With E-commerce Soaring... Large Marts Transform into 'Complex Cultural Spaces'

March Offline Sales Decline in Large Marts and SSM
Seeking New Paths with 'Complex Cultural Spaces' Amid E-commerce Competition

As consumer trends have shifted from offline to e-commerce-centered shopping since COVID-19, major large-scale marts are seeking new opportunities by transforming their offline stores into 'complex cultural spaces.' This strategy is interpreted as an effort to provide differentiated experiences from e-commerce by renewing stores, which were previously focused on sales, into various experiential spaces for customers.

Families are roller skating at Homeplus Yeongdeungpo's "Gogoland," which opened last January. [Photo by Homeplus]

According to the sales trend of major distribution companies in March 2023 announced by the Ministry of Trade, Industry and Energy on the 1st, the sales growth rates of major distribution channels showed mixed results last month. Department stores and convenience stores continued their high growth, rising 9.5% and 9.7% respectively compared to the same period last year, while large marts showed relatively sluggish performance with a 1.2% increase. In particular, SSMs (Super Supermarkets) experienced a decline of 1.0% compared to the same period last year, showing negative growth.

The background of these results was influenced by changing consumer trends. Since COVID-19, the proportion of fresh food and daily necessities purchased through e-commerce has significantly increased, reducing foot traffic to large marts. Unlike department stores, which have a high sales proportion of clothing and accessories where trying on is important, large marts mainly handling fresh food and daily necessities were more immediately affected by the changed consumer trends.

Major large marts such as Emart, Homeplus, and Lotte Mart are focusing on transforming their offline stores into complex cultural spaces that include various experiential contents as well as sales. Emart officially closed its Seongsu branch on the 25th of last month and began preparations to reopen it as 'The Town Mall,' a future-oriented store. The Town Mall is a complex cultural space promoted by Emart that includes experiential contents such as an indoor smart farm and the SSG Landers Plaza, as well as sales. Starting with the Wolgye branch in 2020, Emart renewed its Yeonsu branch into The Town Mall last month. Emart plans to reorganize about 10 more stores within this year.

Homeplus has also made a fresh start as a family outing space by creating 'kids experience zones' in major offline stores. Large kids cafes called Monster Park were opened at the Gayang and Masan branches, and the Angel Crew children's swimming pool was installed at the Incheon Nonhyeon branch. In January, the Yeongdeungpo branch opened Gogo Land roller skating rink, an experiential space for the whole family. Homeplus explained that customer responses have been positive, with sales in kids spaces increasing by 77% year-on-year over six months from August last year to February this year.

Lotte Mart also joined the competition by renewing and reopening 10 stores last year, including Gimpo Airport, Cheongna, and Bupyeong branches. They strengthened experiential content by setting up 'Tasting Tap,' a space where customers can sample various wines, and opening a mini futsal field on the store rooftop. Lotte Mart plans to continue expanding customer-centered experiential stores.

An Emart official said, "Offline stores focused solely on selling goods have limitations in competing with e-commerce. Therefore, we are focusing on creating offline stores as customer experience-centered spaces to increase customers' dwell time." He added, "In the future, offline stores will function as complex outing spaces combining sales with culture and entertainment."