Korean retailers reel in loyal customers with paid membership programs

Industry

Published: 05 Oct. 2022, 17:06

Korean retailers reel in loyal customers with paid membership programs

Emart Traders will change its name to Traders Wholesale Club and introduce a paid membership program. Banners advertising the new paid membership program are seen at Emart Traders' branch in Nowon District, northern Seoul, on Tuesday. [NEWS1]

Retailers in Korea are actively introducing paid membership programs to attract and retain loyal customers.

Big box store Emart Traders announced Tuesday it will change its name to Traders Wholesale Club and implement a paid membership system.

The program is similar to that of big box chain Costco, but will allow customers who have not registered as a member to shop at the store.

At Costco, only members can purchase products at stores, either with cash or specific credit cards issued by certain credit card companies. This limits the store's accessibility to the masses, but may increase customer loyalty of those who have joined and paid the membership fee.

The Traders Wholesale Club membership program will come in two different options: the standard plan for an annual fee of 30,000 won ($20) and the premium plan for 70,000 won.

Depending on the plan, 1 to 2 percent of members' purchases will be rewarded as points, called TR cash, which can be used as cash at the store. Members will also be able to purchase popular products at a special discounted price every month.

The official implementation of the program will start next year, on Jan. 1, and the early bird registration promotion will be open through Dec. 31.

Lotte Homeshopping also introduced a paid membership program called Y.Club, specifically for those in their 20s and 30s, on Wednesday. The company said it decided to release the program as these specific age groups have emerged as major consumers in Korea lately.

The customer will need to pay 50,000 won as a registration fee to join the program and will be given various perks, including 70,000 won worth of reward points, discounts of up to 15 percent and free delivery.

“We will continue to fulfill consumer demand by operating membership programs that reflect consumers’ purchase patterns and trends,” said a spokesperson for Lotte Homeshopping.

Other domestic retailers are also jumping on the membership bandwagon.

GS Fresh Mall, GS Retail’s online grocery store, started offering its paid membership service called Prime Membership in July. For a monthly fee of 3,900 won, members are offered unlimited free on-day delivery and discount coupons.

Shinsegae’s subsidiary Shinsegae International will be hosting a membership week through Oct. 10. During this period, Shinsegae members will be offered various benefits, including 10 percent discounts.

Joining the membership program does not require any fee, but customers are classified into different tiers depending on how much money they spend and are offered benefits accordingly.

During the membership week held in the first half from April 29 to May 8, sales among member customers rose 61.9 percent on year, while the number of new customers joining the program surged 72.5 percent on year, according to Shinsegae International.

BY YOO JI-YOEN [cho.jungwoo1@joongang.co.kr]