Lotte Department Store Leverages AI to Analyze 4,000 Brands, Boosts Productivity

Lotte Department Store is utilizing artificial intelligence (AI) as a 'productivity partner' that aids decision-making and analysis beyond mere efficiency improvements.

According to Lotte Department Store, the company established an in-house AI system called 'Brand AI' at the end of last month to analyze over 4,000 brands. This brand analysis platform interprets and processes various data necessary for developing merchandise (MD) strategies, providing visualized information.

Brand AI connects data previously scattered across individual brands, allowing for a comprehensive view of brand performance trends and purchase correlations among brands. Its key feature, the '3D Network Graph,' visualizes participating brands as nodes and displays connections based on purchase relationships, illustrating the network among brands.

The platform also includes a 'Brand DNA' feature that allows users to compare up to five similar brands. It presents key metrics, such as sales figures, in a radial graph format, enabling users to assess the relative position of a brand within its product category and compare it with competitors.

For in-depth analysis of specific brands, the 'AI Report' provides a dashboard linking customer metrics, such as age and gender, to sales data. Additionally, 'AI Insights' offers data-driven implications.

The practical application of Brand AI is rapidly increasing. In the month following its implementation, the re-engagement rate reached 70%. User surveys indicated that productivity improved by more than double compared to similar tasks.

In the second half of the year, Lotte plans to add a conversational chatbot feature to Brand AI. Users will be able to input queries like, "Show me the top 20 brands by customer composition in their 20s," and receive analyzed results. An API-based real-time web search function will also be introduced, allowing for analysis of both internal data and external market trends.

Choi Sung-cheol, head of Lotte Department Store's AI Studio, stated, "We plan to continuously introduce technologies that can enhance overall productivity by expanding AI use cases that can be felt in the field."

Meanwhile, Lotte is accelerating its company-wide artificial intelligence transformation (AX). Shin Dong-bin, chairman of Lotte Group, attended the 'CEO AI Academy' in June to review the group's AX strategy and emphasized the need to support all employees in developing AI agent capabilities for innovative changes in work methods.