Shoppers visit a department store in central Seoul on Sept. 23, 2020. (Yonhap)
SEOUL, Jan. 5 (Korea Bizwire) — South Korea’s department store chains are reducing benefits for top-spending VIP customers as a sharp increase in the number of such customers has led to a steep increase in related expenses.
According to industry sources, Lotte Department Store introduced a new VIP customer system on Monday, its first changes to the program in 20 years.
The department store’s VIP customers have been classified into seven groups. However, with the introduction of the new system, the number of classification categories was reduced.
This move is aimed at reducing the number of mid-level VIP customers.
Hyundai Department Store also revised the annual spending standard for mid-level VIP customers from more than 40 million won (US$31,520) to more than 55 million won.
The standard for higher-level VIP customers was also revised upward from 80 to 90 million won to 120 million won.
Shinsegae Department Store recently removed the benefit of giving away free drinks to VIP customers who spend more than 4 million won a year.
Industry watchers said that department store chains may have no other option but to do so since the number of VIP customers recently increased sharply due to the spike in luxury consumption amid the pandemic.
Lina Jang (linajang@koreabizwire.com)
