From Where Mom Goes to the 'MZ' Playground... The Transformation of Department Stores

Shinsegae Yeongdeungpo Attracts Popular Snack Restaurants
Uijeongbu Branch Retains Apartment Style... Strengthens Living Showroom
Lotte Yeongdeungpo Breaks Tradition with 1st Floor Young Casual and Food Hall

Shinsegae Yeongdeungpo Store Food Hall View.

[Asia Economy Reporters Minyoung Cha and Seungjin Lee] Department stores are shedding the perception that "department stores are old-fashioned" and are transforming themselves to target the potential customer base of the MZ generation (a combination of Millennials and Generation Z). They are boldly reforming offline merchandise planning (MD) and engaging in intense behind-the-scenes battles to secure customers through new and dazzling performances that surpass industry norms.

◆ Tteokbokki and Model Houses in Department Stores = Around 4 p.m. on the 27th of last month, we visited Shinsegae Department Store Yeongdeungpo branch. That day marked the completion of the last phase of a renewal project that had been ongoing since the second half of last year, including the renovation of the fashion building’s basement food court and the overseas fashion section. The food court on the basement level 1 of the fashion building was bustling with people despite it being a weekday afternoon, possibly thanks to shorter working hours.

Considering the area's characteristics with a large young population in their 10s and 30s, the curated selection of popular eateries proved effective. "Hongmidan," a famous tteokbokki restaurant from Bangbae-dong, opened its second branch?the first branch outside its original location?at Shinsegae Yeongdeungpo that day, and Seoul Hotteok also made its debut in a department store. Simply BBQ, Yoon’s Kitchen, Dogawon, Songuri Chicken Factory, and Kimi Gimbap all made their first appearances in Shinsegae Department Store.

Middle school student Jiyeon Kim (alias) and two others said, "We came over after looking at clothes at Times Square, and the prices here are not too expensive for department store food, which is nice. Today, we bought tteokbokki, green tea cone ice cream, and dumplings."

Despite the major setback caused by the COVID-19 pandemic, the effects of the first renewal in 10 years are visible. An employee from Hongmidan’s main branch said with a smile, "Today is the first day of opening, and although sales are not yet at the level of the main branch, we were very worried, so we are very grateful for every single customer."

Shinsegae Uijeongbu Branch 'Style Living' view.

On the 31st of last month, the first 'Style Living' showroom opened on the 8th floor lifestyle section of Shinsegae Department Store Uijeongbu branch. It is the industry's first to replicate a 95㎡ (about 29 pyeong) apartment interior exactly inside the store. Like a model house, the apartment interior is recreated to sell furniture and home appliances. The goal is to serve as a literal "guidebook" for customers, such as newlyweds, who are preparing to move and are struggling with interior design decisions.

Among the customers passing by the Style Living store that day, young couples showed great interest. Jihoon Lee (alias), a man in his 30s who visited the store with his girlfriend, said, "We are looking for a newlywed home ahead of our year-end wedding, but aside from the house price, I had no idea about the interior costs. Visiting here was very helpful, and it was fun as it felt like touring someone else’s home." Style Living is expected to expand not only to new stores but also to renewed stores in the future.

IKEA Planning Studio New York.

◆ An Entire Floor for IKEA... 'Bold Move' = Hyundai Department Store focused on strengthening the 'luxury living' concept. At the end of this month, in collaboration with the Swedish home furnishing brand IKEA, they will introduce the first "urban store" in Korea. On the 30th of this month, Hyundai Department Store Cheonho branch will open the "IKEA Planning Studio Cheonho" on the 9th floor living section.

This small-scale urban store will feature about 400 products. Customers can also receive space consulting services from home furnishing experts for bedrooms, living rooms, kitchens, and more. Expansion to major stores following Cheonho branch is also under consideration. The 'Samsung Premium Store,' first introduced in the department store industry in 2018, is also performing well in sales at Mokdong, Pangyo, Kintex, Sinchon, and Mia branches. The home appliance sales growth rate at these five stores last year increased by more than 20% compared to 2018.

In the case of Lotte Department Store Yeongdeungpo branch, the focus is on attracting MZ generation customers, and renewal construction will begin next month. The first floor of the department store will be designed with a one-way flow similar to a shopping mall to actively attract young customers. This is an unprecedented attempt for a domestic department store. Instead of placing traditional luxury cosmetic brands on the first floor, the space will be composed of a food court and young casual and fashion sections reflecting the preferences of customers in their 20s and 30s. The upper floors will also expand overseas fashion and contemporary clothing, and a large-scale sports outdoor megastore will be introduced.

An industry insider said, "VIP sales are important for department stores, but due to COVID-19, there has been a tendency for these to decrease, so various strategies are emerging to compensate for this. It is truly a time of great concern for department stores, and everyone seems to be desperately devising change strategies to survive."

This content was produced with the assistance of AI translation services.