Lotte Duty Free says its new $3bn World Tower building is the world’s third largest (555m) and a ‘role model’ in the DF&TR business.

 

The new building and 11,000sq m store were originally due to open last June, but have been subject to months of delays due to initial safety concerns. However, the Metropolitan Seoul Government gave the building a clean bill of health, after numerous inspections by experts and media over an intense 10-day period.

 

As reported, Lotte Duty Free opened its $3bn World Tower branch in the southern Seoul Chamshil area of Gangnam last week (October 16) and followed this up with a formal opening ceremony earlier this week.

 

The retailer says the store sets ‘a new standard’ in the global duty free market and it is already claiming sales have risen by 20% compared to those previously monitored at its nearby Lotte World duty free store located in the Lotte World Hotel, which is now closing.

 

Lotte further reports that just days after the October 16 opening, customer purchasing levels have risen by more than 3,000 and transaction values are up by 20% compared with trading in the old store over a similar comparative period.

 

 

The large cosmetics area which is traditionally one of the biggest sales generators for Lotte’s downtown shops.

 

 

SPACE FOR WIDER BRANDED RANGES

The new retail layout is designed to cater to both local Korean residents and Chinese group tours and with the considerable additional floor space that will be available, Lotte plans to display a much wider range of merchandise for each brand than has ever been possible within its Lotte World store.

 

The World Tower branch is the second tallest building in Asia after the Burj Dubai and this initial opening will be followed by a Phase 2 development in 2016 which will add another 5,000sq m, bringing the total duty free space to 16,000sq m when it opens.

 

Lotte Duty Free says that ‘as befits the best duty free shop in Korea’ the new offering includes ‘approximately 420 stores’ from Korean cosmetics to renowned international brands. The retailer also boasts that it not only runs the biggest Korean cosmetics special zone. Senior Lotte retail executives in Seoul also told TRBusiness earlier this year that major brands will benefit from this new opening.

 

Kim Joon Soo, Merchandising Division Managing Director at Lotte Duty Free said: “We will increase space for Louis Vuitton, Cartier, Hermès, Chanel, Prada, Gucci and others. We want their boutiques to be more spacious to cater to Chinese customers wanting a good shopping experience.

 

“We will display a full range of products. We are asking luxury brands to display their full line – for example, for Cartier to show their full bridal display. We will offer about 100sq m to 150sq m extra space to top brands on top of their existing space.”

 

 

Lotte Duty Free knows from experience that fashion boutiques carrying full product lines are very popular with Mainland Chinese customers.

 

 

HIGH CEILINGS = SPACIOUS FEEL

The Lotte World Tower store has been designed by RTKL. As part of its brief, Lotte asked the Los Angeles-based company to create a feeling of luxurious comfort as customers enter the store. A 3.4-metre ceiling height – 1.3 times higher than conventional stores – is also being used in the Lotte World Tower to create a feeling of spaciousness.

 

Chiffon and indirect lighting has been used to create an effect of ‘the sun shining through white clouds’. Other features include a large number of HD TV screens located around the store, providing details of products and special promotions. At the opening these featured exclusive promotional advertisements featuring the top model Su Hyun Kim.

 

These and other initiatives are designed to ensure that this store is the most attractive and advanced in Korea for both local and foreign visitors/shoppers. [click here for more details of the shop provided to TRBusiness: http://www.trbusiness.com/index.php/regional/asia/15925-huge-3bn-lotte-world-tower-to-open.html].

 

In a statement, Lotte Duty Free management said: “As the largest duty free shop in Korea, Lotte Duty Free World Tower branch has selected brands which are favoured by Koreans and foreigners based on accumulated data all the while.

 

“With consideration of Chinese tourists’ shopping interests which are cosmetics and fashion items, the biggest Korean cosmetics zone is established. Not only 140 cosmetics brands… Korean fashion brands occupy 120% more space compared to Korean fashion space in [the old] World branch as the interest in Korean Wave fashion increases.”

 

 

Watch Road features a very premium selection of brands, although they are not all open on time.

 

 

WHERE SHOPPING AND TOURISM MEET…

Heung Gyun Lee, CEO of Lotte Duty Free said: “By leading in attracting foreign tourists, we will be of help for the economic activation and local brand promotion and will concentrate on all capabilities and efforts to make [the] Lotte Duty Free World Tower branch as [a] representative duty free shop in Asia putting shopping and tourism culture together.”

 

Lotte says the new store will also offer top brands more room to breathe. In watches and jewellery it says Tiffany and IWC are relocating and ‘high-class watch brands such as Rolex, Omega and Titoni are featured on Watch Road. Lotte adds that the Cartier store sells the favourite and biggest quality jewellery brand in Korean duty free and a bridal shop for those who are soon-to-be married is also a new addition to the retail mix.

 

The retailer adds that special shops designed by customer’s age preferences are also prevalent, with a men’s zone for young males aged between 20~30, plus a baby zone covering early childhood goods and even an organic product zone supplying services which reflect individual tastes.

 

Lotte has also installed ‘high end’ customer lounge and customer service areas with views over Seokchon Lake and the customer counselling (service) area is also three times bigger than that at the old store. The retailer has also created separate information desk reception areas for Koreans and foreigners with the aim to provide a faster and more efficient service to both groups as a result.

 

Private elevators have also been installed around the stores to support customer shopping and ease of movement, while traffic congestion below has been addressed with dedicated parking spaces reserved only for foreign group tourist buses. [Parking capacity has doubled compared with the last store-Ed].

 

 

Most definitely aimed at Lotte’s many younger consumers.

 

 

BUILDING RETAIL BRANDED IDENTITY

The World Tower branch is also working with Lippincott, a global brand and design strategy company that has created the exclusive VI (Visual Identity) which will be used only for the World Tower branch. Lotte says VI encapsulates the retailer’s vision of a new duty free shopping trend, with the new  concept of ‘New Wave, New Shopping’.

 

Lotte says it hopes to ‘arouse a New Wave’ in the duty free shopping environment and experience. This VI identifier has been created exclusively for the World Tower branch and is branded on all the retailer’s shopping bags, coupons and other materials.

 

Another ‘must visit’ area for foreign tourists is Lotte’s signature ‘Star Avenue’ which is located at the  World Tower branch. Multi media interactive space features actual size Korean Wave models of Su Hyun Kim, Min Ho Lee, Geun Suk Jang and another 34 Lotte Duty Free models.

 

Fun activities available here will also include hand printing, taro games and other activities. The staffing of this area is also linked in with the Ministry of Gender Equality and Family, which supports local jobs and Lotte says all of the profits from this area will be donated to the local community.

 

Film clips of famous models commemorating the opening of the store are available to upload onto social networks and YouTube and a teaser and promotion video clips starring Korean Wave star Su Hyun Kim have also been produced,commemorating the opening and these will be loaded onto social networks and YouTube in overseas markets.

 

 

As reported by TRBusiness earlier this year, Lotte’s nationwide Korean-based chain of airport and downtown shops grew by 13.8% in 2013 to sales of $3.3bn, up from $2.84bn in the previous year. Lotte owed much of the very strong $460m sales increase to the continuing fast rise in Mainland Chinese customer spending, which has more than compensated it for the fall in Japanese visitor spending at its stores.

 

 

FUN, COMPETITIONS & BELGIAN CHOCOLATE…

‘Go to the world famous landmark’ is also a competition targeting local and foreign visitors purchasing goods costing more than one dollar. This is designed to give the winner the chance to visit skyscrapers in seven countries, including the Burj Halifax in Dubai, Sears Tower in Chicago and the Shanghai World Financial Center. Limited EXO watches are also being produced and distributed by order of arrival.

 

Lotte also plans to continue with its well-advertised family concerts, cultural events and celebrity personality appearances and Lotte also plans to work with overseas travel agencies to advertise these and other services

 

Last, but not least, Steven Candries, Export & Travel Retail Director for Guylian Belgian Chocolate [now owned by Lotte]  has also opened its first Guylian Belgian Chocolate Café in the new Lotte World Mall underneath the new Lotte Tower building.

 

Commenting on the early trading, Steven Candries said: “I am very proud to tell you that the sales during the first day already exceeded the expectation set by the GBCC project team in Seoul. The Guylian Belgian Chocolate Café’s two-storey branch covers 120 square meters (1,290sq ft) and has seating for 78 people. The cafe shows how chocolate is made from cacao beans.

 

“After having opened successfully three GBCC’s in Sydney Australia, Guylian is eager to spread this successful concept further in key markets.”

 

TOP IMAGE: A still photograph from Lotte Duty Free’s multi-million dollar YouTube music video featuring boy bands and other stars singling ‘You’re so Beautiful’ (version 2).

 

[A full report on Lotte Duty Free and its main rival retailer Shilla Duty Free appears in the The World’s Top 10 Operators 2014 study, which is out this week with a limited number also available on a first-come, first-serve basis at next week’s Tax Free World Exhibition in Cannes, France].