Camille Gray is a strategist at Initiative.
Just recently I went to Shanghai, where I planned to stay for 10 days to celebrate Chinese New Year. I was excited to devour bowls of hand cut noodles amidst one of the world’s most famous skylines.
The coronavirus had other plans.
After every major cultural attraction shut down, my Shanghai itinerary was quickly derailed.
So, I took a 90 minute flight to Seoul where I had zero plans other than to avoid contracting a potentially life threatening virus.
Why Seoul? The combination of BBQ grill, karaoke and 24 hour saunas posed an ideal alternative itinerary. I’d also noticed that Korea was asserting major influence in almost every cultural category. In the past few weeks, we’ve seen K-Pop band BTS perform at the Grammy’s, making history as the first Korean performance at an American awards show while Korean director Bong Joon-ho’s film Parasite dominated The Oscars.
The Chinese have a phrase hallyu or The Korean Wave, to describe how South Korean pop culture has gained momentum since the 1990s. I knew cosmetics (K-Beauty), entertainment (K-drama), music (K-Pop) and fashion were all working to re-position Seoul as the new epicenter of global culture.
What I didn’t expect to find in Seoul was retail innovation.
Australia’s 2020 retail scene has been described by commentators as a ‘retail apocalypse.’ Many media outlets have gone so far as to call it a ‘bloodbath,’ citing 161 store closures in January alone. Like Australia, online retail in South Korea is experiencing double digit growth (+15% year on year), far outpacing offline sales. Yet if we compare % share of online retail, South Korea is significantly more advanced. Despite major growth in the past few years, online sales in Australia still account for only 9% of overall retail sales. In South Korea, this figure sits at ~25%, putting them third in the world.
With almost a quarter of every retail purchase made online, and many fashion brands operating exclusively online, South Korea offers a vision of Australia’s retail future. Yet it’s the furthest thing from an apocalypse.
Rather than eradicate physical stores completely, many South Korean brands create experiences that go far beyond shopping. After visiting multiple stores in Seoul, here are my three big takeouts:
1) Add to cart…in your own time
Rather than an extension of an online catalogue, many stores de-prioritized the act of making a purchase. Korean fashion store Ader Error actually hid its clothing. Dr Jart+ (one of Korea’s most loved cosmetic brands) had "discovery rooms" designed for stimulating the senses, without a shelf in sight. Just recently, AmorePacific, a South Korean cosmetics giant opened a store that had absolutely zero stock; instead opting to use the space for testing, tutorials and flower box workshops.
These brands envision a world where the majority if not all products are purchased online, which means their stores exist to offer a much more valuable exchange; a highly physical and often playful brand experience.
In Australia, we are often subject to suffocating customer service (“Just browsing?”) fueled by daily sales targets. In Seoul, none of the staff were approaching customers. These stores traded on-the-spot sales for stickier, memorable brand experiences. The sales assistants smiled as I left the stores after 45 minutes of purchase-free lingering. Even if I exited with empty hands, a valuable exchange had taken place.
2) The sensorial store
With purchases increasingly made on two dimensional mobile screens, Korean stores were designed to remind us how good seeing "in 4D" could be. Knowing that we so often browse using just our eyes and fingertips, Korean stores put smell, touch and sound at the forefront.
Dr Jart decided to bring “soft” skin to life with fur-lined walls, giant fluffy sculptures and pink swings. This theme extended to a branded karaoke room in the middle of the building. Fluffy pink microphones and branded speakers were offered for no reason other than to entertain.
A skincare-themed rooftop trampoline park was built with viewing platforms that made for the perfect aerial shot. In minutes, I was uploading footage to Instagram of me jumping with Dr Jart’s signature product ‘Cirapair’ at my feet.
Dr Jart crafted a sensory experience that was thrilling for the consumer, but equally irresistible to share on social. This and many other spaces were designed shared, meaning the physical store became a media channel in itself. To transform an owned asset into a shared one, brands sought inspiration from their consumers, manufacturing the space with the question: how can we guarantee that this space will be seen by more than just the person in it?
3) Delight in the details
Korean stores treated the consumer journey as a sacred treasure hunt. Even the most banal transactions (e.g. stepping into a store or receiving a bag from a shop assistant), were made into moments of delight.
For example, Ader Error’s latest collection was centred on nostalgic VHS video tapes, yet rather than keep this hidden on some mood board in a designers studio, the inspiration was embedded in every detail:
1. At the door, I was greeted by a two metre sculpture of a Yeti made entirely of strips of camera film and surrounded by branded VHS tapes.
2. Upon closer inspection, the film strips were actually sourced from the shooting of their SS20 Autumn collection.
3. Custom film posters decorated the store, announcing their designers as ‘directors’ of the collection
4. Following the trail of film, I discovered a storeroom that had been transformed into an actual movie theatre where I watch behind-the-scenes filming of the new collection
5. When I purchased a shirt, it was packaged with a custom film poster along with an actual strip of film from the exhibition.
6. My receipt was delicately folded, with my surname and smiley face handwritten on the top; a small gesture that transformed a formerly transactional symbol into a personal exchange.
While packaging can seem like a small afterthought, these Korean brands saw it as a major opportunity to transform a retail necessity into branded cultural keepsakes. Creating a sense of scarcity and attaching money-can’t-buy memories to a physical purchase makes the labour of a store visit worth it.
In Australia, "try before you buy" is a behavioral habit that isn’t going anywhere. Rather than lament this behavior, Korean retail aggressively encourages it.
Facing a future like Korea where a quarter of all purchases are made online, Australian brands should consider how physical elements (from store space to packaging) can be a meaningful media channel within an online purchase path.
We’ve already seen the Korean wave exert its influence on western music, films and beauty regimes. Yet when next seeking inspiration from the east, don’t just think K-POP, think K-Shop.
Camille Gray is a strategist at Initiative.
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