DEPARTMENT STORE currently , Baker predicts about 10 per cent will close over the coming five to 10 years , reflecting the large schism that has developed in performance between the flagships in the ‘ magnet areas ’ and the regional stores , some of which will need to be closed .
Meanwhile , in South Korea The challenges facing department stores in Japan are not unique . Much has been reported over the past few decades about US chains reinventing themselves , merging and shedding underperforming stores in a bid to keep up with consumer preferences for stand-alone branded boutiques – and online shopping .
In South Korea , as in Japan , operators are responding by focusing on experiential retail offerings , highnet-worth individuals – and attracting younger generations of consumers , especially those from the Millennial and Gen Z generations , born between the early 1980s and early 2000s .
For example , as Ashley Song of The Korea Bizwire reported in July , at the Lotte Department Store in Jamsil , Seoul , global audio brands Geneva and JBL Luxury have opened dedicated listening rooms in the 10th-floor audio section . Here , shoppers can experience high-end sound systems in home-like environments .
Broadly speaking , Korean stores are strengthening their Food & Beverage offer and stalking breakthrough fashion labels that cater to customers in their teens and 20s through online channels , offering them a physical retail platform . Those brands include Emis , where shoppers queued for more than 90 minutes before its store opened at Shinsegae Department Store in Gangnam , Seoul . Its signature hats sold out on the first day .
Lotte Department Store ’ s main branch in Seoul is undergoing its most extensive renovation since it opened in 1979 , Song reports . An old-style men ’ s fashion area is being transformed into a more spacious home for international menswear labels with fewer brands afforded larger display areas , creating a more relaxed , spacious shopping environment .
Lotte World is now home to a 500sqm tennis equipment store , complete with an actual tennis court .
“ Experiential stores are a competitive
The department stores can no longer rely on those traditional customers because , well , that creature is dying out .
advantage that can ’ t be replicated online ,” a Lotte spokesperson told The Korea Bizwire . “ We expect to see more of these hybrid spaces combining products and experiences in the future .” The strategies seem to be working . Shinsegae Department Store in Gangnam created a dedicated space for young fashion brands it dubbed New Street , which opened last September and features on-trend domestic brands like Wooalong and Birthdaysuit , which are marking their department store debuts . During the first three months of New Street trading , 84 per cent of visitors were new customers for Shinsegae .
“ By renovating our young fashion sections and introducing numerous K-fashion brands , we ’ ve successfully attracted young fashion demand that had been concentrated online for years ,” said a Shinsegae spokesperson .
“ This has helped us secure future customers by bringing in younger generations who previously didn ’ t visit department stores .”
Robert Stockdill , Global Head of News at Inside Retail , has been writing about the retail industry across multiple international markets for 30 years .
August 2024 www . insideretail . asia 35