Department stores, hypermarkets race to become destination complexes

Department stores and hypermarkets are reinventing themselves as destination complexes, moving beyond their traditional product-focused formats. The strategy is to give consumers a reason to visit physical stores — and to keep them there longer once they arrive.

Lotte Department Store will open Lotte Mall Bellitaun Cheongnyangni on Oct. 23, expanding its presence near the existing Cheongnyangni branch. Separate from the department store inside Cheongnyangni Station, the new complex will occupy basement level 1 through the fourth above-ground floor of a nearby mixed-use residential and commercial building, spanning 17,852 square meters.

The name itself signals the shift. Rather than a simple "new annex" of the department store, it opens under the Lotte Mall banner — a mixed-use shopping complex format. Anchor tenants include CJ Olive Young, Daiso and Musinsa, which have emerged as major crowd-pullers in recent years, alongside Chinese tea brand Chagee, hotpot chain Haidilao and CJ Foodville's Vips. The idea is to pack in high-traffic brands and extend how long customers stay.

Last year, the Cheongnyangni branch posted sales of 265.4 billion won ($195 million), up just 0.2 percent from the previous year, ranking 41st among 65 department stores nationwide. Lotte Shopping plans to use the renovated Nowon branch and the new Cheongnyangni annex as anchors to draw more customers to the northeastern Seoul market.

E-mart is converting its existing hypermarkets into Starfield Market locations, a format that blends grocery shopping, retail and cultural and leisure offerings. The rollout began with the Jukjeon branch in 2024, followed last year by openings in Ilsan, Dongtan and Gyeongsan. In August this year, E-mart debuted its first Seoul Starfield Market at the Wolgye branch. Last month, it opened a Starfield Market at its renovated Gunsan location. The company plans to add two to three more, primarily in the Greater Seoul area, next year.

The Wolgye branch is particularly notable as the first Starfield Market to bring E-mart, its warehouse-style discount chain Traders and external tenants together under one roof. Targeting families with young children in their 30s and 40s as its core customers, the store was fully redesigned around a "young family community market" concept. About 80 percent of its food and beverage brands were replaced or repositioned. Key tenants including CJ Olive Young, Youngpoong Bookstore and Decathlon were also strengthened. Leisure and cultural spaces were expanded to roughly 594 square meters to give families more room to linger.

The results have been clear. From Aug. 27 through Sept. 30, the number of paying customers at the Wolgye branch rose more than 20 percent compared with the same period last year, according to E-mart. Over the same period, combined sales at major tenants — including CJ Olive Young, Youngpoong Bookstore and Decathlon, as well as food and beverage outlets — climbed more than 38 percent following the renovation.

Grocery sales also rose sharply. Produce revenue, including fruit and vegetables, was up more than 30 percent year on year. Meat sales gained 36 percent, seafood and sashimi more than 42 percent, and deli sales more than 50 percent.

The rapid expansion of Starfield Market is backed by the sales and foot-traffic gains already confirmed at converted stores. In the first half of this year, the four existing Starfield Market locations posted sales growth of 28 percent compared with the same period last year — far outpacing E-mart's overall sales growth of 2.7 percent over the same period.

Customers are also spending more time in stores. At the Ilsan, Dongtan and Gyeongsan branches renovated last year, second-quarter sales and visitor numbers this year rose an average of 79.5 percent and 42.4 percent, respectively, year on year. The share of customers who stayed three hours or more increased by an average of 90.8 percent across the three stores. The number of customers who stayed between three and six hours rose an average of 86.2 percent.

"The competitive edge of physical stores is shifting from simple product sales to experience and dwell time," a retail industry official said. "Creating spaces where customers want to stay longer will be the key to store competitiveness going forward."