"MZ Captured by The Hyundai Seoul"…First Year Sales of 800 Billion Without A.R.M.Y.

Exceeded initial sales targets at opening
Success in capturing MZ generation's interest without major luxury stores
Fastest path to '1 trillion club' visible... Expecting additional luxury brand openings

[Asia Economy Reporter Kim Yuri] 'The Hyundai Seoul,' which is celebrating its first anniversary on the 26th, has surpassed 800 billion KRW in sales in its opening year. This is the highest first-year sales record for a department store in South Korea. Achieved without major luxury brand stores such as 'Ae·Ru·Sha' (Herm?s, Louis Vuitton, Chanel), the industry evaluates that the strategy targeting the MZ generation (Millennials + Generation Z) has been successful.

According to the distribution industry on the 25th, The Hyundai Seoul, introduced as a 'future-oriented department store' by Hyundai Department Store Group on February 26 last year, is expected to exceed 800 billion KRW in sales as of its first anniversary on the 26th. This significantly surpasses the initial first-year annual sales target of 630 billion KRW announced right after opening. The 2022 sales target of 700 billion KRW set at the time was also easily exceeded in the first year. Given this trend, the industry expects that achieving the '1 trillion KRW club' in annual sales will be comfortably reached within the shortest period of three years. Previously, the fastest to surpass 1 trillion KRW in annual sales was Shinsegae Department Store Daegu Branch, which took 4 years and 11 months after opening.

The industry is paying attention to the fact that The Hyundai Seoul achieved such results without major luxury brand stores, which account for a large portion of department store sales. During the COVID-19 era, the 'revenge consumption' trend surged toward department stores, especially those with major luxury lineups, causing rapid sales growth. However, The Hyundai Seoul started without the so-called 'Ae·Ru·Sha.' The background for its strong performance is attributed to the 'successful future department store strategy targeting the MZ generation.' The Hyundai Seoul designated its basement level 2 as the MZ zone and introduced new brands frequently mentioned among this demographic. Furthermore, it continuously showcased pop-up stores of 'hip' brands, ensuring The Hyundai Seoul remained on the MZ generation's 'must-visit' list.

These efforts resulted in a significant lowering of the main customer age group. Over the past year, the most frequent visitors to The Hyundai Seoul were 31 years old. Those in their 30s, including them, accounted for the highest proportion at 37.6%. Including those in their 20s (15.9%), the proportion of visitors exceeded half. To expand loyalty among the '2030 big spenders,' a VIP membership exclusive to the 2030 age group was introduced, followed by the opening of the exclusive lounge 'Club YP Lounge,' linking interest directly to sales.

Another successful strategy was making only 51% of the total sales area (89,100㎡) retail space, dedicating the remaining half to indoor landscaping and customer rest areas. Although the space could have generated approximately 170 billion KRW in additional annual sales if occupied by clothing stores, it was boldly transformed into an 'urban park,' which instead increased customer attraction. The 12-meter-high artificial waterfall 'Waterfall Garden' on the first floor and the indoor park 'Sounds Forest' created by opening the center of the fifth floor attracted more customers than expected who wanted to take photos, leading to a humorous situation early on where 'photo spots' were designated in sequence for visitors to take pictures. Sounds Forest, with its unique nature-friendly atmosphere, hosted luxury brand pop-up stores such as Dior and Tiffany consecutively, which became a hot topic on social media (SNS), attracting even more visitors. The placement of the complex cultural space 'ALT.1,' capable of hosting art exhibitions and more, created a structure where customers could 'enjoy cultural life while shopping,' which was also effective.

The industry expects that the entry of major luxury brand stores, after reviewing The Hyundai Seoul's performance, will accelerate its results. Most major luxury brands consider store entry after confirming the sales status of the location. Hermes, which confirmed its entry into Hyundai Department Store Pangyo Branch last year and is currently under construction, decided to enter after seeing Pangyo Branch's strong performance, including joining the '1 trillion KRW club.' Some luxury brands, including Dior, have already confirmed their entry into The Hyundai Seoul and are currently constructing their stores.

The exterior view of The Hyundai Seoul.

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