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S. Korea: Why Cosmetics Rule the 1st Floor of Department Stores
Chosun Ilbo ^ | 01/30/10

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.


TOPICS: Business/Economy; Foreign Affairs; News/Current Events
KEYWORDS: cosmetics; departmentstore; sales; skorea

1 posted on 01/30/2010 7:57:02 AM PST by TigerLikesRooster
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To: TigerLikesRooster

And the mark-up on cosmetics is incredible! People pay outrageous amounts for products that cost pennies to produce.


2 posted on 01/30/2010 7:58:21 AM PST by Calm_Cool_and_Elected
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To: TigerLikesRooster

I did not see, in the intro paragraphs, where the author mentioned the gender of the subject shoppers. I was just wondering.


3 posted on 01/30/2010 8:00:00 AM PST by HChampagne (I am not an AARP member and never will be.)
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To: TigerLikesRooster

Korean women are beautiful, and they do wear a lot of make-up!


4 posted on 01/30/2010 8:01:50 AM PST by PGR88
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To: TigerLikesRooster
The fact that cosmetic sales account for a very large percentage of total sales at multi-level stores that sell cosmetics on the first floor is not at all surprising.

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.

5 posted on 01/30/2010 8:04:44 AM PST by muawiyah ("Git Out The Way")
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To: Calm_Cool_and_Elected
And the mark-up on cosmetics is incredible! People pay outrageous amounts for products that cost pennies to produce.

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

6 posted on 01/30/2010 8:05:35 AM PST by Traveler59 (Truth is a journey, not a destination.)
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To: TigerLikesRooster

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.


7 posted on 01/30/2010 8:05:45 AM PST by Perdogg ("Is that a bomb in your pants, or are you excited to come to America?")
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To: PGR88
they do wear a lot of make-up!

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.

8 posted on 01/30/2010 8:09:06 AM PST by TigerLikesRooster (LUV DIC -- L,U,V-shaped recession, Depression, Inflation, Collapse)
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To: Calm_Cool_and_Elected
And the mark-up on cosmetics is incredible!

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.

9 posted on 01/30/2010 8:12:31 AM PST by behzinlea
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To: TigerLikesRooster

They are needed next door in China.


10 posted on 01/30/2010 8:13:58 AM PST by esquirette (If we do not know our own worldview, we will accept theirs.)
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To: PGR88
Korean women are beautiful, and they do wear a lot of make-up!

Agreed! Many Korean actresses/ models are beautiful. I wonder though if that's because of plastic surgery? I've heard plastic surgery is so common in S. Korea that parents give them to their children as graduation gifts.
11 posted on 01/30/2010 8:18:49 AM PST by Lux-In-Domino
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To: TigerLikesRooster

“Competition among women in S. Korea is simply out of control. “

Yeah its terrible! But boy do they look good


12 posted on 01/30/2010 8:22:08 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: TigerLikesRooster

What is it that Sarah Jessica Parker does?


13 posted on 01/30/2010 8:22:12 AM PST by ConservativeMind (Hypocrisy: "Animal rightists" who eat meat & pen up pets while accusing hog farmers of cruelty.)
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To: Lux-In-Domino

“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.


14 posted on 01/30/2010 8:24:55 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: muawiyah
We need a law to restrict cosmetic sales to special stores isolated from the local atmosphere.

The cometics laws should be fashioned after the smoking laws. No private company should be allowed to offend customers.

15 posted on 01/30/2010 8:27:17 AM PST by Balding_Eagle (If America falls, darkness will cover the face of the earth for a thousand years.)
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To: muawiyah

Most perfume, cologne, etc. smells like bug killer.


16 posted on 01/30/2010 8:29:13 AM PST by caver (Obama's first goals: allow more killing of innocents and allow the killers of innocents to go free.)
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To: TigerLikesRooster

Anyone who has ever smelled Kimchee would realize why perfumes are such a big hit in Korea.


17 posted on 01/30/2010 8:34:56 AM PST by wastoute
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To: TigerLikesRooster

Just like any Macy’s in the states.


18 posted on 01/30/2010 8:38:05 AM PST by wtc911 ("How you gonna get down that hill?")
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To: Lux-In-Domino

Not plastic surgery (although that is often a factor for the moneied set)...Korean women are just a good looking bunch in general.


19 posted on 01/30/2010 8:39:51 AM PST by wtc911 ("How you gonna get down that hill?")
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To: TigerLikesRooster

Thanks.


20 posted on 01/30/2010 8:42:46 AM PST by BunnySlippers (I LOVE BULL MARKETS . . .)
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To: wtc911; driftdiver

Yes, I agree. Plastic surgery can only take you so far... many of these Korean women are genetically beautiful to begin with. The surgery is more like little tweakings/ not major overhauls. Try watching Korean drama/ movies ... you will get hooked :o)


21 posted on 01/30/2010 8:49:55 AM PST by Lux-In-Domino
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To: Lux-In-Domino

Plus they have a very healthy diet so their skin is perfect.


22 posted on 01/30/2010 8:52:52 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: wastoute; TigerLikesRooster

Its not offensive to them. Its usually the guys that drink very heavily that smell horrible with the garlic coming out of their pores.

Westerners often smell like spoiled milk to them.


23 posted on 01/30/2010 8:54:33 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: ConservativeMind
What is it that Sarah Jessica Parker does?

The same technique as Mr ED.

24 posted on 01/30/2010 9:01:12 AM PST by DUMBGRUNT (The best is the enemy of the good!)
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To: wastoute

Kimchee is my all time favorite smell in the world!


25 posted on 01/30/2010 9:02:10 AM PST by LibertyGrrrl ("First they ignore you, then they laugh at you, then they fight you, then you win." Mahatma Gandhi)
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To: TigerLikesRooster

My son says the #1 profit center for department stores is women’s shoes.


26 posted on 01/30/2010 9:05:17 AM PST by flyover
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To: driftdiver

But their breath (and other mucosal orifices) tends to smell of the garlic from the kimchi.


27 posted on 01/30/2010 9:11:16 AM PST by Marechal
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To: Lux-In-Domino
My area of NY is GrandCentral for Koreans in the area (Little Neck/Great Neck). Some are friends, neighbors, business associates, etc..

The women are fun and funny, very open and eager to become "American". The men are stolid and pretty reliable. I like them as a group although scratch the surface and there are major dysfunctions, mostly about the changing role of the sexes.

28 posted on 01/30/2010 9:13:30 AM PST by wtc911 ("How you gonna get down that hill?")
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To: wtc911; driftdiver

Yes, I agree. Plastic surgery can only take you so far... many of these Korean women are genetically beautiful to begin with. The surgery is more like little tweakings/ not major overhauls. Try watching Korean drama/ movies ... you will get hooked :o)


29 posted on 01/30/2010 9:16:54 AM PST by Lux-In-Domino
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To: TigerLikesRooster

I am over 70. I don’t ever remember it being different.


30 posted on 01/30/2010 10:19:28 AM PST by ridesthemiles
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To: caver; TigerLikesRooster; Calm_Cool_and_Elected

>>>And the mark-up on cosmetics is incredible

>>>Most perfume, cologne, etc. smells like bug killer

Several years ago some university did blind tests on what scents are most appealing. The item that came out on top of the list was simple inexpensive Vanilla Extract.

Great-grandma knew what she was doing when she would daub some vanilla behind her ears before going to the squaredance.


31 posted on 01/31/2010 12:00:46 AM PST by tlb
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To: tlb

“Great-grandma knew what she was doing when she would daub some vanilla behind her ears before going to the squaredance.”

Sounds like my Great-Grandma. I love the smell of vanilla!


32 posted on 01/31/2010 4:29:27 PM PST by caver (Obama's first goals: allow more killing of innocents and allow the killers of innocents to go free.)
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