Luxury companies are becoming serious about the restaurant business here as a way to maintain their posh image and continue to attract attention from young, trend-savvy consumers, according to industry officials, Tuesday.
Italian high-end luxury fashion house Gucci has opened Gucci Osteria restaurant in Itaewon, Seoul, where it serves dishes cooked by a Michelin three-star chef. A burger costs 27,000 won ($18.91) and a course menu ranges from 120,000 won to 170,000 won there. Despite its high prices, reservations for the restaurant were sold out four minutes after it opened.
French luxury firm Louis Vuitton also opened a pop-up restaurant called Pierre Sang at Louis Vuitton for just one month in May and it was fully booked as soon as reservations opened up. Global K-pop band BTS member J-Hope’s visit to the restaurant also played a key role in making it into one of the hottest places in Seoul.
With this momentum, in September, Louis Vuitton opened a second pop-up restaurant in the posh district of Cheongdam-dong, Seoul. Despite most of its prices being in the 300,000-won range, it was fully booked as soon as it opened and people are now selling their reserved times to make a profit.
Swiss luxury watchmaker Breitling introduced a restaurant and a coffee shop together with its brand shop, which opened early this year. The company expressed its luxury brand image in its food and beverages and has grabbed the attention of watch fans.
Korean popular eyewear brand Gentle Monster did not fall behind the trend, opening dessert cafe Nudake at its flagship store in Apgujeong, Seoul, where it has attracted dessert lovers from across the country.
The COVID-19 pandemic has pushed luxury brands to promote its fashion items in digital space, which turned out to be successful among not only among those in their 20s and 30s, but also those in their 60s and 70s.
Amid this major paradigm shift, luxury brands have begun investing to offer experiences of their brands in various ways. However, companies have also learned that there is a limit for customers to experience fully their brand identities and products online.
Thus, top-tier firms have begun opening restaurants and coffee shops. It costs less for customers to experience the luxury brands through food and desserts, compared to purchasing a handbag or clothing at a boutique. Such visits to restaurants are temporary but customers can experience the brand with their five senses without spending tens of millions of won.
In short, opening a restaurant and coffee shop can lower the entry barrier for customers to experience luxury brands. This strategy has been proven with young customers of Korea’s MZ generation, millennials and Generation Z, who are emerging as a main consumer group of luxury goods.
Luxury brands are strengthening their food and beverage (F&B) business because they want to expand their brand experience into the lifestyle sector. Companies can show their brand value and identity through a new gourmet field.
“Luxury brands running restaurants and coffee shops focus more on the brand experience than its profitability. Food and beverages leave a strong impression for consumers and they naturally lead to creating bonds with the brand. In another words, this is good marketing strategy to build customers’ loyalty to luxury brands,” a luxury firm official said.
Unlike restaurants in five-star hotels, luxury brand stores offer various consumer experiences through architecture, interior design and the cutlery items used at their restaurants.
“As an extension of going to fashion shows, experiencing luxury brand restaurant cuisine provides opportunities for customers to experience the lifestyles of the upper class by eating the same food in the same spaces with them,” the official said.