Investments in Digital Transformations

SDGs:

  • GOOD HEALTH AND WELL-BEING

    3

  • GENDER EQUALITY

    5

  • DECENT WORK AND ECONOMIC GROWTH

    8

  • RESPONSIBLE CONSUMPTION AND PRODUCTION

    12

  • PARTNERSHIPS FOR THE GOALS

    17

Digital Customer Experience

With the emergence of phones, tablets, laptops, etc., we now live in an era where people own multiple devices. SKM not only hopes to provide customers with a safe and relaxing shopping environment, but is also dedicated to integrating online and offline resources, developing diverse marketing tools, providing guided shopping services through mobile applications, and offering online shopping and other digital services through digital internet technologies. Our goal is to deliver convenient services that cater to our customer's individual needs and establish a stronger presence in their lives, enabling them to enjoy high-quality shopping experiences anytime and anywhere.
 

Digital Transformation Evolves Further: Creating More Diverse Service Experiences

Highlight I: SKM Media-First retail media brand operated by a department store in Asia.

Building on a solid foundation of a strong fashion image, high-value members, and robust online and offline platforms, SKM launched SKM Media in June 2023, becoming the first retail media brand operated by a department store in Asia. SKM Media focuses on delivering professional content by utilizing precise data analytics, O2O marketing tools, advertising system development, and modular data applications. Integrated with the SKM APP, the official website, and social media platforms, SKM Media proactively sends messages during festive periods to members most likely to interact with the brand, thereby increasing foot traffic and boosting sales.

Highlight II: Social Friends to Membership Conversion Plan - Optimization of LINE Friend Membership Mechanism

SKM, with the largest membership base in Taiwan, boasting 3.6 million members and 85% of its revenue generated from SKM members, recognizes that recruiting members across various age groups is key to generating more revenue. To this end, SKM not only collaborates with its subsidiaries and external business partners to recruit new members but also integrates payment tools and social media platforms to directly upgrade social media users to SKM members. By leveraging the SKM APP, official website, and social platforms, the company disseminates attractive membership incentives. From June to September 2023, the Social Friends to Membership Conversion Plan successfully recruited 125,000 young members. Going forward, SKM will continue to optimize and plan recruitment activities tailored to effective incentives for customers in different regions, with the goal of nurturing each new member into a potential key customer segment using the Customer Data Platform (CDP) and Marketing Automation (MA) tools.

Evolving Management Systems Deliver Outstanding & In-depth Membership Services

Highlight I: Proactive Preparation for the Cookieless Era Through SEO

In response to the anticipated phase-out of third-party cookies by 2024, businesses are facing significant challenges, including difficulty in capturing external traffic audience profiles and implementing personalized marketing strategies. This change is expected to substantially impact the performance of marketing teams and overall business revenue. According to an international survey, 44% of marketers predict that they will need to increase their spending by 5% to 25% to achieve the same objectives as they did in 2021.

As a result, enhancing SEO strategies becomes crucial for maintaining visibility and effectiveness in digital marketing efforts in the cookieless future.

Highlight II: Major Advancements in skm online Website and Official Marketing Tools

The forerunner to skm online was beauty STAGE, an e-commerce platform specializing in makeup and cosmetics. When the COVID-19 pandemic broke out in Taiwan in 2021 and offline sales were severely impacted, SKM acted swiftly and boldly, transforming beauty STAGE into skm online in just 14 days and expanding the product offering from 20,000 to over 80,000 products. Despite the challenging circumstances, we successfully achieved revenue growth and witnessed a seven-fold revenue increase in the six months following the system roll-out compared to the preceding six months.

Highlight III: Electronic Business Operations System

With retail channels embracing digital transformation, we are entering a new era of smart retail. To adapt to these market changes, we are optimizing our existing digital B2C platform and digitalizing manual and paper-based business operations. This transition not only reduces paper consumption but also significantly enhances SKM's work efficiency, reduces human errors, and facilitates internal communication and management, ultimately enabling us to provide customers with high-quality services.

Innovative Digital Shopping Experience

Highlight I: Digital Member Management

In the past, membership applications were mainly promoted through department store campaigns and paper-based methods. However, SKM has now introduced a membership application portal on the skm app. This modern digitalization approach not only aligns with current trends but also reduces the risk of COVID-19 contacts, enhances paperless operations, and potentially frees up manpower for other core tasks. In addition, our mobile application has completely replaced physical member cards. As of July 20, 2022, we no longer issue physical cards, eliminating the inconvenience of customers having to carry multiple cards and reducing waste and carbon emissions.

Highlight II: New skm points System

The new skm points system can strengthen member loyalty and stickiness, generating a circular economy where "SKM issues points to customers → Customers redeem points." In 2023, SKM for the first time introduced a points-based reward program for meeting spending thresholds. Additionally, targeting the post-pandemic recovery of the travel industry, the company formally expanded its points ecosystem at the end of the year by establishing a bilateral points exchange partnership with "Asia Miles." Looking forward, plans are in place to expand into more complementary industries within the entertainment sector, enabling skm points to fulfill a wider range of members' entertainment needs. Compared to the previous year, the number of point-based items in the dedicated section increased by 3,702, bringing the total to over 100,000 point-redeemable products. Click rates for these products grew by 645,000, representing a 91% increase from 2021.

Highlight III: Implementation of AI-Powered On-Site Search to Enhance Shopping

After implementing the AI search feature in 2023, significant improvements were noted across several metrics including website conversion rates, duration of page visits, and the number of pages browsed. SKM Online's total revenue increased by 60%. In the short term, SKM will continue to leverage intelligent search capabilities, using big data algorithms to predict products of interest based on individual user search results. These products are then promoted on the homepage and through web push notifications, ensuring that the right products are communicated through the right channels to the right customers.
 

Highlight IV: SKM Data Empowerment through MarTech System Implementation Plan

To boost member activity, strengthen online and offline performance, and monetize retail media, SKM introduced MarTech tools (CDP, MA) in 2023. The initiative began with new member recruitment and involved setting up a one-stop data platform for managing customer information, including membership details, consumption records, and ad interactions. This platform facilitates data analysis and combines it with the official website, skm app, and social media platforms to deliver personalized, real-time, and continuous marketing information. This includes reminders about member benefits and shopping discounts. Additionally, the integration with skm pay and skm points enhances member experience and customer loyalty, while SKM Media synergizes to communicate with customers through a more diversified approach, actively sending shopping information during festive seasons.