This file photo shows consumers line up in front of the Chanel shop of Lotte Department Store in central Seoul in May 2020 amid rumors of a possible mark-up. (Yonhap)
SEOUL, May 3 (Korea Bizwire) — Luxury brands are exploring various ways to prevent the deterioration of their brand value caused by resellers.
The Rolex store within the main branch of Lotte Department Store introduced a 10-day waiting system last month, according to industry sources.
Under this system, customers with phone number ending 6, for instance, can register for a waiting list only on the 6th, 16th and 26th day of each month.
The Rolex stores at Hyundai Department Store’s Apgujeong and Trade Center outlets also introduced a phone-based reservation system early this year.
Phone reservations start at the opening hour of the stores, and the daily standby list is limited to 40 people. The frequency of reservation available for each person is also limited to once in every 15 days.
Chanel also limited the number of popular items such as Classic Flap Bags and Coco Handle lines a particular customer can purchase to one per year and small leather goods items to two per year.
The primary reason why luxury brands are introducing such policies is to prevent the deterioration of brand image caused by resellers who purchase popular items simply to re-sell them at a higher price.
Chanel increased prices four times last year, but due to the open run phenomenon, in which people wait in front of its stores before opening hours, its brand image deteriorated resulting in resale prices being lower than the original prices at department stores.
The prevalence of revenge spending sprees captured media spotlights last year as long queues of young consumers formed almost on a daily basis in front of Chanel stores across Seoul, hours before the shop’s opening time.
Ashley Song (ashley@koreabizwire.com)
