[단독]Lotte Shopping’s counterattack… Half of the department store’s main store is filled with luxury goods

Lotte Shopping will fill half of the Lotte Department Store main branch (Sogong branch), the heart of the group, with luxury stores. On the 14th, an official from Lotte Shopping said, “Among the total business area of ​​74,700m2 (approximately 2,600 pyeong), including Avenuel, a luxury specialty store, about half of the business area, 36,000m2 (approx. It will be renewed.” Currently, the luxury store area of ​​Lotte’s main store is around 15,000m2 (about 4,500 pyeong). After the renewal, the area of ​​luxury stores will increase to more than double the size of the present. Earlier this month, construction of the Men’s Luxury Hall (the 5th floor of the main store) began. The goal is to finish by this year. Food, miscellaneous goods, and women’s clothing stores (B1-4F) will be renewed from the second half of this year.

Consumers line up in front of the main store at Lotte Department Store in Jung-gu, Seoul to purchase luxury brand Chanel products. [연합뉴스]

Avenuel, which is operating as a luxury hall, will be converted into a specialty hall centered on luxury jewelry and watch brands. It plans to finish the work by 2022 at the latest. When finished, it is expected that the sales of luxury goods, which is 33% of the current headquarters sales, will be able to increase to more than 50%. The Lotte headquarters is still a symbol of the group. This is because the late founder, Honorary Chairman Shin Gyeok-ho, laid the foundation for Lotte’s domestic market here. Although it is said to have been behind the Shinsegae Gangnam branch, it still boasts the second largest sales among all department store stores. It is a card that cannot be withdrawn from Lotte Shopping.

The main branch of Lotte Department Store (Sogong Branch) is. Graphic = Reporter Park Kyung-min [email protected]

This is because it is urgent that Lotte Shopping turns half of its headquarters into luxury-related stores. Recently, it is being pushed against competitors such as Shinsegae and Hyundai Department Store, as well as emerging forces such as Naver and Coupang. The reason why we chose overseas luxury goods as the first card to counterattack is because Lotte Shopping has a comparative advantage and is a product line that is most appealing to young consumers represented by the 20s and 30s.

2030 share of overseas luxury goods sales. Graphic = Reporter Park Kyung-min [email protected]

The proportion of consumers in the 20s and 30s, which accounted for 38% of overseas luxury goods sales in 2018, increased to 46% last year. In addition, luxury product sales were not affected by external shocks such as the novel coronavirus infection (Corona 19). In the case of Lotte Shopping, sales of luxury goods including Chanel increased by up to 42% last year. In addition, if young consumers return to the department store to purchase luxury goods, it is expected that it will help with other product sales. A Lotte Shopping official said, “Starting with the main store, major local stores will steadily strengthen their lineup of luxury goods and related marketing.”

There is one more weapon to capture the younger consumer. It is a living product such as home appliances and furniture. In both cases, sales increased significantly due to the spread of telecommuting. This is why Lotte Shopping is expanding the scale of sales space for home appliance brands such as Samsung and LG Electronics and upgrading it to an experience type. The recently opened home furnishing studio of the Nowon branch in Seoul is 3950m2 (approximately 1,200 pyeong). Various imported furniture and experience spaces were put here.

It also recruits young consumer trend experts. Lotte Shopping plans to appoint Jeon Mi-young, CEO of Trend Korea Company, born in 1981 as an outside director at the shareholders’ meeting on the 23rd.

Other channels in shopping, such as Lotte Mart and Lotte On, are also in the midst of being inclined. Lotte Mart put forward fresh products such as strawberries harvested in the early morning of the day and ‘3-day pigs’ within 3 days of slaughter. Lotte On, which recently suffered from a representative replacement, is also expanding its delivery service using offline stores such as marts.

Reporter Lee Soo-ki [email protected]