"Catch the 2030"…A Department Store Getting Younger

On the 12th, customers are lining up in front of a luxury store at a department store in Jung-gu, Seoul, waiting for it to open. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Seungjin Lee] The department store industry is making every effort to capture the 2030 customer segment. As 2030 customers emerge as major players in the luxury market and their consumption increases, the department store industry has embarked on a major transformation.

According to the department store industry on the 11th, Hyundai Department Store Apgujeong Main Branch has decided to bring in a large number of luxury brands favored by the younger generation. This change was made as the main luxury consumer base shifted from middle-aged customers in their 40s and 50s to younger customers in their 20s and 30s.

In fact, in 2017, Hyundai Department Store's luxury sales proportion for customers in their 20s was 4.8%, and for those in their 30s was 17.4%, but last year these increased to 6.3% and 20.1%, respectively. Accordingly, starting this month, the Apgujeong Main Branch will extensively reorganize its 4th floor and basement 2nd floor stores to feature luxury brands preferred by the younger generation.

The 2030 customers' love for luxury goods is also evident in the 'Korea, Together Sale' event that started at the end of last month. Lotte Department Store's total sales from the 26th to the 28th of last month increased by 16% compared to the same sale period last year. Among these, overseas luxury sales surged by 78%. A department store official said, "We believe that young customers in their 20s and 30s, who could not travel abroad, increased their spending on luxury goods as a form of compensatory consumption," adding, "The purchase proportion of customers in their 20s and 30s accounted for more than 60% of the total."

In response, the department store industry has begun transforming to attract 2030 customers. Considering that the proportion of customers in their 20s is high at Shinsegae Times Square, a young fashion specialty zone was introduced in March. While the average proportion of customers in their 20s at Shinsegae Department Store last year was 11%, Times Square recorded 13.2%, about 2.2 percentage points higher than the average.

The young fashion specialty zone gathered 33 brands favored by young customers, including sports, street fashion, and accessories, creating 'one large curated shop.' Additionally, the food court was filled with popular eateries and famous brands, and a 660-pyeong (approx. 2,180 sqm) overseas fashion specialty zone featuring renowned brands such as Alexander Wang and Vivienne Westwood was newly introduced.

I'Park Mall has launched 'pick 6,' a space where fashion and popular eateries blend together, to capture the 2030 segment. 'pick 6' is an open-themed space that breaks down store boundaries, located in The Center connecting the Fashion Park and Living Park on the 6th floor. It targets the trend-sensitive MZ generation by featuring everything from popular eateries to fashion lifestyle content.

The representative snack content of 'pick 6' includes 'Hongmidan,' famous for its tteokbokki in Bangbae-dong, 'Antienne's,' known for pretzels, and 'I Donut Care X Opoutine,' a fusion of Itaewon eateries?all considered must-visit spots for social network service (SNS) certification courses recently.

Lotte Department Store exclusively launched the cosmetics brand 'Your Brand,' created with influencers, through its online mall 'Lotte On.' Lotte Department Store introduced Your Brand because, although the domestic cosmetics market continues to grow steadily, department store sales have stagnated. As young customers flock to health & beauty (H&B) stores or online, Lotte Department Store's cosmetics sales have decreased by 40% compared to five years ago as of last year.

Your Brand plans to release a new influencer brand every month and aims to launch about 20 brands this year. Starting with Lotte On, the products will be simultaneously introduced both online and offline in April at On & The Beauty in Jamsil and Young Plaza at the main branch.