Retailers tailor Seollal gift sets to both high and low ends
While many consumers are looking for mid- to low-cost practical gift sets amid the economic downturn, premium sets that offer luxury limited-edition products are also popular despite their high price tag.
Most department stores categorize gift sets under 100,000 won ($83) as low-price sets and those over 500,000 won as high-price sets. At discount hypermarket chains, sets under 20,000 won are considered inexpensive while those exceeding 100,000 won are deemed costly.
According to Lotte Department Store on Monday, presale revenue on holiday gifts from Dec. 21 to Jan. 10 was up 52.9 percent year on year. The growth was led by practical gift sets priced at less than 100,000 won.
However, after the main sales period began, demand for premium sets continuously increased. For retailers, this means having to cater to customers on both the low and high end.
In response, Lotte Department Store first expanded its stock of practical gift sets by more than 15 percent compared to last year. It added more than 20 percent to its wine supply in the 30,000 to 50,000 won price range.
On the high end, the department store produced premium Seollal gift sets for VIP customers packed with combinations of 100 different luxury products including Pont des Arts Cognac, a fine champagne that costs around 1.4 million won, and Furla’s Piper Lux bag, worth around 1.08 million won.
Hyundai Department Store saw the same trend in sales, with low- and high-end gift sets both equally on the rise. Gift sets of canned foods, seasonings and desserts below the 100,000 won price range showed an 18.7 percent year-on-year increase in sales revenue. At the same time, sales of Korean-beef gifts sets over 500,000 won increased 12.3 percent year on year.
“Due to economic declines in the country, there is a surging demand for practical gift sets that cost between 100,000 won and 200,000 won,” said Yoon Sang-kyung from products management division of Hyundai Department Store. “Still, consumers less susceptible to economic downturns favor high-end gifts such as Korean-beef gift sets that cost over 500,000 won, of which all 100 sets are sold out.”
Discount chains such as Emart have also seen growth in popularity of gift sets in the lowest and highest price ranges.
Sales of expensive sets priced around 50,000 won to 100,000 won from Dec. 25 to Jan. 17 skyrocketed 1,278.2 percent year on year. Sales of practical gift sets priced less than 10,000 won also soared year on year by about five times.
However, sets in between the premium and practical categories, which range between 20,000 won and 30,000 won, recorded a loss of 8.6 percent compared to the previous year.
The hotel industry is jazzing up their high-end gift sets by providing unique experiences.
The Westin Chosun Seoul is offering a “home curating service,” in which an interior decorator goes to the home or office of a customer to help curate art pieces from a gift set provided exclusively by the hotel. Over 3 million won worth of artwork by artists Lee Wal-chong and Lee Su-dong are part of the set.
Lotte Hotel is targeting big spenders with a limited-edition 45 million won Louis XIII le Jeroboam Cognac.
The Plaza Hotel is offering sets of wine and food specially selected by the hotel’s sommelier and chef, along with direct packaging and delivery by employees of the hotel.
Differentiated delivery service is a big keyword for this year’s holiday season, with major retailers including hotels competing to provide more personal and meaningful delivery systems.
Lotte Department Store is increasing the number of direct deliveries provided by 59 board members of the company, including the head of each department store branch. Each board member visits customers’ houses with the delivery in hand, though the number of deliveries are limited.
Hyundai Department Store is expanding its safety and night-time delivery services, while Shinsegae Department Store is limiting the number of deliveries to 40 orders per car to enable quick and accurate service.
“Delivery problems in the holiday season can cause critical discontent,” said an industry insider. “Since delivery loads for this Seollal season is expected to mount, customer satisfaction may largely depend on the quality of each retailer’s delivery system.”
BY LEE SO-AH [firstname.lastname@example.org]