Luxury Shoppers Brave Rain and Heat for Price Increases

On the morning of July 20, as heavy rain was forecasted at 30mm per hour, a long line formed outside the Lotte Department Store Avenue L in Songpa, Seoul. While office workers hurried to work with umbrellas, the department store had already set up barriers to manage the waiting area. The first person in line, a man in his 40s, brought a folding chair and waited for about two hours, looking at his smartphone in the rain until the store opened.

The scene was similar on July 16, when temperatures soared above 30 degrees Celsius. Even two hours before opening, eager shoppers lined up for the luxury stores. Those at the front of the line had cardboard boxes and plastic chairs, suggesting they had camped out overnight. Some tourists from China used their luggage as makeshift tables, sharing snacks and drinks while chatting. The number of people waiting, initially around ten, grew to a line of about 20 meters as opening time approached.

At 10:30 a.m., when the store opened, customers quickly dispersed to the Chanel, Van Cleef & Arpels, and Tiffany & Co. sections.

The ongoing luxury shopping rush, despite the heat and rain, is driven by a series of price increases from luxury brands since the beginning of the year, with further hikes anticipated in the second half. Concerns are growing that brands that have already raised prices may do so again this year.

In fact, online luxury communities have seen discussions about the possibility of additional price increases from Chanel, which raised prices on July 14. One user expressed concern, stating, "The price of the Chanel 25 mini bag increased from 9.9 million won to 10.2 million won. I wonder if it will go up again this year."

French high-end jewelry brand Boucheron is also set to raise prices by about 7% on July 22. The basic model of the popular 'Quatre Classic Wedding Band' among newlyweds will rise from 3.25 million won to approximately 3.48 million won. The XS size of the 'Serpent Bohème Pendant,' currently priced at 5 million won, may increase to around 5.35 million won.

The trend of luxury brands raising prices has become so common that it is referred to as 'N-time increases.' Since the beginning of the year, brands like Rolex, Hermès, and Cartier have raised prices, followed by Tiffany & Co. in February and Van Cleef & Arpels in March. Chanel, Bulgari, and Chaumet have also joined the price hike trend. Notably, Cartier adjusted prices again in May after a January increase, with the 'Panda de Cartier Mini Steel' and 'Cartier Tank Française Small' rising from 6.55 million won to 6.9 million won. The 'Benoit Bangle Mini' increased from 24.7 million won to 27.3 million won, while the 'Benoit Mini Full Pavé Bangle' jumped from 97 million won to 105 million won.

A luxury industry insider noted, "On weekends, even if you register for the open run, the number of people is so high that it’s common to enter the store late in the afternoon or for reservations to close early. In the past, staff would say, 'Now is the best time to buy luxury goods,' but now customers are the ones saying it first."

Another insider mentioned that young couples preparing for weddings are increasingly visiting luxury brands to choose wedding bands, leading to rapid closures of weekend registration slots.

Experts believe that the price increases in luxury goods will not immediately lead to a decrease in demand. Instead, rising prices may enhance the allure of exclusivity and status, stimulating consumer desire.

Lee Young-ae, a professor of consumer studies at Incheon University, stated, "Unlike regular products, luxury goods experience the 'Veblen effect,' where consumer desire increases as prices rise. As prices go up, the rarity of ownership is emphasized, fulfilling the desire to showcase superiority over others. Luxury brands must continue to stimulate consumer desire to maintain their value, so the trend of price increases is likely to continue for the foreseeable future."