Culture Insight

Last July, Kakao Friends opened its first flagship store in Gangnam. After only a month, thousands of people swarmed into the place, approximately an average of ten thousand people visiting the shop every day. The reason for such enormous popularity stems from the cultural characteristic of the store rather than the store simply selling a range of cute character products.

Within the Kakao Friends Store, there is a photo zone where people take photos with famous characters and a cafe showcases not only a characterized dessert menu but also character contents to delight the customers as they savor their desserts. As such, a variety of brands are establishing flagship stores in the form of a cultural complex, as the need for the sentimental aspects provided by cultural experiences is rising. The Argus examined these examples of flagship stores, the causes of their emergence and the prospects of this rising trend.


What is a flagship store?

The term “flagship store,” also called a flag shop, is derived from a naval flagship or the ship in command of a fleet. In a similar context, this word refers to the representative store of a brand that has been carefully furnished from the exterior to interior to best describe the image and values of the brand in question. Initially, famous luxury brands launched their own flagship stores in an effort to not only promote their brands, but to execute market research. However, these days, other industries are also opening flagship stores that take the shape of complex cultural spaces that provide consumers opportunities to experience the brand.


Examples of flagship stores

Last March, a cosmetic brand named Sulwhasoo established a flagship store that resembled rays of beaming light in correlation with their brand concept of illuminating the path toward Asian beauty like a lighted lamp in the dark. On the first and second floor, there are displays of new seasonal and exclusive products available only at this store and a corner for testing. The third floor offers a variety of cultural classes including personal beauty counseling and regular tour service of the brand’s flagship store. The fourth floor allows consumers to be immersed in a special spa filled with raw materials prescribed  by Sulwhasoo.

Last May, New Balance (NB) launched a flagship store specifically for female fitness products and services near Gangnam station. While the first and second floor exhibit a range of products for female consumers, the third floor allows for a real fitness experience within the NB Women Studio at which invited instructors teach monthly exercise programs that include yoga and Pilates.
The staff of the NB flagship store stated, “Since June, a wide range of programs have been offered to people and thanks to avid participation, the studio is operating well on a regular basis.”

Similarly, a fashion brand 8 SECONDS launched a Creative Project Space named “Studio 8” last May, to create a space for fashion culture in which the brand can communicate directly with its consumers. In line with its philosophy to add a special energy to daily life, Studio 8 provides a platform for new campaigns, exhibitions and workshops for creating creative contents. For its first fashion exhibition, 8 SECONDS collaborated with Social Networking Services (SNS) poet Ha Sang-wook and photographer Kim Kyu-hyung, both of whom produced a written and visually artistic work based on the characteristics of linen material.

A staff member of 8 SECONDS revealed that, “Studio 8 will continue to hold new forms of exhibitions, as well as artist performances and styling classes to effectively promote its unique brand identity.”


What are the causes of their emergence?

Consumption based on personal values
People in one out of four households live alone. This number of single member households has grown rapidly over the past few years. Statistics Korea recently reported that the number of single member households accounts for 27.2 percent of the total, and this statistic has shown a constant increase from 23.9 percent in 2010. Also, 35 percent of these people are in their twenties or thirties, those who are most prone to go on spending sprees. As these individuals live alone, they are equipped with more financial freedom to spend their income entirely for themselves.

Combined with their economic and social circumstances, many people can afford to consume products that they believe are worthy of their money, instead of simply concentrating on the price and quality of the product. To be more specific, people turn their eyes to the values that the brand pursues and the satisfaction they receive through the buying experience rather than the product itself.

Lee Eun-hee, a professor teaching consumer science at Inha University, agreed that consumers no longer only consider the functional features of products when shopping and they also regard the sentimental elements as important. She said, “Especially those who live alone tend to seek individual satisfaction more than others. Therefore, flagship stores endeavor to respond to this tendency by placing a focus on how the store may seize the attention of these young consumers through direct engagement.”
Although flagship stores existed before today, they have transformed themselves to better satisfy the varied focuses that consumers have regarding shopping.

Huh Woong, a professor of Advertising and Public Relations at HUFS, explained, “Contrary to the stores that used to center around products, nowadays they have changed to provide consumers opportunities to enjoy cultural experiences.”

Attracting people to offline locations
Today, most consumption takes place online where it is easier to compare prices and read product reviews. To induce these online shoppers to offline locations, the stores must present something that is only available offline to the consumers.

Professor Brady from the Consumer Science major at Seoul National University said that stores are not simply places to purchase products since online shopping is much more effective and convenient. He emphasized, “They [flagship stores] need to transition to places where people can experience their contents and spend time, not just money. In the same way, flagship stores try to diversify consumer experiences associated with the brand.”

Hence, flagship stores have been converted into cultural spaces that provide consumers the freedom to look around, without needing to make purchases, and be involved in interactive activities rather than the stores simply providing one-way promotions and events.

Increasing publicity through sharing experiences on SNS
In effect, flagship stores have been built with the purpose of imprinting the brand on people, but the reason for their growing popularity in recent years originates from the growing influence of SNS. Although many companies have sought to promote their brands through diverse SNS platforms, their evident effort cannot compare with the promotion provided by the consumers themselves.

These days, many people share their experiences through SNS to show off the special moments and feel a greater degree of satisfaction. Flagship stores offer these active SNS users unique experiences that they can post online. Then the consumers share these experiences with other people, which stimulate a more effective promotion.
Professor Lee Eun-hee remarked, “Flagship stores provide a special story called an ‘experience’ that the consumer can deliver to other people who will also indirectly relate to his or her pleasure and take an interest in the story.”

An anonymous student from the Dept. of English Linguistics said, “It was a great experience to visit a place that was trending on Facebook. Also I was impressed by the photo zones where I could freely take pictures and share them with others, which I did afterwards and even set one as my profile picture!”

How can these places transform shopping?

Enhanced experience through advanced technology
As technology develops, it gradually effects the daily lives of people, stretching its scope to flagship stores. The implementation of technology reinforces the level of vivid experiences that use all senses and bestows an unforgettable experience to consumers.

Recently, a cosmetics brand, Innisfree, introduced a Virtual Reality (VR) zone within its flagship store in Gangnam. After a female consumer puts on appropriate device, they can watch the natural beauty of Jeju Island, the core image associated with the brand, as they go on a date with Lee Min-ho, a Korean celebrity and the brand’s model. This video clip is not only filmed from the first person perspective, but it is also combined with 360-degree scenery and 3D effects, all of which contribute to presenting the consumers with a more immersive experience. 

Lee Seon-yup, professor of Advertising and Public Relations, stated that, “As the world is becoming more digitalized, the technology is steadily incorporated into real life and enhances the brand experience. This helps create a new consumer experience that no one has ever undergone before.”

Improved approachability through Beacon
Although flagship stores optimize both their exterior and interior spaces to maximize the consumers’ experience when shopping, they are limited in approachability and effect within their locations. They are few in number because of the high cost in establishment and low profit in comparison to investment, so they are only located at the hottest spots with the largest floating population. Therefore, flagship stores make contact with a quite limited number of customers. However, this limitation could be mitigated through the implementation of a technology called Beacon.

Beacon is a short-range data communication technique that can transmit information to a larger range than other existing devices using Wi-Fi and other available transmission sources with a 50-meter maximum. Professor Lee Yong-mun who currently teaches Advertising Campaign Strategies at HUFS explained that digitalization has rapidly risen along with the dissemination of smartphones. Thus, it is now possible to utilize Beacon, which operates by activating the location-based services embedded in every smartphone.

Beacon allows stores to send relevant data to passers-by within a certain distance who would have walked by without the information. This presents a greater possibility of securing more customers and engaging them in the experience provided. He articulated, “Currently, Beacon is used in some exhibitions such as motor shows, but this may also be expanded to service flagship stores.”


As can be seen from above, flagship stores today are in the process of transformation. In the past, they placed emphasis on their best line of products, providing additional knowledge of the brand through a small showcase. They also attempted to complement their offerings by providing a separate area such as an in-store cafe where customers could take a break, prolonging their stay. However, flagship stores today offer cultural experiences closely related to the brands, which in fact aim to fulfill the sentiments and values of the customers so that the visit itself is worthy of their time.


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