterion for consumers’ choices.”
Ashley Song (ashley@koreabizwire.com)
