Korean Retail Executive Discusses AI's Role in Enhancing Efficiency and Customer Value

"AI is a crucial tool for overcoming traditional trade-offs," said Lee Tae-hee, head of operations strategy at Kurly, during a presentation at the 17th Consumer Policy Forum hosted by Ajou Economic Daily at the Korea Press Center on June 25. He emphasized that in an increasingly cost-burdened retail environment, AI will be essential for enhancing both customer value and operational efficiency.

Since launching Market Kurly, South Korea's first early-morning delivery-based online grocery service in 2015, Kurly has led the online transformation of the domestic food market. The company has expanded its delivery services beyond the Seoul metropolitan area to key regions including Chungcheong, Daegu, Busan, and Gwangju. Lee noted that last year, Kurly's transaction volume reached 3.5 trillion won, a 13.5% increase from the previous year, and the company recorded its first annual operating profit of 13.1 billion won.

He attributed this turnaround to diversification of services, expansion of the customer base, and improvements in logistics efficiency. New ventures, such as the beauty platform Beauty Kurly and Kurly N Mart, have also become significant growth drivers.

However, Lee acknowledged that new challenges have emerged. He pointed out that labor costs, logistics expenses, and product costs continue to rise, while consumer price sensitivity is leading to a shift towards value-oriented channels. He added that the need for new operational processes and infrastructure across different business segments is increasing investment burdens.

As a solution to these issues, Lee proposed the use of AI. He explained that AI can create a structure where costs do not increase linearly, even as the number of managed items grows. He highlighted that Kurly's accumulated data on customers, products, demand, and logistics over more than a decade is a competitive asset that rivals would find difficult to replicate in a short time.

Lee emphasized that Kurly is already applying AI across its operations. In the customer acquisition and product exploration stages, creative AI is used to generate detailed product descriptions, while AI search solutions enhance search quality and shopping cart conversion rates. In the product receiving and order processing stages, AI-driven ordering and inventory management, AI sorting machines, and autonomous robots have been implemented.

"By suggesting optimal orders based on sales, receiving, and inventory data, we are reducing stockouts and waste," Lee said. He also noted that deep learning-based sorting solutions and camera sensor scanning are improving the efficiency of fresh produce inspections. Autonomous robots are currently being tested in logistics centers, with expectations of a 30% improvement in productivity.

Lee concluded, "The direction of AI operational innovation is to enable tasks that were previously impossible and to create new customer value. It is important to focus on where we should concentrate our efforts and to maintain sustainable growth through better perspectives."