Lotte Department Store's Cashmere Knit Hits Big, 20,000 Sold in One Month

Purchasing Large Quantities of Cashmere Yarn from the Mongolian Region to Reduce Own Margins
Helping Sales with Various Colors and Sizes...Active Discount Marketing

[Asia Economy Reporter Lim Hye-seon] Cashmere 100% knitwear sold through Lotte Department Store's private brand (PB) unit is flying off the shelves. Amid the COVID-19 pandemic that ruined clothing sales this year for department stores, cashmere knits have become a 'hero' product.

According to Lotte Department Store on the 3rd, cashmere knits surpassed cumulative sales of 20,000 pieces within about a month during the '2020 Lotte Cashmere Fair' held at all stores since September 25. In the fashion industry, a product selling 10,000 pieces in a month is considered a 'blockbuster' item.

The secret to its popularity is 'price competitiveness.' The department store PB operations team priced the cashmere 100% knits at 88,000 to 98,000 won, about one-fifth the price of well-known cashmere brands in the market. Cashmere refers to the fine wool from the inner layer of cashmere goats living in high mountain areas. It is thinner and lighter than wool and has 6 to 8 times the warmth, earning it the nickname 'jewel of fibers' as a premium material. To lower the price, the PB operations team acted swiftly last year. First, they purchased a large quantity of cashmere yarn from the Mongolian region in China, reducing their own margin. Additionally, through collaboration with Maha Knit, a domestic knitwear manufacturer, they simultaneously produced 250,000 pieces during the spring and summer off-seasons?equivalent to three years' worth of stock. Given the current sales trend, it is highly likely all will be sold this year. Furthermore, they released about 20,000 more pieces of cashmere 100% knits with different fits and lengths, as well as cardigans, dresses, and vests.

The variety of colors and sizes also helped sales. There are a total of 21 styles and 41 different colors, with a wide range of sizes from Small (S) to Extra Large (XL), allowing customers to purchase directly in stores. Recently, as clothing brands shifted to small-batch production to avoid leftover inventory, consumers found it inconvenient to immediately take products home from stores.

Active discounts and online marketing also played a key role. To make cashmere knits more accessible, a promotion was held both offline and online where customers buying two of the same style cashmere knits receive a 50% discount on one piece. Choi Won-seok, Chief Buyer of Lotte Department Store PB Operations Unit, said, "Thanks to the concept of 'for me and my family' and strengthened promotions compared to last year, many customers are choosing cashmere 100% knits not only for themselves but also as gifts for family and loved ones."

Currently, Lotte Department Store operates eight PB brands including Eliden, Eliden Studio, Eliden Men, Eliden Play, Parsons, Unit, View, and Pect. They plan differentiated items that showcase Lotte's unique identity through direct sourcing of overseas famous brands, presenting domestic trending brands in a curated shop format, and collaborating with excellent partners.

Following the positive results of PB products, Lotte On has teamed up with startups possessing AI technology and production capabilities to launch an online-exclusive brand called 'Demons.' Demons is a brand that plans, manufactures, and distributes clothing using AI. The name Demons carries the meaning of 'adding new sensibility to design among the MZ generation (M + ON + Z).' The design is handled by 'Designoble,' an AI-based design startup, production by the startup 'Comma,' and distribution by 'Lotte On.' The AI developed by Designoble analyzes patterns, colors, materials, and other aspects of clothing products worldwide via the internet, organizes them into product trends, and references millions of materials such as collections and lookbooks each season to perform repeated sketching autonomously. This enables the AI to design up to 10,000 products per second.

Lotte On selected hip-hop artist Cheetah as the first muse of Demons and is releasing the 'Demons X Cheetah' collection. Cheetah provided images she personally chose, including her pet cat, environment, and her changed self, to the AI. The AI combined these images with self-extracted data to create street fashion designs embodying Cheetah's philosophy. Based on this, Lotte On will sell eight types of products including goose down jackets, fleece down jackets, hoodies, and sweatshirts in a limited sale until the 17th. Prices range from 110,000 to 250,000 won. Lotte plans to platformize this to the level where AI designers can create 'my own design' from just one photo.

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