In a bid to overturn the sluggish growth of traditional brick-and-mortar retail, Lotte Department Store is launching a new type of shopping mall in Seoul, the Lotte El Cube.
In a trendy university neighborhood, the relatively small store focuses specifically on young, fashion-conscious shoppers – a departure from the retailer’s usual strategy of offering something for everyone at its department stores.
Covering 630 sqm in a three-storey building, the Lotte El Cube houses 20 clothing brands, mostly casual in style. Featured labels include Pigment, PlayNoMore and Tomotom’s.
“El Cube can adopt different concepts and focuses, such as beauty and lifestyle, depending on the location and needs of consumers,” says Lotte, which plans a second such outlet also in Seoul within a year.
Lotte says it took its cue from Japan’s Isetan Department Store, which has several branches with different offerings. Isetan Mirror is dedicated to cosmetics and beauty products, while its Alta mall targets shoppers in their 20s.
Known for its urban art and indie music culture, the neighbourhood where El Cube has set up is also attracting start-ups. The average number of daily users of nearby Hongik University Station grew from 72,000 in 2014 to 78,000 last year, and the neighborhood is also expanding in size.
Annual combined sales at South Korea’s department stores – Hyundai and Shinsegae as well as Lotte – have had negative growth since 2014. Lotte is confident El Cube will attract new customers and become a fresh source of revenue amid unfavorable market conditions.
“The key is to find new consumers as department stores are expected to face headwinds and low growth,” says Lotte merchandise strategy division head Woo Gil-jo.
To match other stores in the area, El Cube will have extended shopping hours, from midday to 10pm.