Pent-Up Consumer Spending Surge... Department Stores Aim to Capture the "Golden Holiday"

'Golden Holiday' Fashion & Beauty Massive Discounts
Lotte & Shinsegae Department Stores, All Cosmetic Brands Gather
Hyundai Department Store Hosts Men's Bespoke Fair
Critical Sales Rebound Amid COVID-19 Downturn

[Asia Economy Reporter Seungjin Lee] The department store industry is putting everything on the line during the golden holiday period from the 30th of this month to the 5th of next month. With the number of confirmed cases of the novel coronavirus infection (COVID-19) stabilizing, there is an expectation that pent-up consumer demand, suppressed for a long time due to 'social distancing,' will explode into full-fledged 'revenge consumption.'

◆ Fashion and Beauty Drastic Discounts for the Golden Holiday = According to industry sources on the 29th, major department stores will hold large-scale discount events on fashion and beauty products, whose sales had sharply declined due to COVID-19, during the six-day golden holiday. Lotte Department Store will hold a cosmetic fair featuring 40 cosmetic brands at all its stores. This will be the largest promotion since its opening, aimed at stimulating post-COVID consumption.

In particular, as the prolonged inability to travel abroad has made it difficult for consumers to purchase duty-free cosmetics, three types of promotions have been prepared to offer discounts comparable to duty-free prices. Lotte Department Store offers a 10% discount (via department store app coupon download) and gift certificates worth 10% of the purchase amount (given according to purchase amount tiers). Cosmetic brands provide an additional 5-10% gift certificates and extra brand mileage points, effectively doubling the benefits consumers receive.

Shinsegae Department Store's cosmetic select shop, Chicor, will hold a 'K-Beauty Fair' at all its stores from the 30th of this month to the 31st of next month, showcasing 100 domestic cosmetic brands. Chicor gathers popular brands such as Huxley, Farmy, Klairs, Colette, as well as Dear Dahlia, Lagom, Jung Saem Mool, and By Neff, all in one place. Chicor has prepared various customized sets for different customers, including Stila blushers perfect for Adult's Day gifts, Chicor body wash, lotion, and mask pack sets targeting Parents' Day, and Luxley oil essence sets.

Hyundai Department Store will hold a 'Men's Bespoke Fair' at the Topaz Hall on the 7th floor of its Mokdong branch from the 27th of this month to the 3rd of next month. The event, themed around 'bespoke,' meaning custom-made orders, will feature British luxury bespoke suit brand Scabal, the famous tailor shop in Cheongdam-dong 'Fort Garment,' and domestic and international bespoke suit brands such as 'Banny Bespoke' that are not usually found in department stores. Galleria Department Store will hold a discount event for its private brand 'Gourmet 494,' targeting stay-at-home customers during the golden holiday. From the 1st to the 15th of next month, 13 types of ready-to-eat meals will be sold at a 20% discount.

◆ Will Consumer Sentiment Revive? = According to the department store industry, sales at various department stores increased over the past weekend (24th to 27th) compared to the same period in March. Lotte Department Store showed a remarkable recovery with weekend sales rising 31% compared to the previous month's weekend. Shinsegae Department Store's sales increased by 13.7%, and Hyundai Department Store's by 24.2% during the same period, making for a bustling weekend filled with customers for the department store industry.

Although sales have continued to decline in April following March, it is encouraging that customers who had stopped visiting are returning to department stores. The significant increase in sales in April is largely attributed to so-called 'revenge consumption,' where suppressed consumer demand is being released. Looking at Lotte Department Store's sales by category last weekend, all categories showed a decline compared to last year. However, luxury goods sales increased by 12% compared to last year, indicating the presence of 'revenge consumption.'

Major department stores expect consumer sentiment to recover through this golden holiday. The Korea Customs Service's temporary approval for general distribution of duty-free store inventory is also expected to accelerate consumption recovery. Since fashion and accessories, which had the lowest sales after COVID-19, make up most of these items, it is anticipated to help overall consumption stimulation.

A department store industry official explained, "Although sales are still declining in April, so it cannot be definitively called a recovery, it is expected that sales will recover more significantly starting from the May golden holiday," adding, "Since social distancing is still in place, we will do our best to prevent COVID-19 infections."

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