The Completely Transformed Shinsegae Gangnam Store, Secrets of the 1st and 1/2 Floors

2016 Renewal Project Finale
Core Customer Base Shifted to MZ Generation
Over 50 Cosmetic Brands Gathered on 1st Floor
Top-Selling Overseas Luxury Brands on 2nd and 3rd Floors
Experience Store and Lounge Installed Between 1st and 2nd Floors to Increase Customer Dwell Time

[Asia Economy Reporter Seungjin Lee] Shinsegae Department Store Gangnam Branch, which holds the top sales record among single department store locations in Korea, has embarked on its final transformation. This move reflects the rapidly changing consumer behavior following the COVID-19 pandemic and aims to shift its core customer base from middle-aged consumers to the MZ generation (born early 1980s to early 2000s).

According to the department store industry on the 7th, Shinsegae Gangnam Branch will begin renovation work on the first floor starting October 1. This marks the final stage of the Shinsegae Gangnam Branch 'Renewal Project,' which began with the opening of the new annex 'Pamiestreet' in 2016. The most notable feature is the bold restructuring: a massive experiential cosmetics store will be established on the first floor, and luxury brands will replace women's clothing on the second and third floors, which generate the highest sales.

Capturing the MZ Generation... Transforming the First Floor into a Cosmetics Hub

Through this renewal, Shinsegae Gangnam Branch will break the existing formula of 'first floor = luxury' and transform it into the largest cosmetics store in Korea. Twelve cosmetics brands currently located on the second floor will move to the first floor, resulting in over 50 brands occupying a single floor.

The decision to make the first floor cosmetics-focused is a strategy to capture the future core customers, the MZ generation. Although visits to offline stores for cosmetics purchases have been declining due to the growth of online environments, cosmetics are often purchased after direct skin testing.

Ultimately, the first floor, previously occupied by luxury brands, will be dedicated to cosmetics to attract 20-30-year-old customers and encourage their visits to the department store. Shinsegae Gangnam Branch, which already houses experiential stores of global cosmetics companies such as Chanel Beauty and MAC, plans to expand these experiential stores through this renewal.

Additionally, the renovation includes creating a new mezzanine space between the first and second floors. While the specific purpose of this space has not been disclosed, it is expected to house customer lounges and experiential stores. Unlike typical customer lounges located on upper floors, establishing a lounge on the first floor is likely intended to give the department store a more relaxing atmosphere.

Boosting Sales by Moving Luxury Brands Upstairs

High-end luxury stores typically occupy the accessible first floor. Meanwhile, the second and third floors have traditionally been dedicated to women's clothing, which accounts for more than half of department store sales. However, with the rise of online shopping, women's clothing sales have been declining, whereas luxury brand sales have significantly increased year after year. In fact, the luxury sales ratio at Gangnam Branch has soared to about 40%, more than four times the average of general stores (10%). Notably, last year, luxury sales growth among young customers in their 20s and 30s reached 49.2%.

Shinsegae Department Store Gangnam Branch is consolidating luxury stores, which were scattered across multiple floors, onto the second and third floors to enhance customer attraction. The third floor, which completed its renewal last month, opened an art space filled with about 120 pieces including paintings, photographs, objects, and sculptures, further emphasizing the luxury atmosphere of the stores. Women's clothing, usually located between the second and fourth floors, will move up to the fourth and fifth floors. This change will increase the movement paths of female customers, seemingly designed to encourage shoppers to open their wallets at least one more time during their visit.

The first floor renovation at Gangnam Branch will begin next month, aiming for a grand opening in June next year. This renewal will complete all above-ground floor renovations. Gangnam Branch started its renewal in 2016, recently finished the third-floor luxury store renovation, and the partial second-floor renovation is expected to be completed within this month. Specific plans for the basement level 1, the final stage of the Shinsegae Gangnam Branch renewal project, have not yet been announced.

Meanwhile, Shinsegae Gangnam Branch recorded sales of 2 trillion KRW last year, ranking first in sales among single department store locations in Korea. Sales of 2 trillion KRW at a single store level are comparable to world-renowned department stores such as Isetan in Shinjuku, Japan; Galeries Lafayette in Paris, France; and Harrods in London, UK. Previously, it also earned the title of the fastest store to reach 1 trillion KRW in sales within the industry.

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