Jul 29, 2010

Squeezed department stores make most of spaceBy Lee Soo-kiJoongAngDaily.Joins.com

At Hyundai Department Store’s Sinchon branch, in the heart of the commercial district north of the Han River, there are six so-called “shops-in-walls.” These tiny nooks full of made-to-order display cases were created by moving a wall 55 centimeters (21.65 inches) inward. Each shop-in-wall is no bigger than 5 square meters (53.82 square feet), but these tiny shops are showing sales performance far out of proportion to their size, with a total of 2.5 billion won ($2.1 million) in revenue, or 30 percent more revenue per square foot than full boutiques located on prime shopping space on the first and second floors.

Next to the first-floor escalator near the high-end booths at Galleria Department Store in southern Seoul sits a small gift shop only about 6 square meters in size. A thinner, longer display case had to be installed for the store, which deals in small items such as hairpins and stuffed animals. This tiny shop’s revenue rose 31 percent from January to May compared with last year.

These little nooks are a creative solution to a space shortage at Korea’s major department stores. Industry frontrunner Lotte Department Store has 29 branches, Hyundai 11 and Shinsegae just eight, for just around 50 major department store branches. Meanwhile, as discount chains and other large retailers branch out, room for new department stores is quickly running out in fashionable districts.

Fortunately, ideas abound in the quest to use leftover space efficiently. The main branch of Lotte Department Store in Sogong-dong, Jung District in central Seoul has placed lingerie shops near escalators, areas known for their high customer traffic. This is a shift from the traditional idea that lingerie is not an impulse buy item, and is usually placed far from the entrance.

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