New Customer Tier Targeting MZ Generation Established
Offering Discount Coupons and Valet Parking Benefits
[Asia Economy Reporter Jo In-kyung] Department store industry is targeting the 20s and 30s MZ generation by lowering the VIP membership criteria, which used to apply only to customers who purchase tens of millions of won annually, to several million won. This strategy aims to lower the VIP entry barrier so that customers visit department stores more frequently and to secure young customers with purchasing power who can potentially develop into VIPs in the future.
According to related industry sources on the 3rd, Galleria Department Store has expanded discount benefits for premium customers earlier this year and recently established a VIP program that selects premium customers every three months.
Earlier, in February, this department store added a new 'Jade+' grade to the existing premium customer system, which was operated with six grades, reorganizing it into a total of seven grades. The Jade grade, which targeted users spending 5 million to 20 million won annually, was subdivided, and customers who purchased 10 million to 20 million won annually were newly assigned to the Jade+ grade with a 10% discount benefit.
There was also a change in the premium customer criteria, which is usually based on the purchase amount over one year. The Jade grade is given to those who purchase 5 million to 10 million won annually, but if a customer purchases more than 3 million won within three months, they are granted the Jade grade for three months without having to wait until the following year.
In March, a VIP lounge exclusively for the Jade+ grade was also established. At Timeworld in Daejeon, a new 'Galleria Lounge' of about 420㎡ was created, offering a resting space with about 70 seats where beverages and desserts from the famous Daejeon bakery 'Harehare' are provided. At Galleria Gwanggyo in Gyeonggi-do, customers with the Jade grade and above can also use the VIP lounge.
Lotte Department Store Jamsil branch has been operating a paid membership club called 'Y Community' since March this year, which is only available to customers born after 1986. By paying a membership fee of 100,000 won, members can receive benefits similar to VIP status, such as department store discount coupons, free parking, and valet parking.
Hyundai Department Store also launched a 20s and 30s exclusive VIP membership called 'Club YP' for consumers born after 1983 who spent more than 30 million won with a Hyundai Department Store card in the previous year. Although the purchase amount criterion is somewhat high, members can use valet parking services and exclusive lounges at 13 stores nationwide, offering substantial benefits. They also provide differentiated services such as doubling the accumulation rate of 'H Points,' Hyundai Department Store’s integrated membership points, when purchasing luxury brand products.
Shinsegae Department Store has established a 'Red' grade that can be joined with an annual purchase amount of 4 million won. This lowers the VIP entry barrier for consumers in their 20s and 30s who may have weaker purchasing power now but could become major spenders in the future. Membership can also be granted based on quarterly purchase frequency and amount, in addition to annual purchases.
A department store industry official explained, "As consumption suppressed by COVID-19 revives, young generations in their 20s and 30s are showing great interest in luxury brands. To capture them as future core customers, each department store is competing to introduce specialized services."
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