Stores start incentive war

The nation's major department store chains are aiming for a bigger share of the retail market by offering shoppers a no-interest installment-payment plan, a business model that local car dealers and mail-order companies have been using for years.

Department store retailers such as Pacific Sogo Department Store (太平洋崇光百貨) and Shin Kong Mitsukoshi Department Store (新光三越) are implementing the strategy to help prompt consumers to make purchases, especially of high-priced goods, retailers said.

"This strategy will help boost sales of luxury brands, which we estimate will amount to NT$200 million in sales during our 12-day anniversary sale," Sogo's customer service manager, Nancy Ting (丁立貞), said yesterday.

Sogo started its anniversary sale yesterday. The retailer's store on Chunghsiao East Road, typically the most profitable outlet of the four-store chain, is expected to generate NT$300 million in sales on the first day, Ting said.

"We hope to attract up to 150,000 people daily and create a turnover of NT$2 billion solely at the Taipei store," Ting said. The retailer is targeting a total anniversary sale revenue of NT$3.6 billion from its four outlets nationwide, with the Taipei store contributing some 56 percent of it.

Shin Kong, the nation's largest department store chain with ten outlets, has seen good results from its zero-interest installment program during its recently-finished anniversary sales earlier this week.

"According to statistics provided by our outlet on Nanking West Road, which finished its anniversary sale on Nov. 2, sales backed by the installment incentive accounted for 10 percent of total turnover," said Shin Kong's sale promotion assistant manager Shauna Lee (李香萩).

"This program has served as an effective method of stimulating sales of high-priced brands and household appliances," Lee said.

Female customers are the retailers' main target because they prefer to buy specially-priced cosmetics during the sales. Sogo, for instance, aims to generate NT$0.6 billion solely for cosmetics, according to Ting.

Vicky Tseng, a 24 year-old university graduate, bought around NT$10,000 worth of cosmetics at Sogo yesterday. Tseng said she likes to shop at Sogo because the retailer provides customers with one-stop shopping convenience.

"The selection of cosmetic brands here is versatile and I don't need to shop at other places," she explained.

Leslie Tseng, a 28 year-old stewardess who spent NT$20,000 yesterday at the Shin Kong outlet in Hsinyi district, said that the installment plan offered by the department store would effectively encourage customers to shop.

But as more department stores are beginning to offer this kind of service, Tseng said retailers may need to initiate other incentives to attract customers and to stand out in this line of business.

Shin Kong is holding its anniversary sale at its Hsinyi stores through mid-November.

The retailer saw sale of NT$1.2 billion on its first day, said Lee.