In Markets

Retailers find winning strategy in online-only

Beanpole

Retailers have long been using online channels to make up for sluggish sales at their brick-and-mortar stores, but recently, they have taken the shift to another level, introducing products exclusively for online.

SEE ALSO : South Koreans’ awareness of mobile payment high

The trend-conscious fashion and cosmetics sectors are at the forefront of this new strategy. Beanpole Ladies, a brand under Samsung C&T, recently introduced Lime Beanpole, a series of products sold exclusively through its website. The target demographic is Koreans in their teens to 30s, and the prices are around 60 to 70 percent of Beanpole’s original lineup. The designs are youthful, including engraved prints and embroideries for fruit.

The nearly 30-year-old brand has been releasing clothes aimed at younger consumers since 2016 starting with Choco Beanpole. The last line before Lime Beanpole, called Coffee Beanpole, released for the fall and winter season last year, was a success – 80 percent of the stock was sold out.

AmorePacific brand Innisfree’s True Care cosmetics line is popular among consumers in their teens and 20s and can only be purchased online. Another AmorePacific brand, Etude House, sells its Tapa sheet masks this way. Iope’s Whitegen Essence Cushion foundation, exclusively sold online, has a demo target of consumers in their 30s.

“In the past, online-only products were special editions for those who don’t shop at brick-and-mortar stores but nonetheless have a sense of loyalty to the brand,” said Lee Min-kyu, senior vice president at AmorePacific. “Now, they’re starting to make exclusive products rather than one-time events.”

Similarly, LG Household and Health Care’s The Face Shop sells 14 products from its Bifida line only online. Another well-known cosmetics brand, Nature Republic, has 18 products from its series Bulgarian Rose sold the same way.

The biggest reason why companies are developing online-only products is their cost effectiveness. Operating brick-and-mortar stores incur high maintenance costs and investment in various stages of distribution.

“If a product is sold at brick-and-mortar stores, it’s practically impossible to sell the same thing at a lower price online,” one industry source said. “Online-exclusive products can be sold at a lower price while maintaining the same level of quality, which is why it’s more effective in attracting new customers.”

Another important motivating factor in the strategy is boosting brand loyalty among younger consumers. If something is sold exclusively online, this can attract more people to the company’s website, even if it’s just out of curiosity.

“To prevent a brand from aging, it’s important to constantly pull in younger consumers,” said Won Eun-kyung, head of Bean Pole Ladies. “But conventional ways [of rebuilding a brand image] through [such methods as] a logo change are expensive, whereas the same results can be obtained by releasing online-only products.”

Companies anticipate that if they succeed in creating a more favorable perception of the brand, sales will be affected positively in the long run.

Some companies think online is a better channel to present the product’s differentiating points to the public.

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“A characteristic of online consumers is that they tend to compare the pros and cons of a product through multiple sources like blogs rather than rely on one-sided information offered by the manufacturer’s ads,” said Koh Hyang-sook, who leads one of Woongin Foods’ marketing teams. “Apart from raising awareness of the brand, online-only is now a method used to effectively highlight the product’s advantages.”

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