Hemorrhaging customers as the coronavirus pandemic keeps shoppers at home, the department store industry in Korea has set social distancing guidelines aside as companies launch aggressive marketing strategies to attract consumers to enjoy hands-on activities at their brick-and-mortar stores.
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“I have never been in such a difficult situation ever since I started working here 12 years ago. The [veteran employees] say that these days are worse than during the global financial crisis,” a department store employee said.
The department store industry has lost tens of billions of won in sales as stores are forced to close early or completely after customers were later confirmed to have contracted Covid-19.
Major department stores including Lotte, Shinsegae, and Hyundai department stores lost 10 to 20 percent of their sales in January and February compared to the same months last year, and their losses widened in March as they recorded 30 to 40 percent losses compared with March 2019.
“Hosting events seems tone-deaf amid the social distancing campaign, but now the situation is so bad that we have to do something,” said a department store official.
Lotte Department Store is offering hands-on activities. Tamiya, a Japanese company that manufactures radio-controlled cars and plastic car models, debuted a new “Kidult Zone” at its store in the Nowon branch in northern Seoul last Friday.
The display encourages customers to assemble model cars and use them on a circuit track for games and includes science programs led by a professional who participated in the Tamiya Radio Control World Championships.
About 600 customers visited the Tamiya store last weekend, a more than 35 percent on-year increase, the company said. Sales were up 305 percent compared to the previous week, before the company began operating the new display.
Woo Hyun-taek visited the Tamiya store after hearing about the new display.
“My son and I love minicars, so we rushed to play a racing game as soon as he heard the news. It was boring just to stay home because of the new coronavirus, and this definitely lightened up our mood,” Woo said.
On the same floor, the department store set a virtual reality (VR) experience zone hosted by IOYS, a company specializing in 3-D.
Customers can experience a wide range of jobs through high-resolution VR and produce 3-D figures using coding programs or 360-degree photo-scanning technology. It also provides hands-on training lessons for 3-D printing.
“We will continue to expand our original stores where customers can experience different things, such as toys, drone shops and aqua gardens,” said Lee Jong-sung, the head of Lotte Department Store’s Nowon branch.
In its own bid to bring customers back to its locations, Shinsegae Department Store on Monday released the S Samsung Card to provide exclusive benefits for V.I.P. customers. Those customers’ visits appeared surprisingly inelastic during Korea’s coronavirus epidemic – from 1st to 15th February, when the actual performance was the worst, the average number of V.I.P. visits at the Shinsegae Department Store locations was more than double the number of regular customers.
Included in the V.I.P. perks is a special mileage service, allowing customers to save half the purchase of some overseas luxury goods as mileage, of which 3 percent can be converted to Shinsegae gift certificates. The S Samsung cardholders, however, can get credited for 100 percent of the purchase amount.
Shinsegae also introduced three types of new shopping carts. One is with a space to hold a designer bag, conceived by customers who won’t put their purses in carts in order to avoid getting scratches. A special waterproof cloth sheet was added to the baby seat space, creating handbag storage similar to those in high-end restaurants. The retail giant also introduced a small cart aimed for single households that shop in small quantities, as well as a new baby seat cart.
Hyundai Department Store’s Pangyo branch in Gyeonggi is hosting the Pangyo Art Museum, a combination of shopping and art, until 29th March. It will showcase works by renowned foreign artists such as Yayoi Kusama, Jon Burgerman and Keith Haring, as well as themed Korean artwork including Kim Jin-woo’s robot installation.
Department stores have not given up on online promotions either, as e-commerce companies have swallowed up even more business since the coronavirus outbreak.
Lotte Department Store will run a “Lotte Department Store Live” event hosted by Lotte Premium Outlet.
The online mall will sell products in real time, similar to a home shopping network, broadcasting the show from the brick-and-mortar department store. It has also introduced 3-D shopping, which uses 360-degree 3-D images of products from about 60 brands.
Hyundai Department Store will be the first in the industry to offer online lectures through its official YouTube channel. Singer Park Hyun-bin’s mother Jung Sung-eul and actress Lee Yoon-ji’s mother Jung Jin-hyang will have a singing lesson named “Jung Sisters’ Show, Anbang Singing Lesson.”
Kim Hyung-suk, the main chef of the Italian restaurant H450’s main branch, will share shopping tips and easy recipes.
“We will continue to expand online shopping as the rise of e-commerce was a threat to offline department stores,” a department store official said.
(Source: Korea JoongAng Daily)