Summary
June 6th, Lotte Shopping opened online supermarket. Customers can buy groceries everyday in http://www.lotteimall.com/ conveniently done with one click. This online shopping is give two advantages. One is a cheap price. Customers find discount goods easily, and they can save shopping cost like a gas fee for car and other transportations. Second advantage is saving time. Internet shopping is easy and simple. It doesn’t need time for moving, parking and finding.
Lotte has a distribution network across the whole country, so this new system is possible. It will offer free home-delivery services on all purchases, without having to spend a minimum, to households near a Lotte Super outlet. Free delivery will be provided even for the purchase of one bottle of water.
There are 89 Lotte super, and internet offer same products and price as the offline. This local online market is a unique position, and it creates synergy other major retail lines.
My opinion
Marketing is a creating value. I think the marketing strategy of Lotte Shopping creates value for customers. One is a convinience and the other is saving costomers’ time and cost. It is a kind of innovation.
This strategy is a good for long perspective. Nowadays, 40 to 50 housewives don’t know well about internet and internet shoping, but 20 to 30 housewives are different. They already know about internet, and enjoy internet shopping. Besides, the young doesn’t want to marry early, so they don’t have enough time to go shopping for groceries. Therefore, this strategy will be more popular in near future.
However, I worry about a cost structure. Surely, their cost will increase. In Korea, large discount stores are popular. Housewives want to buy in a discount price. If this strategy higher the cost, it would lower the number of customer. Especially, free delivery system is a big risk. However, if they can realize economies scale they can success.
I can’t be sure about this strategy. However, this kind of technological change will make many other kind of strategy continuously.
References;Author: By Yoo Soh-jung Title: Lotte internet mall to open supermarket, The Korea Herald. June 7, 2008
20300174 Nah Kilwoong, Entry - 14
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