Retailers rethink amenities in efforts to appeal to families

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Retailers rethink amenities in efforts to appeal to families

Published: 08 Jan. 2018, 20:26

The eighth floor of Hyundai Department Store’s Cheonho branch in eastern Seoul contains stores and amenities targeted towards children, including cafes that offer amusement facilities for kids and a resting place for parents. [HYUNDAI DEPARTMENT STORE]

Children have become an important target for major retailers in Korea as a way to attract families in a troubled industry where growth has been slow due to the rise of e-commerce.

Hyundai Department Store renovated an entire floor of its Cheonho branch in Gangdong District, eastern Seoul, and dedicated it to children and their families.

The 4,000-square-meter (43,055-square-foot) space on the building’s eighth floor, newly named the “Kids and Family Hall,” opened to the public on Friday and features 80 children’s fashion, furniture and educational material brands. This is double the amount of stores that the floor had before renovations.

Apart from adding stores, Hyundai also built entertainment facilities and resting places for families, including a 1,000 square-meter outdoor garden attached to the eighth floor. Other amenities include a cafe that sells healthy food and a kids cafe which serves coffee for parents and includes an indoor playground for kids.

The company also added in a statement that the focus on children was based on Gangdong District’s demographic outlook, as it is expected to be one of the fastest growing neighborhoods in Seoul over the next five years, boosted by a redevelopment plan currently underway.

Hyundai is not the only major retailer that is building facilities and marketing to kids and their parents.

Shinsegae opened its third Starfield mall in Goyang, Gyeonggi in August. Since opening its first branch in Hanam, Gyeonggi, in 2016, Starfield locations have included sports and entertainment facilities in its locations. But the Goyang branch is even more focused on attractions for children, including an 6,000-square-meter toy store and a larger recreational sports venue for families.

Like Cheonho, Goyang is also a neighborhood filled with apartment complexes and families with young children. Although Shinsegae does not measure family visitors, it said the Goyang branch itself attracts 100,000 visitors during the weekends. This is a double the numbers it sees during the week. Lotte’s Premium Outlet in Icheon, Gyeonggi, also finished a large-scale renovation in April last year to fill three floors dedicated to children and baby goods.

Experts say the direction shift of major brick-and-mortar stores from shopping facilities to recreational areas for families is a move for retailers to stay afloat at a time when e-commerce is growing quickly.

Data from the Ministry of Trade, Industry and Energy last month showed that online retailers’ sales for November rose 16.7 percent year on year whereas the increase rate for offline stores was a mere 5.4 percent.

With more people shopping from home thanks to the internet and smartphones, brick-and-mortar retailers must offer them a rich selection of recreation and entertainment facilities that will attract parents looking for places to go with their kids, and retailers hope that this means they will spend money as well.

“Major retailers no longer compete with each other; their new rivals are amusement parks,” said Suh Yong-gu, professor of business management at Sookmyung Women’s University.

“More department stores seem to acknowledge that building children’s attractions near housing areas can be a good business opportunity.”

Suh added that large-scale brick-and-mortar outlets are slowly shifting towards creating stores specialized in a particular product category or drawing specific types of consumers, like kids, instead of providing a little bit of everything, as department stores have done in the past.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]