Large retailers find it pays to let kids play

Mothers, children and a staff member of Sangsang Nori Kids Cafe play together at one of 81 playrooms that Homeplus operates at stores nationwide. Provided by the company

The line seemed endless as parents waited for nearly an hour on a recent rainy Sunday behind the ticket booth at Cocomong Land, a so-called “kids cafe” on the sixth floor of NC Department Store in Songpa, southeastern Seoul.

It was near chaos, but parents were ready to tolerate the wait, the rain and the noise as long as their kids had fun.

“There are not many places to go when it pours like today,” said a 34-year-old woman who lives five minutes away. “Cocomong Land is not as expensive as going to a larger amusement park like Lotte World or as far as Everland, and our family can go shopping afterward.”

Large retailers are stepping up their marketing and services targeting children in order to lure customers in their 30s and 40s, a very desirable retail demographic.

Customers with children account for a substantial portion of sales at these large discount stores, where families often shop together. Demand for kids’ facilities is high and retailers are expanding amenities to allow parents to shop conveniently while their children have fun.

And these days, parents share information about day-care facilities at large discount stores in their neighborhood through various social networking services and blogs.

“I have a 17-month-old daughter, and on weekends my wife looks for good kids’ cafes through blogs or word of mouth. Even if stores that have good kids’ cafe facilities are more distant, we tend to visit those stores and shop there,” said a 38-year-old office worker surnamed Lee.

Such a trend has increased the importance of nursery operations for large discount stores. It is also part of their efforts to maximize the efficiency of existing stores at a time when a variety of government restrictions are applied to opening new stores.

Lotte Mart operates Playroom at its 45 Kids Mart stores out of 104 stores nationwide, including those in Jamsil, southeastern Seoul, Yeongdeungpo, northwestern Seoul, and Busan.

The playrooms are about 1,423 square feet and are equipped with rides and educational toys.

E-Mart has introduced its Kids Cafe at its Yeonsu store in Incheon, its Wolgye store in northeastern Seoul and its Jukjeon store in Seongnam, Gyeonggi.

At Homeplus, there are 34 Sangsang Nori Kids Cafes and those stores showed about 20 percent higher sales on average, with toys jumping 40 percent to 50 percent, according to the chain.

Sangsang Nori Kids Cafe at the newly-renovated Homeplus Bucheon Sang-dong store has averaged about 140 million won ($124,000) in revenue each month.

In addition, although smaller than Sangsang Nori, there are 81 playrooms for children at Homeplus stores, including Play Time at 40 stores, Yukids Island, Block Bus and Sangsang Block at two stores each; and Homeplus Playground at one.

In addition, there are about 1 million members of the Baby and Kids Club at Homeplus, the average transaction for whom is about 20 percent higher than that for other customers.

In July 2005, Homeplus launched Baby Club, which provided a variety of benefits to customers with infants and small children; in October 2006, it launched Kids Club to supplement the Baby and Kids Club.

Among customers with Family Cards, pregnant women and mothers with children younger than 83 months can subscribe to the Baby and Kids Club.

“Considering that there had been no systematic services for young children in the retail industry, the Baby and Kids Club was a groundbreaking service aimed at the growing niche market for infants,” said a spokesman for Homeplus.

Homeplus gives discounts to members of the Baby and Kids Club by sending coupons for different growth stages children four times a year.

“Unlike the main targets of discount stores being aligned with housewives, major customers of Homeplus are in the range of family,” said Yoon Mi-jung, Family Card director at Homeplus. “In this dimension, we see children as major customers.”

Meanwhile, Shinsegae Department Store has also introduced a variety of summer events geared toward children at its stores nationwide.

At Shinsegae’s Incheon, Gyeonggi and Uijeongbu stores, culture halls will be transformed into aquariums through mid-August.

Shinsegae Centum City in Busan is holding a Danish Illustration Fairy Tale event at its culture hall on the ninth floor through Sunday. The exhibition includes a Danish illustration photo zone, animated films and experiential learning. And, of course, a play area.

“Recently, the competitor of department stores is not other retail stores, but amusement parks, and it is important to provide a variety of entertainment and cultural factors as well as shopping when customers visit,” said Gil Shin-hyeon, director of the culture division at Shinsegae Department Store.

Shinsegae Centum City in Busan also recently opened an outdoor theme park called Zooraji after renovating the sky park on the ninth floor.

BY KIM JUNG-YOON [kjy@joongang.co.kr]