To attract shoppers, department stores are breaking old rules

Industry

Published: 23 Nov. 2017, 20:43

To attract shoppers, department stores are breaking old rules

A Benefit store inside the dessert area of the IFC Mall in Yeouido, western Seoul. [JOONGANG ILBO]

An old department store convention dictates that luxury brands like Chanel, Dior and Estee Lauder should sit on the first floor, while eateries should go in the basement to prevent the smell of food from overpowering the perfume.

But facing slow sales, many stores in Korea are breaking the rules and trying new arrangements to entice shoppers. Food courts have been moved upstairs, dessert shops sit next to cosmetics stores and luxury brands are going to unconventional places.

On Wednesday, Nam Hee-yoon, a 27-year-old office worker in Yeouido, western Seoul, was visiting the nearby IFC Mall for lunch. Most of the restaurants are confined to one floor, while stores are located upstairs.

Nam usually doesn’t have time during her lunch hour to go window shopping. But today, her co-worker was craving a cake, and they stopped by a dessert shop to indulge their sweet tooth. Afterward, they noticed the cosmetics store next door and decided to make an impromptu purchase of lipstick.

“Unlike clothes, cosmetics take less time to purchase, and I can do so with a lighter heart,” Nam said. “Next time, I’m thinking of finishing my meal early and taking a look around the fashion stores as well.”

Department stores are strategically placing fashion and cosmetics shops next to food courts and restaurants to improve foot traffic to the retailers. The Shinsegae Department Store in Gangnam announced Wednesday that Chanel, Mac and Armani would open stores on the first basement level, the same floor as the food court.

All three brands already have their own stalls on the first floor; the new ones near the food area will be their second. It’s the first time that luxury brands have opted to go underground in a Korean department store.

Shinsegae made an earlier attempt in May to move cosmetics to the lower floors, starting with its multi-brand cosmetics store Chicor. After the move, the Gangnam department store noticed a sharp increase in the number of cosmetics shoppers in their 20s and 30s.

The share of 20-somethings buying cosmetics rose to 11.8 percent after Chicor’s launch in May from 7.1 percent last year. Among those in their 30s, the share rose five percentage points to 31.4 percent.

The company has attributed the performance to the department store’s underground connection to the Express Bus Terminal’s shopping center, which abuts the Shinsegae Department Store.

“The shopping center attracts a lot of people in their 20s and 30s,” said Kim Young-sup, Shinsegae’s vice president for international accesories. “We plan to continue organizing the basement floor with products that cater to young women.”

In Incheon, Hyundai Premium Outlet has placed a food court on the first floor of its Songdo location.

Like department stores, the old convention for outlets says luxury brands ought to go on the first floor, but the placement of a food court on this prime real estate suggests eating has become as important as shopping for visitors.

At the IFC Mall, where desserts now sit alongside cosmetics, the mall noticed total sales more than double in August and September compared to last year. The biggest change was Benefit, an American cosmetics brand, opening a store inside the mall’s dessert zone.

“Young women who come to eat at dessert stores flow into cosmetics and fashion stores nearby, and this naturally leads to actual purchases,” said Ahn Hye-joo, a senior executive at the IFC Mall. “Revolutions in brick-and-mortar retailers that cater to consumers’ shopping patterns are a must for survival against online shopping channels.”

BY CHOI HYUN-JU [song.kyoungson@joongang.co.kr]