The Hyundai Seoul targets the young and trendy as a picture playground

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The Hyundai Seoul targets the young and trendy as a picture playground

Published: 05 Feb. 2023, 14:01

Visitors pose for a selfie at The Hyundai Store in western Seoul on Jan. 17. [CHOI YOUNG-JAE]

The Hyundai Seoul, located near Yeouido Station in the western part of the capital, is being transformed into a playground for millennials and Gen Z — or so it seems.

After opening in February 2021, the department store's sales jumped by 43.3 percent in 2022 compared to the year before, according to local reports.

Daejeon Shinsegae Art & Science reportedly witnessed the highest sales jump among local department stores last year at 159.4 percent, with sales of 864.676 billion won ($73.56 million), followed by Lotte Department Store's Dongtan branch jumping 90 percent to 447.5 billion won. The Hyundai Seoul ranked third, with sales of 950.93 billion won.

Yet the success of The Hyundai Seoul's opening was met with skepticism as its location was a ways away from the main office district of Yeouido. It also does not have the three major designer brands — Hermes, Louis Vuitton and Chanel — which are often seen as a barometer that determines the value of a department store.

On the success of The Hyundai Seoul, “We believe it was largely because of our strategy to target the MZ generation,” an official from department store said, referring to the combined group of millennials and Gen Z.

Data released by The Hyundai Seoul showed that young people in their 20s and 30s accounted for 53.5 percent of the total customers as of February 2022.

Analysts gave out similar reasons.

Kim Nan-do, a consumer studies professor at Seoul National University, described The Hyundai Seoul’s strategy as “original and clear,” targeting the young adults in their 20s and 30s who have relatively weaker purchasing power.

Lee Soo-jin, researcher at Seoul National University's Consumer Trend Center, said, “The new formula is to narrow targets and broaden coverage [of customers].” In other words, the target group was limited to the MZ generation, while the scope of influence was expanded to national and global commercial districts.

"Such changes across the areas of communication, space and advertising led to an explosive success, shaking the trend in the retail industry,” Lee said.

The Hyundai Seoul overhauled the traditional formula in the retail market that prioritizes customers in their 40s and 50s from Apgujeong — considered one of the wealthiest neighborhoods in Korea — and putting forth the MZ generation as the main target customers.

Retailers are paying attention to the limits of warehouse stores that stack and sell large amounts of products usually for a family of four.

The shopping culture in which families put daily necessities and a week's worth of groceries in a cart at a large mart with a large parking lot does not interest the MZ generation when they can simply make an order online and receive it early the next morning. Rather than that, these "MZers" prefer a space where they can eat, drink, and enjoy and experience unique and new products that are difficult to encounter online. This is why they bother to visit cultural complexes like IKEA and Starfield instead of Emart and Costco, which would oftentimes be more within reach.

“With the MZ generation being set as the main target group, spaces created for play featuring fun visuals are rising as the new trend in the retail industry rather than large discount stores that aren’t much needed for those in their 20s and 30s which mostly consist of single-person households,” said Kim Min-jeong, professor of consumer economics at Sookmyung Women’s University.

Department stores are also transforming in line with the new trend, and the representative case is The Hyundai Seoul.

The most noticeable characteristic is the innovation of space.

"The MZ generation has an exceptionally strong desire for identity, so spatial innovation that makes them feel like themselves has become key," according to Prof. Kim Nan-do.

On Jan. 17, when the reporter visited The Hyundai Seoul, the ground floor that had been full of luxury brands was gone and replaced by a single, large pop-up store of the French luxury shoe brand Christian Louboutin. Christian Louboutin’s pop-up store, which was held for the first time in Asia, garnered 38,000 posts on Instagram under the hashtag #ChristianLouboutang.

An official from the brand confirmed about 11,000 people visited the pop-up store on Saturday alone, adding, “Our main customer age group is those in their 30s and 40s, while young people in their teens and 20s also come a lot to take pictures."

“Despite not being advertised, people somehow find out about the pop-up stores and come,” said researcher Lee. “For the MZ generation, the colorfulness and the limitedness of pop-up stores is an attracting factor to them, and posting about it on social media is how they communicate.”

In the early half of 2022 alone, The Hyundai Seoul opened some 150 pop-up stores. In particular, it boldly decided to empty the whole second basement floor and turn it into a large space dedicated to pop-up stores.

“Designer brands have a strong influence these days, so we're the underdog,” an official from a department store said. “But that means trend powerhouses are flowing in, and we believe it is a win-win strategy.”

According to The Hyundai Seoul, the MZ generation spent the most time in the department store’s first basement floor (23.1 percent). They spent the next most time in the second basement floor (15.4 percent), followed by the sixth floor (10.5 percent).

Experts believe that the new strategy is enough to lure in more customer groups, ultimately leading to department store sales.

Lee Eun-hee, a consumer studies professor at Inha University, said, “They targeted consumers who want to find a cool, hidden brand rather than a brand that everyone knows like Hermes, Louis Vuitton and Chanel.

“All consumers, including the MZ generation, have begun to value the offline experience that cannot be filled online, such as in the metaverse.”

BY SHIN SU-MIN [seo.jieun1@joongang.co.kr]