A venue for music listening in Lotte Department Store Jamsil (Image courtesy of Lotte Department Store)
SEOUL, Jul. 2 (Korea Bizwire) – In a bid to differentiate themselves from online shopping platforms, South Korean department stores are undergoing significant transformations, focusing on experiential retail, premium offerings, and attracting younger consumers.
At the Lotte Department Store in Jamsil, Seoul, the 10th floor audio section now boasts three listening rooms. Global audio brands Geneva and JBL Luxury, which entered the store earlier this month, each have their own listening rooms. Bowers & Wilkins, which arrived in December, also features a dedicated space.
Together, these three brands occupy a premium audio complex spanning approximately 330 square meters, allowing customers to experience high-end sound systems in home-like environments.
The trend extends beyond audio equipment. Last September, dozens of eager shoppers lined up 90 minutes before opening time at the Shinsegae Department Store in Gangnam, Seoul. The excitement was for the debut of Emis, a rising fashion brand popular among young consumers. The brand’s coveted hats sold out on the first day.
According to industry insiders, department stores are prioritizing differentiation from e-commerce platforms. This strategy involves creating experiential spaces and strengthening food and beverage offerings, while also attracting fashion brands that primarily cater to customers in their teens and twenties through online channels.
As part of this shift, individual store spaces within department stores are growing larger. Lotte Department Store’s main branch in Seoul is undergoing its most extensive renovation since opening in 1979.
The men’s fashion floor has been transformed into an international men’s fashion area, reducing the number of brands per floor but expanding each brand’s space. This creates a more spacious shopping environment.
Lotte has also introduced unique experiential spaces. In early May last year, Lotte World Mall opened a 500-square-meter tennis equipment store featuring an actual tennis court.
A Lotte Department Store representative stated, “Experiential stores are a competitive advantage that can’t be replicated online. We expect to see more of these hybrid spaces combining products and experiences in the future.”
Epic Seoul, a 730-square-meter pop-up space created by the Hyundai Seoul (Image courtesy of Hyundai Department Store)
Hyundai Department Store has also embraced this trend. In March, it renovated the children’s section on the fifth floor of its The Hyundai Seoul location, creating Epic Seoul, a 730-square-meter pop-up space equivalent to about 10 clothing stores.
This area hosts various pop-up stores and serves as a rest area for shoppers. A Hyundai Department Store representative explained, “Recent department store renovations focus on allocating large spaces to create differentiated spatial competitiveness, rather than increasing the number of sales floors. These unique spaces can change the store’s image and attract younger customers as they become popular spots for ‘proof shot’ photos.”
Department stores are also actively courting younger consumers, particularly those from the MZ generation (born between the early 1980s and early 2000s). The fashion category, a key product group for department stores, is experiencing significant changes with the rise of Korean designer brands.
Shinsegae Department Store Gangnam’s New Street section (Image courtesy of Shinsegae Department Store)
Shinsegae Department Store has created dedicated sections for young fashion brands in its Centum City (Busan) and Gangnam (Seoul) locations.
The Gangnam store’s New Street section, which opened last September, features popular domestic brands like Wooalong and Birthdaysuit, marking their first appearance in a department store.
In the three months following its opening, 84% of visitors to New Street were new customers.
Lotte Department Store has also embraced this trend, introducing brands like Ader Error at its Lotte World Mall location in June last year, marking the brand’s first appearance in a department store in the Seoul metropolitan area.
They also welcomed Mardi Mercredi, one of the “3 Ma” brands (along with Matin Kim and Maison Marais) popular in K-fashion. This store has become the top-selling location for foreign tourists within Lotte World Mall.
A Shinsegae Department Store representative noted, “By renovating our young fashion sections and introducing numerous K-fashion brands, we’ve successfully attracted young fashion demand that had been concentrated online for years. This has helped us secure future customers by bringing in younger generations who previously didn’t visit department stores.”
Food courts and gourmet halls are another area of focus for department store renovations. Shinsegae Department Store’s Gangnam branch recently opened Sweet Park, the country’s largest dessert hall, in February.
In early March, the store unveiled a premium food hall called House of Shinsegae near the JW Marriott Hotel. The supermarket and deli sections are also undergoing renovations.
The competition to attract popular eateries is fierce. Lotte Department Store’s World Tower branch became the first department store to host London Bagel Museum in August last year, attracting over 150,000 visitors monthly.
Galleria Department Store brought in ChaPanda, a premium milk tea brand from China that sells over 1 billion cups annually, to its Seoul luxury goods store. Shinsegae Department Store plans to introduce Intelligentsia, a renowned American coffee brand, to its main branch, joining Blue Bottle and Stumptown.
A Lotte Department Store representative reported, “Since the opening of London Bagel Museum, overall sales on the same floor have increased by more than 30% compared to last year, demonstrating the effectiveness of these additions.”
Ashley Song (ashley@koreabizwire.com)
