Why Luxury Goods, Electronics, and Jewelry Sell Well Despite Department Store Performance Slump

Department Stores See Increased Sales in Overseas Jewelry, Watches, and Home Appliances and Furniture
Demand from Newlyweds Buying Household Goods Despite Postponed Weddings

[Asia Economy Reporter Lim Hye-seon] Amid sluggish department store performance this year due to the impact of the novel coronavirus infection (COVID-19), luxury brand stores are crowded with people eager to make purchases, and sales of wedding-related products such as jewelry, watches, and home appliances and furniture are holding up well. This is thanks to newlyweds who postponed their weddings but still purchased wedding items. It reflects a typical pattern of revenge spending. Sales from department store wedding membership subscribers have nearly doubled compared to the same period last year.

According to the department store industry on the 14th, Lotte Department Store saw sales of overseas jewelry and watches, including Cartier, and home appliances and furniture increase by 28% and 29%, respectively, from May 1 to 11 compared to the same period last year. This is an encouraging figure compared to the overall department store sales, which remained at a similar level as before during this period. In April, while overall department store sales decreased by 12%, sales of luxury jewelry, watches, and home appliances and furniture increased by 38% and 15%, respectively. Shinsegae Department Store showed a similar trend, with jewelry, watches, and home appliance sales increasing by 24.5% and 14%, respectively. More than 4 out of 10 customers purchasing home appliances were in their 20s and 30s, indicating a high proportion of engaged couples preparing for marriage.

Sales and the number of customers subscribing to department store wedding memberships surged. The wedding membership program sums up purchases made from nine months before the wedding and offers benefits such as gift certificates based on the amount spent. At Lotte Department Store, during the promotion period from April 3 to 19, new wedding membership sign-ups reached 3,300, a 225% increase compared to the same period last year. The department store expected wedding customer sales to reach around 10 billion KRW during this period. The results exceeded expectations, with wedding customer sales surpassing 32 billion KRW, achieving more than 310% of the target. Earlier, during the February promotion period, new wedding membership sign-ups numbered 3,550, 131% (2,010 people) above the target. Sales also increased by 10.3 billion KRW from the previous year, reaching 25 billion KRW. Last year, the top wedding membership sales at Lotte Department Store were dominated by home appliances from Samsung Electronics and LG Electronics, and high-end overseas jewelry brands such as Bulgari, Tiffany, and Cartier. Hyundai Department Store also saw a 14% increase in wedding membership-related sales this year.

A department store official explained, "Due to the COVID-19 situation, engaged couples who had planned weddings this spring postponed their ceremonies but are purchasing wedding items as scheduled. Since wedding members receive discount benefits limited to nine months, there are fewer cases of purchase delays despite the COVID-19 issue, which is one of the reasons for the sales increase."

Meanwhile, according to Statistics Korea, the number of marriages in January and February was 38,927, slightly down compared to the same period last year. The number of marriages in March and April is expected to have decreased further. A representative from Duo Wedding stated, "More than 60% of weddings scheduled for March and April were postponed to after August."