Lotte Innovate builds AI-powered brand management system for Lotte Department Store

An AI-powered system for comprehensively managing and analyzing customer and store data across department store brands is now in place.

Lotte Innovate announced Tuesday that it has built "Brand AI," a brand data analytics system for Lotte Department Store, using AI and data technology.

Brand AI is an AI work platform that applies an ontology-based data architecture to connect and structure diverse retail data — spanning roughly 4,000 brands along with sales, customer and purchasing information — in line with business context.

A key feature is its ability to analyze not just individual figures but also the relationships and characteristics among brands, supporting merchandise planners' decisions on store openings and closings and brand sourcing.

Lotte Innovate links each brand's sales, customer profiles and cross-purchase data in a graph structure, then uses that foundation to analyze brand similarity and purchasing relationships.

Results are visualized as 2D and 3D network graphs, letting staff intuitively grasp the relationships among brands and their positioning in the market.

The platform also features a "Brand DNA" function for comparing individual brands. Brand DNA organizes a brand's growth potential, customer profile and sales scale into six core indicators, normalizing each on a scale of 0 to 100 to enable side-by-side comparisons. Results are presented as a radar chart.

The platform's generative AI features incorporate large language model and retrieval-augmented generation technology, enabling the AI to search and reference relevant data. Generated insights can be managed in a structured format. The company said it factored in data security by replacing sensitive figures such as sales amounts and customer counts with ratings or ratios rather than actual values.

Lotte Innovate also built out integrations with internal systems, data management infrastructure and an operating environment to provide a stable service foundation for day-to-day use of Brand AI. The company handled the entire process, from data construction and AI analysis through to service implementation and operation.

"This project is significant in that we combined Lotte Department Store's merchandising expertise and on-the-ground experience with Lotte Innovate's ontology and AI technology to build a service with high practical utility," said Jeon Seung-nyeong, executive director of Lotte Innovate's D&AX business division. He added that the company would "continue to expand industry-specific data and AI services to support our clients' operational innovation and strengthen their competitiveness."

Meanwhile, Lotte Innovate is expanding its design-build-operate business and responding to AI transformation demand from group affiliates. The company is also supporting the digital transformation of group subsidiaries through its proprietary AI platform "iMember."