Hyundai Livart is converting stores of its kitchen furniture brand ‘Livart Kitchen’ into ‘Livart Kitchen Plus,’ a win-win type showroom, in a move to strengthen its kitchen furniture business. The strategy is to boost sales capabilities by offering incentives to competitive dealers, while at the same time expanding the kitchen furniture sales network.
‘Livart Kitchen Plus’ is a new-concept win-win showroom in which Hyundai Livart bears the full initial investment costs—such as the rental deposit and store interior costs required when an individual business owner opens a dealership—as well as all store operating costs, including monthly rent, store management fees, and promotional expenses.
Hyundai Livart, the total interior company under Hyundai Department Store Group, will convert 13 ‘Livart Kitchen’ stores nationwide into ‘Livart Kitchen Plus’ by the end of this year, starting with the ‘Livart Kitchen Plus Gwangju Store,’ which opened on April 4 in Chipyeong-dong, Seo-gu, Gwangju.
Earlier, after opening the ‘Livart Kitchen Plus Nonhyeon Store,’ the first win-win showroom, in December last year, Hyundai Livart is starting with this Gwangju store and, in May, also plans to convert its Seoul Dogok store into a ‘Livart Kitchen Plus.’ When the company converts, within the year, the 10 ‘Livart Kitchen’ stores currently operating inside directly managed ‘Livart Style Shop’ locations—such as Yongsan and Changdong in Seoul, and Bundang and Suwon in Gyeonggi—into ‘Livart Kitchen Plus,’ it will have established a total of 13 win-win showrooms.
Going forward, ‘Livart Kitchen’ stores inside directly managed ‘Livart Style Shop’ locations set to newly open in areas such as Gangseo in Seoul and Busan will also be introduced as win-win showrooms.
‘Livart Kitchen Plus’ is establishing itself as a mutual win-win model for both the head office and the resident dealers, as there is no burden of initial investment or store operating costs, and its location in prime commercial districts also draws large numbers of customers.
In addition, another major advantage for dealers is that the ‘directly managed store management method,’ in which a sales and a construction staff member (one each) exclusively handle one showroom, is applied to ‘Livart Kitchen Plus’ stores. Because customer requests—such as changes to construction dates—can be handled within one hour, dealers are able to focus more on sales.
A Hyundai Livart official said, “In the case of the five dealers resident at the Livart Kitchen Plus Nonhyeon Store, they draw about three to five times more visiting customers than a typical dealer store (around 99㎡ in area), and the probability of visits leading to contracts after entry is also high, so their sales are about five to seven times higher than those of typical dealers.”
To strengthen its kitchen furniture business, Hyundai Livart plans not only to expand ‘Livart Kitchen Plus’ but also to expand its dedicated kitchen furniture construction teams. As of the first quarter of this year, the company has 150 teams and plans to increase this to around 200 by the end of the year. In addition, since the second half of 2017, to strengthen its kitchen furniture business, it has been greatly expanding its sales network by broadening its sales strategy from the existing sales centered on directly managed stores and dealers to interior specialty stores. The sales network grew from 1,200 last year to 1,500 in the first quarter of this year alone.
Lee Jong-ik, head of Hyundai Livart’s Kitchen Business Division (executive director), said, “Hyundai Livart is strengthening its kitchen furniture business as part of the expansion of its B2C business,” adding, “Going forward, we will actively foster competitive kitchen furniture dealers and continue to develop a win-win business model in which Hyundai Livart and dealership owners mutually benefit.”
Meanwhile, the Livart Kitchen Plus Gwangju Store, which opened on the 4th, is a win-win showroom introduced by Hyundai Livart in a metropolitan commercial district and is located in the Sangmu district, the largest commercial area in Gwangju. Spanning 307㎡ on the first floor above ground, it displays a total of about 10 product lines, ranging from premium products in the 10-million-won range such as Authentic and Pinot Noir to products in the 2-million-won range.