By HeeSun Kim and Young Rok Park
Imagine a place where department stores are destinations for retail and social activity, where the mere mention of the term “department store” still conjures fond memories of day-long family outings in the city. Fifty years ago, this could have been any major city in the United States, but the current epicenter of the design revolution in large-format retail, culture and fashion is on the opposite side of the planet, specifically in Seoul, South Korea.
The Myeongdong district in Seoul covers barely one square kilometer of land, but its burgeoning influence on other parts of the world is impossible to ignore. Once just a hub for typically Western culture and commerce, the area has surpassed its cousins in Tokyo and Beijing due, in part, to a new focus on all things Asian. Galleries showcase Asian artists. Restaurants feature gourmet Asian fare. Department stores — once focused almost solely on Western brands — now showcase the work of Asia’s most exciting fashion designers. Seoul is now the shopping mecca for the Asia Pacific region.
South Korean retailers are going back to basics to make shopping fun again, just as it was in its American heyday. Here’s how retailers in Myeongdong are recreating a memorable retail experience.
From a design standpoint, Seoul’s new retail spaces offer something special right up front. Architectural and design features are immediately more unique and memorable. Restrooms are more spacious, escalators nicer and public areas larger. Each of these design upgrades lets shoppers know immediately that their needs are the primary considerations.
Major department store brands, such as Lotte and Hyundai, have invested significant resources into creating stores designed to offer entertaining shopping experiences. It isn’t unusual for department stores in Seoul to offer customers access to amenities such as a garden or restaurant on the roof, childcare, on-site thrill rides, cooking or language classes. These activities aren’t just add-ons; the original blueprints called for these public lifestyle areas to be integrated into the space from the beginning.
The South Korean department store sales model is different from the one with which Western consumers are familiar. In the United States, department stores sell from warehoused inventory. Within Korean department stores, approximately 70% to 80% of retail floor space is rented to suppliers that sell their own branded merchandise. The suppliers are responsible for staffing, merchandising and sales, enabling stores to focus their attention on creating something special from a brand and design perspective. This new model enables stores to really think about their own brand identities and capitalize on the key traits differentiating their stores from those of their competitors.
This works from the customer experience and design perspectives, just as the concept did when it first emerged throughout the United States. But the new approach is, perhaps, more successful financially. A typical department store in Seoul generates approximately half a billion U.S. dollars in sales each year, and attracts and sustains consumer traffic that is exponentially higher than the level generated by its American peers. Shoppers remember and return to these easy-to-navigate and fun stores, which creates a tangible economic benefit to retail and entertainment areas near the stores.
The Lesson of South Korea: What’s next? Seoul is rapidly supplanting cities such as Tokyo and Beijing as a capitol of Asian retail in large part because Korean merchants are comfortable with being Korean, which translates to a unique vision that is ultimately communicated by a store’s look and feel. Another key consideration is the way Korean retailers are eschewing luxury for luxury’s sake. While the new retail spaces are certainly luxurious, it is the customer that takes center stage in the design process. These elements establish the recent developments in Seoul as a new movement rather than a refresh of an old one with potential benefit to other retailers and customers alike who adopt these trends from their Korean counterparts.
HeeSun Kim and Young Rok Park are VPs and managing creative directors of FRCH Design Worldwide, Cincinnati. Park was the lead designer of Liverpool, Interlomas, Mexico, which took the top spot in Chain Store Age’s annual Retail Store of the Year design competition.