Shinsegae Gangnam’s milestone sales attributed to VIP lounges

The Upper House Lounge [Courtesy of Shinsegae]

Shinsegae Department Store’s Gangnam branch in southern Seoul, the first in South Korea’s department store history to exceed 3 trillion won ($2.3 billion) in sales last year, owes much of its success to its distinctive VIP lounges.

Unlike other department stores that typically house two to three VIP lounges, Shinsegae Gangnam boasts 8 lounges, each tailored to different customer tiers. This diversity in lounge spaces has significantly heightened customer loyalty, with many hoping to maintain VIP status or access higher-tier lounges.

The Upper House, located between the 1st and 2nd floors of Shinsegae Gangnam, is for a diverse clientele ranging from individuals in their 30s to those in their 60s engaging in casual conversations. But access to the place is restricted solely to VVIP customers who annually spend over 100 million won at the department store. Complimentary snacks, beverages, and, upon reservation at a fee, even hotel-level afternoon tea services are offered.

“The Upper House allows VVIP customers to invite friends, enjoy light brunches, and relax in an ambiance resembling first-class flights for up to 3 hours while watching videos,” said Lee Hye-jeong, the store’s customer service director.

Eligible customers are allowed a maximum of 4 visits per month.

The Trinity Lounge on the 3rd floor is exclusively accessible to Trinity-tier customers, numbering the top 999 individuals with annual spending reaching hundreds of millions of won.

The 7th and 10th floors host the First Lounge, reserved for Platinum-tier (annual spending between 40-60 million won) and Diamond-tier (annual spending exceeding 60 million won) customers, respectively.

The Member’s Lounge for Gold-tier customers (annual spending between 20-40 million won) is available on the basement 1st floor and at locations on the 5th, 7th, and 10th floors.

The newly opened 10th-floor First Lounge in 2022 offers a unique experience with natural lighting, a rare sight in department stores.

The distinctive operation of VIP lounges at Shinsegae Gangnam translates into increased sales.

VIP customer sales contribute to 50 percent of the total, surpassing the 30 percent mark seen in other stores. Customers using the lounges at Shinsegae Gangnam store visit 48 percent more frequently and stay 30 percent longer compared to non-lounge users. The average spending per customer using the lounges is also 30 percent higher than those who don’t.