Lotte Department Store Uses AI to Analyze More Than 4,000 Brands, Supporting MD Decision-Making

[Financial News] Lotte Department Store is using artificial intelligence (AI) to analyze data from more than 4,000 brands and support merchandise planning (MD) strategy development.
According to Lotte Department Store on the 26th, it built an internal brand analysis system called Brand AI at the end of last month and has already put it into use. The platform uses AI to analyze scattered brand data, show sales trends and relationships between brands, and support major decisions such as store openings and closures.
Its flagship feature, the 3D Network Graph, places tenant brands as nodes and connects them based on purchase relationships and other factors to visualize brand relationships and competition. Brand DNA presents key indicators such as sales for a specific brand and up to five comparison brands in a radial graph, allowing users to see their relative position within a product category.
In the AI Report, which analyzes individual brands, customer indicators such as age and gender are linked to sales data and displayed on a dashboard. AI Insight cross-analyzes multiple data sets to identify characteristics and implications that are difficult to detect from individual indicators alone.
Lotte Department Store said Brand AI recorded a 70% reaccess rate over the month following its introduction. A user survey also found that productivity more than doubled compared with similar previous tasks.
In the second half of the year, the company plans to add a conversational chatbot function. Users will be able to ask questions in natural language, such as "the top 20 brands by share of customers in their 20s," and the system will find the relevant data. It also plans to introduce an API-based real-time web search function so that external market trends can be analyzed as well.
Brand AI also incorporates the Data Ontology concept that Lotte Department Store is building across the company. The approach connects distributed data on customers, brands, stores and other elements so AI can understand and analyze relationships between information.
Choi Seong-cheol, head of AI Studio at Lotte Department Store, said, "AI in retail is evolving beyond simple task automation into a stage that supports strategy design." He added, "We plan to expand AI use cases such as Brand AI, where employees can directly feel the benefits in their work, and continue introducing technologies that can raise company-wide productivity."
[email protected] Lee Jeong-hwa Reporter