Lotte Department Store launches in-house AI system to scout next big brands

AI has arrived at the heart of department store operations: brand and merchandise planning.

Lotte Department Store announced Wednesday that it deployed an in-house AI system called Brand AI in July, rolling it out to frontline merchandising staff. The system analyzes more than 4,000 brands and is designed to sharpen data-driven decision-making on key moves such as bringing brands in or out of stores.

Brand AI is built to give staff a multidimensional view of any given brand. By connecting data that had previously been scattered across individual brand units, the system provides an integrated diagnostic service that tracks not only each brand's performance trends but also how brands influence one another.

Its flagship feature, a 3D network graph, renders every brand in the store as a node and draws connecting lines between them based on factors such as purchase correlations, mapping the relationships across the entire brand ecosystem.

A "Brand DNA" feature compares and analyzes groups of similar brands. Users select a target brand and designate up to five comparison brands; the system then displays key metrics — including sales figures — for each brand on a radar chart, allowing staff to benchmark a brand's relative position within its product category against its closest peers.

An "AI research note" feature provides in-depth analysis of specific brands. A single click surfaces customer metrics such as age and gender breakdowns alongside linked sales data. The feature also includes an "AI Insights" function that surfaces contextual patterns difficult to detect from individual figures alone.

In the month after launch, Brand AI recorded a 70 percent return-visit rate. A user survey found that the system more than doubled work productivity compared with existing tools for similar tasks.

Lotte Department Store plans to add a chatbot function to Brand AI in the second half of the year, enabling conversational access to its core features. The company will also integrate an API-based real-time web search capability to help staff track external market trends.

"AI in retail is evolving beyond simple task automation into a stage where it supports strategic planning," said Choi Sung-cheol, head of Lotte Department Store's AI Studio. "We will expand AI use cases that frontline staff can feel the impact of, and introduce technology that drives productivity."