Lotte Department Store has introduced an artificial intelligence system across its merchandising operations, using it to analyze synergies among tenant brands and to scout brands that could drive new trends.
The retailer said on the 26th that it built and deployed an in-house AI system called "Brand AI," capable of analyzing more than 4,000 brands, late last month. The move is aimed at applying AI to merchandising — the department store's core function of brand and product planning — so that data analysis can play a larger role in key decisions such as which stores to open or close.
Brand AI is a system in which the AI analyzes and processes the various data needed to develop merchandising strategy and presents it in visualized form. It pulls together brand-level data that had been scattered, allowing the company to track the performance of individual brands as well as to gauge how brands affect one another.
In the second half of this year, Lotte Department Store plans to add a chatbot function so that users can access the system's main features through conversation. Users would run the program by typing natural-language sentences into a dialogue window, such as "Show me the top 20 brands by share of customers in their 20s."
Beyond merchandising, Lotte Department Store is pursuing an AI shift in areas such as customer service and store operations. The approach connects information scattered across the company so that the AI can understand and reason over the data on its own. "We plan to expand cases of AI use where staff can feel the effects in their work, and to adopt technologies that can raise productivity across the company," a Lotte Department Store official said.
