Department Stores Strengthen Subscription Models as Bakery Subscriptions Draw Crowds...

Shinsegae Department Store Menagerie Visitors Increase by 60%
Nationwide Expansion... 4 More Bakeries and 2 Cafes Join
Trial Operation of Coffee and Wine... Regular Side Dish Delivery Also Available

Shinsegae Department Store's 'Bread Subscription' Service

[Asia Economy Reporter Cha Min-young] Department stores are taking the lead in strengthening food subscription models. This is because inducing visits to department stores has a significant customer attraction effect that boosts overall sales in related food halls.

According to the industry on the 10th, Shinsegae Department Store is expanding its bakery monthly subscription model service from the existing Times Square branch to the main store, Gangnam branch, Centum City branch, Daegu branch, and Gwangju branch starting today. This is because the number of bakery subscribers at 'Menagerie' in the Times Square branch, which was piloted since January, increased by 60% compared to the opening period, confirming initial positive responses.

In addition to Menagerie, four other brands participate in Shinsegae Department Store's bread subscription service, along with two cafe brands. For example, if you purchase a monthly subscription ticket for 'Gentz Bakery' at Shinsegae Times Square, you can take one of five products daily, including the signature menu Mont Blanc, Baton Sucre, and Cranberry Bread. The average price of the five types of bread is 4,660 KRW, and the monthly subscription ticket costs 50,000 KRW. This corresponds to a 72% discount compared to the regular price.

Lotte Department Store has also been piloting bread, wine, and coffee subscription services at the Nowon branch since April. From the 1st of this month until the end of October, you can enjoy one crispy baguette weekly four times at 'Six Oven' bakery for 9,900 KRW. You can also receive three milk breads or tangjong breads for 9,900 KRW. Americano coffee is sold at 9,900 KRW for 10 cups and 40,000 KRW for 30 cups.

Some have adapted subscription marketing into delivery services targeting millennial couples. Hyundai Department Store is offering the 'Hyundai Food Hall Side Dish Regular Delivery Service' at 10 stores in the Gyeongin area, including the Apgujeong main store. Side dishes are delivered once a week for a month. Discounts range from 10% to 30%. They plan to increase the number of stores operating side dish regular delivery and expand delivery areas to large provincial cities such as Daegu and Ulsan.

The reason department stores are going all-in on subscription economy marketing is that it generates a customer attraction effect by bringing in new visitors daily. Additionally, customers can enjoy department store delicacies at relatively affordable prices, increasing customer utility. Department stores believe that visiting bakery stores can lead to increased overall sales in the food hall. Although regular delivery does not directly induce visits to the department store, it can increase loyal customers, thus enjoying the effect of expanding non-face-to-face (untact) customers.

Choi Won-jun, head of food at Shinsegae Department Store, said, "Shinsegae Department Store is the first in the industry to expand and introduce the bakery subscription model this time," adding, "We will lead trends through various content and provide customers with a safe shopping environment."