Large grocery stores to pursue 'omnibus' sales channel

A worker at a Homeplus grocery store in Seoul picks up a product ordered online for its delivery service in Seoul in this 2021 file photo. Courtesy of Homeplus

By Kim Jae-heun

Large discount stores are beefing up their offline businesses by renewing shopping spaces to prepare for the establishment of an “omnibus” channel, which refers to an environment in which customers can shop more conveniently through online platforms.

A number of retailers have already made adjustments by combining online and offline business to create synergy between the two sectors amid the COVID-19 pandemic.

This helps retailers utilize the huge spaces of grocery stores while lowering their disposal rate of unsold stock. Meanwhile, retailers' e-commerce units can send products directly from the sister company's supermarket or department stores to economize delivery costs.

Overnight delivery service has become the key strategy in the e-commerce sector amid the ongoing pandemic that stimulated fierce competition in the market. As a result, retail giants like E-mart, Lotte Mart and Homeplus have been striving to strengthen their logistics systems.

From this month, Homeplus will renew 17 stores starting with its branch in Ganseok, Incheon. It currently operates 121 grocery stores and 253 supermarkets in the country; a combined 467 stores, which account for 80 percent of Homeplus' overall retail stores. At one single grocery store, Homeplus can take 1,600 online orders per day.

Homeplus plans to sets up distribution centers at all branches by 2025, at which time it will be able to handle about 130,000 online orders a day. The retailer will hire 4,870 workers and deploy 3,830 delivery trucks by then.

E-mart has been in the process of implementing a 200 billion won investment plan to renew some 28 stores in the country from October 2019. Its online shopping mall, SSG.com, in particular, has actively expanded its pick and pack center at E-mart stores to make use of the space in the grocery stores.

“The power of the e-commerce sector is growing but it cannot replace the grocery store's role 100 percent. Retailers have to balance out their online and offline businesses to seek growth and ultimately win the market share in the e-commerce scene,” an industry source said.