What: Major Korean department stores are elevating VIP strategies, raising spending thresholds and offering curated experiences to secure consistent luxury demand during market downturns.

Why it is important: Targeting younger affluent consumers and enhancing VIP experiences positions department stores to maintain relevance and growth despite broader economic challenges.

Korean department stores are responding to economic headwinds by doubling down on their VIP customer base, recognising that these high-spending individuals provide a reliable source of revenue even as broader consumption slows. Lotte, Shinsegae, and Hyundai have all reported significant increases in the proportion of sales attributed to VIPs over the past five years, prompting them to raise spending thresholds and introduce new, more exclusive tiers. These programmes are increasingly personalised, offering curated experiences such as fine dining events with Michelin-starred chefs, exclusive access to rare luxury items, and invitations to high-profile cultural and sporting events. The evolution of these loyalty schemes is not only about exclusivity but also about appealing to younger affluent consumers, as seen in the creation of trendy VIP lounges and clubs for those under 45. By focusing on tailored engagement and strategic partnerships with luxury brands and restaurants, department stores are ensuring that their most valuable customers remain loyal, thereby safeguarding their position in a challenging retail environment.

IADS Notes:

As observed in January 2025, Korean department stores have raised VIP qualification thresholds and restructured benefits, intensifying their focus on high-value clients. June 2025 data confirms that the top 1% of spenders now generate a quarter of department store revenue, making VIP strategies crucial for business growth. The evolution of loyalty programs, highlighted in May 2025, shows a blend of digital innovation and personalised service, particularly targeting younger affluent shoppers. Strategic partnerships with Michelin-starred restaurants and luxury brands, as seen in June and February 2025, further enhance the exclusivity and appeal of VIP offerings, underscoring the sector’s shift toward highly curated, experience-driven engagement.

Korean department stores turn to VIPs to navigate economic slowdown