Lotte Jamsil Branch Nears Annual Sales of '3 Trillion'... Department Store Trio Breaks Recession to Join 'N Trillion Club'

Lotte, Shinsegae, Hyundai Department Store 11 Branches Over 1 Trillion Won
Lotte Jamsil Branch, Shinsegae Gangnam Branch Reach 3 Trillion Won
Shinsegae Centum City and Lotte Main Branch 2 Trillion Won for 2 Consecutive Years
Strategies Expanding Shopping Experience for Young Generation and Foreigners Prove Effective

Despite the distribution industry struggling due to the domestic demand slump, 11 stores of the three major department stores have maintained their membership in the 'annual sales trillion-won club,' considered a benchmark for success this year. It is evaluated that expanding the shopping experience targeting premium customers (VIPs) and foreign tourists visiting Seoul and major cities was effective.

Exterior view of Shinsegae Department Store Gangnam Branch. Provided by Shinsegae Department Store

According to the industry on the 24th, among all stores of the three department stores?Lotte, Shinsegae, and Hyundai?Shinsegae Department Store Gangnam Branch and Lotte Department Store Jamsil Branch are expected to exceed 3 trillion won in annual sales. Shinsegae Department Store Gangnam Branch already surpassed 3 trillion won in cumulative sales as of the 28th of last month. This is about three weeks faster than last year when it first entered the '3 trillion club' among domestic department stores. Lotte Department Store Jamsil Branch, after entering the 2 trillion won annual sales range for the first time in 2022, is highly likely to open the 3 trillion won era in two years. This is 36 years since its opening in 1988.

These stores expanded related content such as attractions, food, and entertainment to enhance the shopping experience for various customers, which led to increased sales. Shinsegae Department Store Gangnam Branch launched new spaces sequentially, including the dessert specialty area Sweet Park (February) and House of Shinsegae (June), as part of a full renovation project of the food hall this year. The company explained that related sales naturally linked to other genre shopping after using these two spaces accounted for 70%, boosting sales. The proportion of foreign visitors in their 20s and 30s also increased, with foreign sales at this store rising by more than 310% compared to the same period last year.

Lotte Department Store Jamsil Branch held about 350 pop-up store events as of last month, attracting the MZ generation (Millennials + Generation Z) to offline stores. This is 1.5 times more than the 200 pop-up events held last year. Additionally, considering the convenience of foreign visitors, it introduced an AI service that provides real-time interpretation in 13 languages, the first in the distribution industry.

Lotte Department Store Main Branch. Provided by Lotte Department Store

Lotte and Shinsegae Department Stores each maintain a competitive stance with one store having annual sales exceeding 2 trillion won. Lotte’s main store in Sogong-dong, Jung-gu, Seoul, and Shinsegae Department Store Centum City Branch in Busan both recorded annual sales in the 2 trillion won range for two consecutive years, including last year. Among them, Shinsegae Department Store Centum City Branch was the first store outside Seoul to consecutively achieve sales exceeding 2 trillion won. Shinsegae Department Store analyzed that the creation of new fashion specialty halls targeting customers in their 20s and 30s, such as 'Hyperground' and 'New Contemporary Specialty Hall,' and a major revamp of the store composition with K-fashion and beauty brands were effective.

Hyperground and New Contemporary Hall are spaces that gathered promising K-fashion brands, including domestic emerging brands like 'Pottery' and 'Imis,' which previously sold products only online, opening their first department store locations. These spaces have received positive responses from domestic and international customers, with Hyperground’s sales increasing by 49% and New Contemporary Hall’s by 23.3% from January to the 21st of this year compared to the same period last year.

These stores plan to continue their growth next year by diversifying new brands and entertainment options. Starting with the 'Sports Shoe Specialty Hall' opened on the 20th, new F&B (food and beverage) stores and entertainment spaces such as 'Fun City' and 'Play in the Box,' which offer experiences, leisure, and relaxation, will be introduced in the first half of next year. Additionally, foreign shopping convenience will be improved by enabling immediate tax refund procedures at 80 stores, mainly domestic brands like Tamburins and Gentle Monster.

Furthermore, premium competitiveness will be strengthened by improving and expanding VIP facilities and increasing luxury brands. Notably, in the first half of next year, the VIP lounge 'Upper House' (for customers who purchased over 120 million won the previous year), currently only available at the Gangnam branch, will be newly established. A full-scale renovation to expand existing VIP lounges and personal shopping rooms (PSR) is also planned within the next three years.

Stores with annual sales exceeding 1 trillion won are expected to be four at Hyundai Department Store (The Hyundai Seoul, Apgujeong Main Store, Trade Center Branch, Pangyo Branch), two at Shinsegae Department Store (Main Store, Daegu Branch), and one at Lotte Department Store (Busan Main Store).

At Hyundai Department Store The Hyundai Seoul in Yeouido, Seoul, a Christmas-themed village called 'H Village' has been set up, where customers are exploring the village. Photo by Jo Yongjun

Among these, the most outstanding growth store is The Hyundai Seoul, which Hyundai Department Store positions as a landmark in Yeouido, Seoul. Opened in 2021, this store surpassed 1 trillion won in annual sales on December 2nd last year, just 2 years and 9 months after opening?the shortest period among domestic department stores. This year, overall indicators have exceeded last year’s performance. As of February, The Hyundai Seoul’s sales proportion from customers in their 20s and 30s increased by 58% compared to the same period last year, and foreign sales proportion rose by 14.6% from January to September this year compared to the same period last year.

The strategy of expanding experiential spaces that attract visitors’ attention was effective. About 40 brands that previously sold only online and global luxury brands were introduced, and 320 pop-up stores collaborating with popular animations, movies, and dramas were held until the third quarter. A Hyundai Department Store official said, "Unlike the global weakening of offline retail, MZ generation flocking to The Hyundai Seoul has attracted overseas companies interested in benchmarking the store’s operational know-how."