Department Stores Launch Multi-Million Won Gift Sets for Holidays
Premium Competition Tool...Enhancing Marketing Effectiveness
Every year during the holidays, department stores showcase gift sets ranging from tens of millions to hundreds of millions of won. Unlike other holiday products, these are neither produced in large quantities nor sold out immediately, but department stores are not significantly concerned if they don't sell well. Ultra-high-end holiday products are considered a means of premium competition among department stores. It is good if they sell, but even if not, the marketing effect is certain. Most of these are alcoholic beverages with long shelf lives, so inventory burden is low.
This year as well, department stores filled their ultra-high-end product lines with rare alcoholic beverages that are hard to find. Among major department stores (Shinsegae, Lotte, Hyundai, Galleria), Shinsegae sold the single malt whiskey ‘Bowmore 40 Years’ and the champagne ‘Krug Clos d'Ambonnay’ for 27 million won and 16 million won respectively. The Bowmore 40-year-old was introduced for the first time along with the ‘Bowmore 50 Years’ (105 million won), considering the single malt whiskey craze. Popular whiskeys introduced last Chuseok, such as ‘Balvenie (37 million won)’ and ‘Macallan M Decanter (11 million won)’, did not lead to sales, but this year they sold out early. As the last weekend to prepare holiday gifts approaches, premium product sales at other department stores have not yet occurred.
Products priced well over 10 million won target a select group of consumers often referred to as ‘another class’ (wealthy individuals). Rather than being intended as gifts for others, these products are more frequently purchased for personal satisfaction due to their rarity. This is independent of the uncertain economic climate. Ultimately, the fact that these products sold quickly this year indicates that department stores accurately met the needs of certain consumers. A retail industry insider explained, “For them, rarity is more important than price,” adding, “Buyers also strive every year to source products that can attract attention.” Last year, at Galleria Department Store, the wine ‘Roman?e-Conti 2014 (59.4 million won)’, famously nicknamed ‘Drops of God’, and the ‘Louis XIII Zero Boam (41.8 million won)’, of which only 100 bottles are distributed worldwide, were sold.
Beyond sales, department stores can differentiate themselves from competitors simply by securing rare alcoholic beverages priced in the tens or hundreds of millions of won. Since department stores target middle-class and above consumers, imprinting a premium image is paramount. This is also linked to the department store’s product sourcing capabilities. It builds the image that while other department stores cannot obtain these products, we can. This year, Shinsegae established the largest premium product lineup compared to other department stores. It is said that, for the first time among domestic distributors, buyers and sommeliers directly participated in auctions, making intense efforts to source products.
Meanwhile, this year Lotte Department Store introduced the ‘Ch?teau P?trus Vertical’ (18 bottles from vintages 2001 to 2018), a premium Bordeaux wine set, priced at 329 million won. The French representative wine ‘Ch?teau Mouton Rothschild 2000 & 2019’, a combination of vintages, was prepared at 11.25 million won. Hyundai Department Store offered ‘Balvenie 30 Years’ (6.4 million won), and Galleria featured products such as ‘Tesseron Cognac Cuv?e Extreme (27 million won)’ and the wine set ‘Coche-Dury Meursault Set (7 million won)’. Additionally, Shinsegae prepared the 50-year aged Chinese liquor ‘Guizhou Maotai (13 million won)’, Macallan’s premium line ‘M Copper (16.5 million won)’, ‘M Decanter (11 million won)’, ‘M Decanter Black (15.6 million won)’, and the wine ‘Domaine de la Roman?e-Conti (75 million won)’, among others.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
