Seniors growing as main customers for Korea's department stores

PHOTO: The Straits Times

A department store chain in South Korea said its customers aged 70 and over led a significant growth in sales, indicating a rising trend of older generations picking up the offline retail business.

According to department store AK Plaza on Thursday, senior citizens in their 70s showed an average of 15 per cent annual growth in sales over the past three years, the largest in any age group.

"Department stores attract senior citizens in their 70s looking for a place to socialize, and many of those customers choose to shop for beauty and fashion products, as well as shop for groceries after their social event," an official with the company said.

Senior citizens are becoming an ever more important demographic for department stores, which have seen sales falling in a stagnant consumer economy. Over the past three years, sales among shoppers from their 20s to 40s only grew about 1 or 2 per cent.

According to numbers from the Industry Ministry, the proportion of all retail sales from offline retail channels such as department stores has continued to fall as online shopping becomes more popular in Korea.

In August, department store sales as a whole fell 0.8 per cent on-year.

As more consumers turn to online platforms for retail shopping, the offline retail industry is moving toward strengthening entertainment facilities to draw in shoppers -- and department stores are seeing stiff competition from large-scale shopping malls with entertainment options such as mini theme parks.

"Older shoppers have always been an important demographic for department stores because of their buying power, but they are becoming even more important," said an official with a department store chain.

"Seniors tend to prefer the quieter environment of a department store than theme parks, and they also tend to be more loyal to the places they frequent. Most department stores will be increasing marketing and loyalty programs that target this demographic."