Lotte Innovate said on the 1st that it has built "Brand AI," a brand data analysis system for Lotte Department Store that uses artificial intelligence and data technology.
Brand AI is an AI work platform that applies an ontology-based data framework to connect and structure a wide range of retail data — covering roughly 4,000 brands as well as sales, customer and purchase records — according to business context. Beyond individual figures, it analyzes relationships and characteristics among brands to support merchandisers' decisions on which brands to bring into or remove from stores and on brand sourcing.
Lotte Innovate (286940.KQ) links sales figures, customer profiles and related-purchase data for each brand in a graph structure, then uses that structure to analyze similarities between brands and cross-purchase relationships. Results are visualized as 2D and 3D network graphs.
The company also implemented a "Brand DNA" function for comparing brand characteristics. Brand DNA structures a brand's growth potential, customer profile and sales scale into six core indicators, normalizing each on a scale of 0 to 100 so that brands can be compared. Results are presented in radar charts, and for indicators with wide variation across brands, such as sales scale or average transaction value, the system applies data transformation and outlier adjustment to improve comparability.
The generative AI features draw on large language models (LLM) and retrieval-augmented generation (RAG). The AI searches and references relevant data, then automatically generates a brand's key characteristics and insights within a predefined standard keyword framework. Lotte Innovate also built out links to internal systems, data management and the operating environment, establishing a service foundation for stable use of Brand AI in actual work. The company handled the entire process, from data construction to AI analysis, service implementation and operation.
"This project is significant in that it combined Lotte Department Store's merchandising expertise and field experience with Lotte Innovate's ontology and AI technology to build a service with high usability for frontline staff," said Jeon Soong-nyung, executive director of Lotte Innovate's D&AX business division. "We will continue to expand industry-specific data and AI services to support our clients' business innovation and competitiveness."
