Apartment model house on the 5th floor of a department store…Will the Lotte Dept. Daegu store discount experiment?

Input 2021.03.15 15:47

Lotte Dept. Daegu, plans to enter a model house of 800 pyeong in May
Pushed in to attract luxury goods from Hyundai and Shinsegae…Lotte seeks a bow as a living item
Expecting the effect of attracting customers… Concerns about “does not match the atmosphere of the department store”

Lotte E&C’s model house with a size of 2600m2 (approximately 800 pyeong) will be built in the Daegu branch of Lotte Department Store. This is the first time that a model house has entered a department store. With the Daegu real estate market booming, the industry is paying attention to whether this experiment will succeed.

According to the distribution industry on the 15th, Lotte Department Store and Lotte E&C recently agreed to open a model house on the 5th floor of Lotte Department Store’s Daegu branch. Lotte Department Store’s Daegu branch has decided that it will be able to attract model houses in low-efficiency spaces to get fixed rental income and attract customers, and Lotte E&C will secure a stable model house site and reduce the cost of new model houses and withdrawals. Explained.

There was a time when a department store built a living store in the form of a’showroom’ to accommodate the occupancy of nearby apartment complexes, but there was never a model house built at all. In March of last year, the Uijeongbu branch of Shinsegae Department Store opened a’Style Living’ store in which a living space was decorated according to the concept of each space, such as living room, kitchen, bedroom, and study, targeting a 1700-generation apartment complex that opened near the department store.

Lotte Department Store plans to create synergy effects by displaying not only furniture but also the latest home appliances in the model house space. In addition, it plans to open a bakery or café store near the model house store and use it as a community space for local residents.

Lotte Department Store’s unprecedented attempt to enter a model house is not irrelevant to the current situation of being pushed out of the competition for department stores in Daegu. From Daegu to Shinsegae Department Store Hyundai Department Store (069960)It is said that Lotte Department Store, who had been deprived of a large number of customers, took out a model house card as a countermeasure as a result of the promotion of this luxury brand.

Hermes opened in December last year. Shinsegae (004170)The Daegu store even opened a Chanel store on the 12th, and will have all the so-called three luxury goods, Hermes, Chanel, and Louis Vuitton. On the first day of opening, customers to buy Chanel bags flocked from dawn, and fierce’open run’ competition unfolded.

An official at Lotte Department Store said, “It is true that Lotte is somewhat inferior to rival department stores in Daegu.” I thought it could be resolved.

In the living and home appliance industry, store configuration in the form of a showroom is the latest trend. It goes a step further from the way that only products are displayed and shows a space composed of various products. A typical example is the showroom store of IKEA, a Swedish furniture company. Recently, Samsung Electronics also unveiled an experience space decorated with products of’BESPOKE’, a customized household appliance, at the Gangnam Main Branch of the Samsung Digital Plaza in Gangnam, Seoul.

The distribution industry’s view of entering a model house in a department store is mixed. Along with the positive evaluation that customers who visit the model house to get information on the new apartment, it will be possible to increase sales by inducing the flow of traffic so that they can shop naturally, and that it can damage the brand value by creating the atmosphere of a department store like a’Ghost Market’. Concerns also arise.

An official in the department store industry said, “The biggest reason customers visit department stores is because of the unique atmosphere of the department store.”

The industry predicts that Lotte Department Store’s strategy can happen simultaneously and simultaneously across the country. Lotte Department Store operates 32 stores nationwide. It has been pointed out that the number of stores is the largest among the three department stores, but the sales and efficiency per store are low.

Lotte Shopping (023530)Eun-eun, vice chairman Kang Hee-tae, is working on restructuring to recover profitability. There are only 100 stores planned to close this year. In this situation, it is an analysis that local stores will have to come up with various strategies for their own survival.

In the securities industry, the effect of Lotte Shopping’s restructuring will begin in earnest from this year, and it is expected that the annual earnings improvement effect of 200 billion won will be achieved.

Lee Eun-hee, professor of consumer science at Inha University, said, “Lotte Department Store is lagging behind as the Hyundai Seoul and Shinsegae Gangnam stores in Seoul are striking, and this trend can continue in the provinces.”

Professor Lee continued, “Hyundai has created a’space you want to stay’ out of the frustration of existing department stores. Shinsegae has united recreation, entertainment, and shopping into one.” It is a desperate situation for Lotte,” he explained.