Department stores target the young and the rich
Forget about jostling unceremoniously through packed aisles with "promohawkers" yelling at you to try a sample of meat or chocolate off of a toothpick. For the lucky few, shopping is all about private suites, cocktail parties overlooking the Han and private shoppers at your beck and call.
You only have to be young, and rich.
Department stores have found that this demographic is important for both growth and absolute sales, and they are doing everything to get people fitting this description to spend freely at their establishments.
Lotte Department store tracks these VIPs. It says that total sales generated from such customers grew on-year by 24 percent in 2018. In 2019, growth was 44 percent.
In 2018, 44 percent of shoppers of luxury goods were under the age of 40. The ratio has increased to 46 percent a year later, and 47.9 percent in 2020.
Lotte Department Store this year threw a private party with 50 of these customers, half the normal number of guests the department store would invite for the event held twice every year.
During the two-day event, which ran from Oct. 23 to 24, the guests were given a number of extravagant freebies: a 750,000 ($660) won a night premium hotel suite with a view of the Han River, a full-course dinner and a grand breakfast served by the hotel the next morning.
Due to Covid-19 concerns, the department store shifted its private fashion show online, and guests could access it in their hotel rooms through an iPad provided by Lotte. Customers who’ve made a reservation prior to the event could have their selection of clothing delivered via room service to try on and purchase without having to leave their room.
Lotte Department Store also rented out the top floor of Lotte Tower to hold a cocktail party, where VIPs are able to examine, try on, and purchase exclusive designer-brand jewelry.
Compared to the event’s size, its impact on sales was massive. Even before the event started, Lotte Department Store said it achieved 800-million-won sales, as guests went on a shopping spree to prepare clothes and accessories that match the event's theme of black and gold.
At the cocktail party, one woman in her early 30s purchased a diamond necklace priced at 65 million won. The average age of customers present at the event was 34. The gender ratio was even. Most of them manage their own businesses and live in Seoul and the capital area. The top three big shoppers, however, were from Daegu.
Lotte may not be alone in being creative with VIP treatment.
Hyundai Department Store said it started adding cultural events for young “Jasmine Club” members, customers who purchase more than 40 million won at the department store every year.
The department store said it reserved an Italian restaurant located in the posh neighborhood of Shinsa-dong, Gangnam District of southern Seoul, in June for a private cooking class for its women VIPs. It also held a build-your-own leather bag class at a craft shop in Itaewon, central Seoul.
In the case of Shinsegae’s Galleria Department store, the retailer held a tasting event for exclusive alcohol brands at its VIP lounge. In a bid to connect with more rich millennials, Galleria recently uploaded a video on its social media platform of a performer dancing to the music with a Rolex watch on his wrists, and 7-million-won limited Nike sneakers on his feet.
“Due to the pandemic, we prepared a special event for the VIPs with extra digital elements. It received positive feedback from the guests” said Kim Hae-ran, a manager at Lotte Department Store.
“We will continue to come up with unique VIP events for the young generation.”
BY CHU IN-YOUNG, KANG JAE-EUN [firstname.lastname@example.org]
More in Industry
Contract signed for Covid-19 vaccine
Teas the season
Empty Chairs at Empty Table
Is China's post-Thaad ban on Korean games finally over?
Local fast fashion booms as Uniqlo tanks, pandemic hits