W50,000 Bills Shift Transaction Culture
By Jane Han
Staff Reporter
Han Hyung-sook, a 57-year-old housewife, was one of the first batch of consumers who shopped Tuesday using the freshly-issued 50,000-won bill. She quickly realized why the new banknote would trigger more spending.
At the end of her grocery shopping, a good mix of items came out to be 42,000 won. But instead of paying with four 10,000-won and two 1,000-won bills as she would've done before, Han paid with one simple 50,000-won bill and got change back.
``Receiving change puts a different perspective on the shopping experience,'' said Han, who explained that she didn't feel as though she spent so much. ``I actually felt the urge to purchase more and max out to 50,000 won.''
For ordinary consumers, this is an odd and unexpected itch, but such shopper behavior is exactly what marketers have been expecting.
``Fifty-thousand-won will soon become the new standard in spending,'' said Kim Young-min, a spokesman of I'Park Mall, a high-end retailer, who explained that retailers are going to make all sorts of adjustments to make it easier for consumers to spend the new banknote.
For example, instead of selling one T-shirt for 35,000 won, retailers may start selling two for 50,000 won. Plus, popular 99,000-won promotions may be adjusted down to 49,000 won to encourage spending, according to industry experts.
The country's top department stores such as Shinsegae, Lotte and Hyundai have already kicked off special promotions to convince shoppers that the new bill is a money-saver.
However, critics say that such strategic marketing won't last long, warning that the fresh highest-denomination bill is going to fan bolder consumption across the board.
``Shoppers will begin to have a different perception of products priced in the 30,000- to 40,000-won range,'' said Lee Jae-jin, a Shinsegae marketing official, who explained that they'll come off as more affordable than before since a single bill can cover the cost.
He said retailers will make appropriate price accommodations so that they can fully capitalize on the evolving consumer sentiment.
Lotte expects that the new bill will drive up overall department store revenue by 2 percent, as there will be more variations of products priced higher than now.
Another expected change is in the amount of congratulatory and condolence cash gifts.
Till now, 30,000 won has widely been considered the standard for simple acquaintances, but the introduction of the new bill is likely to push up the standard to 50,000 won.