Luxury goods carry department stores through pandemic

In April 2022, Kim Sun-young, a resident of Cheonan, South Chungcheong, goes shopping with her family. Kim takes a Super Rapid Train (SRT) to go a department store that is about 60 kilometers away from her home. It only takes 18 minutes.

A bird's-eye view of Lotte Department Store’s Dongtan branch in Gyeonggi, which is scheduled to newly open in June. [LOTTE SHOPPING]

In April 2022, Kim Sun-young, a resident of Cheonan, South Chungcheong, goes shopping with her family. Kim takes a Super Rapid Train (SRT) to go a department store that is about 60 kilometers (37 miles) away from her home. It only takes 18 minutes.

Kim doesn’t hesitate to go such a long way after she heard the news that a new product from one of her favorite luxury brands was released at the department store. While she enjoys shopping, her husband spends time reading comics at a comics shop and her child plays at a kids’ cafe.

Kim’s family then has a nice late brunch at a premium French brunch restaurant. Everything was done inside a department store.

This is the future of department stores. Comfortable transportation will allow customers to visit locations that are far away from their homes to purchase luxury products they want. Customers will expect more from department stores than just shopping, so that their families can spend enjoyable time while they shop.

The pandemic has conditioned the marketing departments.

Department stores were hit hard by the coronavirus pandemic, but some reported increases in sales, with luxury product sales helping.

According to the retail industry, sales at most of the 60 department stores across the country were down at least double-digits last year due to the coronavirus pandemic. But at nine locations, sales may have actually increased: Five Shinsegae Department Store branches, two Hyundai Department Store branches, Lotte Department Store and Galleria Department Store.

Sales at Hyundai Department Store’s Pangyo branch in Gyeonggi increased by 9.4 percent last year compared to a year earlier, while sales at Galleria Department Store’s Luxury Hall in Apgujeong-dong, southern Seoul, rose by 8.5 percent.

Sales at Shinsegae Department Store’s Centum City branch in Busan increased by 7.5 percent, while sales of Gangnam branch in southern Seoul were up by 5.5 percent. Sales at Hyundai Department Store’s main branch in southern Seoul rose by 3.5 percent, Shinsegae's Gwangju branch by 3.3 percent and Shinsegae's Time Square branch in western Seoul by 3.2 percent.

Sales at Lotte Department Store’s Incheon Terminal branch rose by 1.8 percent, while sales of Shinsegae’s main branch in Jung District, central Seoul, increased by 0.5 percent.

Luxury products led.

Hyundai Department Store’s Pangyo branch has nearly 100 luxury brands. Sales at Galleria Department Store was helped by the sale of luxury men's clothing brands and luxury jewelry and watch brands.

The sale of luxury products at Shinsegae Department Store’s Gangnam branch are about fourfold compared to other branches.

Location was another most important factor that boosted the sales.

Sales of department stores located near terminals and subway stations were higher than others as more customers these days visit from different districts and even cities by bus and subway.

Shinsegae Department Store’s Gwangju branch — the only branch in the city to report a rise in sales — is connected to Gwangju Bus Terminal.

Lotte Department Store’s Incheon Terminal branch was also the only Lotte Department Store branch reporting an increase in sales among all other branches of the department store.

Shinsegae Department Store’s Gangnam branch and Time Square branches are also connected to subway stations.

Uniqueness of the department stores was also important.

Shinsegae Department Store’s Centum City branch has a Jurassic Park attraction inside of its building. The park was designed with dinosaur statues and a merry-go-round.

The department store also has KidZania — a theme park offering some 120 vocational facilities with more than 100 different tasks — that allows children to gain work experience.

Shinsegae Department Store's Time Square branch made its first floor entirely into a food court — a first in the department store industry. Most department stores place luxury brand stores on the first floor.

Lotte Department Store’s Dongtan branch in Gyeonggi, which is scheduled to open in June, is connected to Dongtan station. Besides small and big stores, the department store will have a big library, culture center and a terrace inside the building. The terrace will include a garden and a kind of amusement park targeting customers who visit with their children.

Shinsegae Department Store’s Expo branch in Daejeon, which is scheduled to open in August, will have an art gallery with more than 120 paintings and other pieces of art, as well as indoor sports facilities that allow people to experience climbing and screen baseball.

“Despite the coronavirus pandemic, luxury products have been popular as more Koreans who were not allowed to travel overseas have been splurging on luxury goods instead,” said Lee Eun-hee, a social science professor at Inha University. “Department stores will now be shifted to a showroom-style place that offers customers various attractions and diverse experience.”

BY CHU IN-YOUNG [chea.sarah@joongang.co.kr]