Redefining Retail: Drawing Inspiration from South Korea’s Success

Napoleon famously called the British a ‘Nation of shopkeepers’, but in recent years, it's no secret that the UK retail sector has faced its fair share of challenges, with a slew of disheartening headlines making the rounds. Most recently, Wilko, a favourite among the boomer generation, went into administration. The British Retail Consortium reports the closure of 6,000 shops in the UK over the past five years, and even the British middle-class darling the John Lewis Partnership posted a staggering £234m annual loss, with its chair, Dame Sharon White, agreeing to step down by 2025.  

It's easy to assume that this decline is primarily driven by the shifting preferences of younger generations, especially gen z. However, the reality is far more nuanced. Despite their affinity for technology, 81% of Gen Z still enjoy the experience of shopping in physical stores. The key difference lies in their expectations for a unique shopping experience, including special promotions, giveaways, and discounts. Over two-thirds are inclined to visit physical stores that offer technology-enhanced shopping experiences, and up to 80% of Gen Z use social media for product discovery, emphasizing the importance of a robust online presence for brands.  

While many countries are grappling with retail challenges, South Korea stands out as a success. So, what's South Korea doing differently to make retail such a successful cornerstone of their consumption culture?  

What truly sets them apart is their reimagining of retail spaces themselves. Exemplified by fashion and luxury brands opening directly managed stores and ending their reliance on domestic distributors, as well as the massive popularity of pop-up stores by brands ranging from Nintendo to Jacquemus and Absolut Vodka, the shopping experience has been revitalised. The importance of South Korea as a fashion Mecca is underpinned by major luxury brands, such as Gucci, and Louis Vuitton, debuting their collections in mesmerising shows across Seoul’s cityscape. The growth, excitement, and opulence of South Korean retail is far removed from the concrete reality of UK high streets.    

Retail spaces in Korea have evolved from physical locations that showcase and sell products to being a facilitated social media stage for consumers' attention. In a world where social media is becoming more important for product discovery, it's crucial for brands to have a strong online presence. This has led to intense competition to design unique, immersive, exciting retail spaces that entice consumers to visit and, more importantly, share their experiences online. When consumers step into a store, it's no longer just about browsing and finding products; it's about creating co-branded user generated content that promotes the brand. Retail spaces no longer sell solely to in-store consumers; they’re a UGC hub to sell to online consumers. The aim is for the store design to go viral on social media and capture a bigger slice of consumer attention, making customers both consumers and creators of marketing content.  

This trend transcends product segments and brands, from Dior’s phalanx of statues outside their pop-up store in Seongsu-dong and the giant cats that fill Nerdy’s flagship store in Hongdae, to the ever-changing designs at Gentle Monster, which embody the 'experience-first' retail space ethos. Dosan House, the Gentle Monster flagship store in Apgujeong, changes design every four to six weeks and boasts an in-house team composed of one-third interior designers. This has resulted in a worldwide celebrity following that includes Kylie Jenner, Kendrick Lamar, and homegrown Jennie from BLACKPINK, not to mention the collaborations with brands like Maison Margiela and games like Overwatch.  

So, what can the UK's declining retail landscape learn from South Korea's success? Adopting new technologies and innovative promotional strategies are undoubtedly important, but equally crucial is redesigning retail to be relevant to an increasingly social media-crazy world.   

Maybe it’s worth looking back to a different time, when the only sign that hung in a shop carried the legend: ‘The Customer is Always Right’. South Korea seems to have adapted this truism to reflect the desires of a new generation of consumer, responding to changes in customer demands and behaviours, and evolving retail by merging physical and virtual environments into one super sales arena. For UK retail to energise the high street offer, it would be remiss of us not to draw inspiration from the achievements of the South Korean approach.