On the afternoon of the 30th of last month, a line stretched in front of the "Pokemon Mureungdowon" pop-up store on the first floor of Lotte World Mall in Songpa District, Seoul. After a long wait to reach the kiosk for registering entry, a visitor who typed in a mobile phone number saw a message on the screen: "1,172 groups waiting, estimated wait time 255 minutes." After another wait, the interior displayed dolls, diaries and cards made using the Pokemon intellectual property. Visitors snapped photos with their phone cameras in front of the displays, and at the sales area at the end of the exhibition route they competed to buy the merchandise.
The process of waiting a long time, taking part in an experience in a limited space and then buying a product has itself become a form of play, and the scarcity of the merchandise doubles the satisfaction consumers feel. Targeting these shoppers, department stores and large shopping malls have positioned themselves as "experience platforms." It is an experiential commerce strategy that draws customers into stores, keeps them there as long as possible and prompts spending on shopping and food and beverages.
According to the retail industry on the 2nd, the flagship stores of the three major department store operators — Lotte Town Jamsil, Shinsegae Department Store Gangnam and The Hyundai Seoul — held 2,160 pop-up stores last year. That is about 36% more than the 1,580 held a year earlier and 2.2 times the 960 held in 2022. The annual total is likely to set another record this year.
The trend dovetails with the rapid growth of online shopping and a shift in the focus of consumption from products to experiences. According to the Ministry of Trade, Industry and Energy's monthly report on sales at major retailers, online sales accounted for 60.8% of all retail sales last month, a record high. Judged purely on the act of buying goods, including price and convenience, offline stores can no longer easily hold an advantage over online channels. That has made it all the more important for offline retail spaces to create a reason for consumers to visit.
A prime example is Shinsegae Group's renovation of E-Mart's Wolgye store into Starfield Market Wolgye, where the company set up a customer lounge instead of shelving in the prime space that had generated the highest sales. An E-Mart official said the move is "a strategy to raise the store's overall drawing power and related sales by increasing how long customers stay and how often they return, even at the cost of reducing selling space in the near term."
Competition built on experience is spreading to other retail channels, including home shopping and live commerce. Companies that have sold goods mainly through television and mobile screens are expanding their offline points of contact. Lotte Home Shopping ran an experiential pop-up store called "Heehee Nakrak Yuyu Jajeok" in Bukchon, Seoul, in April. It was designed so that customers could see, touch and smell products they had previously encountered only on broadcasts or mobile screens. CJ Onstyle held a summer Black Friday event called "Come On BLF" in July that combined a concert by the hip-hop duo Dynamic Duo with live commerce.
The push into experiential content is translating into more visitors and higher purchases. Lotte Home Shopping said orders for the roughly 20 brands that took part in the pop-up store rose about 40% from before it opened. CJ Onstyle said daily active users during the Come On BLF event were 46% above normal levels and that new mobile customers increased about 30%.
The shift is expected to accelerate as artificial intelligence becomes more deeply embedded in the shopping process. In a report titled "Shopping in the AI era: Redefining the store for a new age," global consultancy McKinsey said that as AI takes over routine purchases and product searches, the number of store visits may fall while the value of a single visit could grow, and that customers are likely to come to stores in search of a differentiated experience they cannot get online.
An industry official said a growing number of customers see offline spaces not simply as places to buy goods but as places to spend time and experience various content. "From the retailer's side, it is also possible to quickly see which content customers respond to, so as customer demand and operational advantages align, competition in pop-up stores and experiential content will grow even fiercer," the official said.
