Chanel defends unpopular store data collection policy

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Chanel defends unpopular store data collection policy

Published: 16 Jun. 2023, 16:54 Updated: 18 Jun. 2023, 15:32

Customers form a long, early morning line in front of a Chanel store at Shinsegae Department Store’s main branch in central Seoul even before the stores opens. [NEWS1]

Visitors to Chanel stores in Korea, whether they make a purchase or not, have to provide their personal data according to a KBS report Friday.

Chanel Korea is under fire as the practice is known to be limited to the country, although the company declined to confirm this.

Individuals hoping to gain entry into Chanel stores at department stores in Korea are required to provide personal information for themselves and their companions — including names, contact details, and date of birth — beforehand.

The French fashion and luxury company justifies this policy as a means to facilitate the smooth flow of visitors.

“The large number of visitors to our boutiques led us to set up a queue management system to help keep traffic flowing smoothly,” Chanel Korea told The Korea JoongAng Daily via a statement on Saturday. “We ask our clients and their companions to provide us with their name, if they are willing to, so that we can let them know when they can enter the boutique and offer them the best possible in-store experience by matching them with a dedicated fashion advisor.”

Although Chanel Korea stated that visitors who merely want to browse can enter stores without providing this information, customers have had a different experience, with those unwilling to provide personal information being banned from entry.

Unlike Chanel, other luxury brands do not request any personal information other than name and phone number, making Chanel an exception in collecting such data.

The company clarified that the primary reason for age verification is to ensure compliance with Korean regulations, as individuals must be above 14 years old to be registered in the database without parental consent. The company emphasized that they keep the information for a year.

Chanel has enacted the "Boutique Experience Protection Policy" exclusively in Korea since July 2021, which involves identifying certain customers as "restricted sales customers" based on their purchasing history and behavior. These customers face restrictions on buying Chanel products and are also prohibited from visiting Chanel stores.

To gain entry into stores, consumers are required to register their personal information and show their ID cards when making a purchase.
Chanel Korea indirectly cited concerns about the infamous bulk buyers who resell the purchased products with markups as the reason behind this policy.

Although the company does not reveal the specific standards, restricted sales customers are believed to include individuals who exhibit unusually frequent store visits and make exceptionally large purchases, according to retail industry sources.

While some customers view this policy as a measure to curb reselling activities and support its implementation, others expressed dissatisfaction about the luxury brand’s bullying even as they spend millions to tens of millions of won.

"Despite being a foreigner without a Korean phone number or a KakaoTalk account, they insisted on obtaining my information, which upset me, so I just decided not to enter the store,” said an online user of their experience.

Another user said, "During a recent visit to Chanel in Korea for after-sales service, they asked my younger sibling who came with me to provide their information, so my sibling chose to wait outside."

Luxury brands like Chanel continue to thrive in Korea despite such practices.

Following a price increase in March, Chanel carried out its second price adjustment of the year on May 23. This latest change targeted popular products, including the Classic Flap Bag, which saw a price hike ranging from 5 to 6 percent. Chanel implemented a total of four price increases last year, making more increases likely.

Despite the hikes, consumer purchasing remained robust in Korea, leading to a revenue of 1.59 trillion won ($1.25 billion) in 2021, a 30 percent increase compared to the previous year.

“Chanel will seize this opportunity to see if all the elements constituting this policy are still relevant within the customer experience protection policy,” the company said.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]