Amid concerns about an economic slowdown and accelerating polarization in consumer spending, department stores appear to have raised the bar again this year for selecting ultra-high-spending VIP customers.
According to the retail industry on the 9th, Hyundai Department Store created a new "Jasmine Signature" tier this year, higher than the previous top tier (Jasmine Black). Jasmine Signature is given only to some consumers who have received the Jasmine Black tier. Selection is based on a comprehensive review of purchase amount, number of store visits, and past VIP selection history, and is said to be communicated individually.
Those selected for the Jasmine Signature tier can use a dedicated lounge once a day. They can also use free parking and valet service, and Jasmine Signature consumers can register up to two vehicles. Events exclusively for the Jasmine Signature tier are also prepared. Jasmine Black, the previous top tier, had been granted to consumers who spent at least 120 million won annually, but starting this year the threshold has been raised to 150 million won.
Lotte Department Store also created a new "Avenuel Sapphire" tier this year. This tier is given to those who spend at least 80 million won and less than 120 million won annually. It was created as Lotte Department Store subdivided its VIP tiers into six levels: Black, Emerald, Sapphire, Purple, and Orange. While keeping the Black VIP standard—selecting only 777 ultra-high spenders—unchanged, Lotte Department Store raised the threshold for the previously granted "Avenuel Emerald" tier from 100 million won in spending to 120 million won.
Shinsegae Department Store, which saw many changes in selection criteria over the past three years, decided to keep its VIP selection tier structure and amounts unchanged this year. However, it plans to differentiate service use. The number and amount of beverages and refreshments provided in service lounges will vary by tier.
At Shinsegae Department Store, refreshments have already differed by tier. Because of this, there have been cases on the secondhand market of people collecting and selling only the refreshments provided for free. The reason is that they serve as a kind of "grading system" that easily signals spending power when hosting at home, and so on.
Department stores raised VIP tier standards because the number of big spenders continues to grow amid polarized spending. Calls have grown to further segment and manage VIP customers. The expectation is that providing services more befitting true VIPs will raise satisfaction and lead to more spending.
An industry official said, "Dependence on consumers who make high-priced purchases is increasing," and noted, "If such consumers leave, it affects store performance, so it is important to manage them well to raise satisfaction and prevent churn."
In this process, department stores have little choice but to fully accommodate VIP consumers' desire for "distinction (La Distinction, a concept proposed by French sociologist Pierre Bourdieu)." It is the desire to gather with people of similar spending capacity to enjoy the same time and space. This is also why department stores are creating new lounge spaces by tier.
A department store official said, "There is a saying that 'the person who always follows causes problems.' Some VIP complaints at department stores are about whether a person is 'eligible to enter this space,'" adding, "Satisfaction rises when services are provided with differentiation even among VIPs."