Posted on 01/30/2010 7:57:00 AM PST by TigerLikesRooster
Why Cosmetics Rule the 1st Floor of Department Stores
Invariably, in Korea as much as the rest of the world, cosmetics shops dominate the ground floor of department stores. The reason is simple: customers who purchased cosmetics items on the first floor account for more than 70 percent of retailers' total sales.
Hyundai Department Store analyzed the sales contribution of customers who paid with department store credit cards during the first 11 months of last year, to find out how much the annual spending of customers who bought specific items contributed to total sales. It showed that cosmetics purchasers make the biggest contribution.
Annual spending by those who had purchased cosmetics more than once accounted for 78.5 percent of total sales. By contrast, spending by customers of luxury or designer products represented only 46.4 percent of sales.
In the case of Shinsegae Department Store, cosmetics purchasers' contribution accounted for 71.2 percent of sales. The results mean that customers who buy cosmetics more frequently also buy more other products there than other customers.
Another reason for the placing of cosmetics halls on the ground floor is that they are seen as the most cost-effective. One cosmetics shop covers 23 sq. m, far less than the 33 sq.m a clothes outlet occupies. In many cases, cosmetics stores top the list of business performance in terms of sales per square meter. Setting it up is also easy, and the walls separating cosmetics counters are low, allowing customers to have an overview of the floor at a glance when they come in at the main entrance of the store.
And the mark-up on cosmetics is incredible! People pay outrageous amounts for products that cost pennies to produce.
I did not see, in the intro paragraphs, where the author mentioned the gender of the subject shoppers. I was just wondering.
Korean women are beautiful, and they do wear a lot of make-up!
One whiff of Channel #5 and I have an intense urge to urinate.
That is actually a rather common effect.
These stores GET NO SALES AT ALL FROM US, not on the first floor, not on the 20th floor.
Many other customers in there buying cosmetics become ill and have to leave the store early.
Stores without cosmetic sales on the 1st floor have a totally different result, and probably get more sales in the aggregate.
We need a law to restrict cosmetic sales to special stores isolated from the local atmosphere.
Of course, but it's those eeeeevil oil companies that we have to overtax because of their obscene profits. I think either Rush or Sean Hannity brought up the profit margins between cosmetics and oil. The difference was in the magnitudes.
- Traveler
One of my favorite department store is Sogo and I always thought that there was some sort system of layering the store layout since most of the department stores are built vertically.
Even ordinary women commonly do 9-stage make-up.
Some French cosmetics executive turned up in Seoul, extolling Korean women for doing (drum roll) 14-stage make-up. LOL.
In comparison, women in the West are said to do 3 or 4-stage make-up.
Competition among women in S. Korea is simply out of control.
This is not just true for department stores. The mark-up on food supplements and vitamins is also astronomically high. Supermarkets make up their profit on such merchandise, and carefully position the high-mark-up merchandise so you have to walk through or past it to get to the stuff they make no money or lose money on.
And then there is the "impulse buy" merchandise they crowd around the checkout register. All high mark-up.
The science of positioning merchandise to maximize profit is exceptionally well-developed. Nothing is left to chance.
They are needed next door in China.
“Competition among women in S. Korea is simply out of control. “
Yeah its terrible! But boy do they look good
What is it that Sarah Jessica Parker does?
“I wonder though if that’s because of plastic surgery?”
Its partly because of plastic surgery. Most people in show business will get their eyes and nose done to look more western. Its nearly 100% of the people.
They don’t get or need much else. Walk down the street and see a bunch of healthy korean women in the spring, oooo la la.
The cometics laws should be fashioned after the smoking laws. No private company should be allowed to offend customers.
Most perfume, cologne, etc. smells like bug killer.
Anyone who has ever smelled Kimchee would realize why perfumes are such a big hit in Korea.
Just like any Macy’s in the states.
Not plastic surgery (although that is often a factor for the moneied set)...Korean women are just a good looking bunch in general.
Thanks.
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