Lotte Starts Combining Data from Its Subsidiaries That Deal with Distribution

Dec 13, 2017

Lotte is planning to combine data from merchandises of its major subsidiaries that focus on distribution. Its strategy is to enhance ‘omni-channel’ that provides same shopping experiences regardless of where and when one shops. It is looking for synergy from a group perspective by unifying information on merchandises that is spread out amongst its subsidiary.
According to distribution industries on the 12th, Lotte started combining information on merchandises and category classification systems that belong to its major subsidiaries. Lotte started its task force that will lead such work. Since the second half of this year, this task force started combining data from back offices (departments that do not deal with customers directly) including inventories and orders from Lotte’s subsidiaries. Starting from next year, it is going to combine management systems of merchandises from each subsidiary on full-scale.
Starting from 2018, Lotte is going to combine classification systems of merchandises from Lotte Department Store. Starting with Lotte Department Store that has the most merchandise out of all subsidiaries, Lotte is planning to combine data from Lotte Home Shopping,, and Lotte Mart sequentially. Data from multichannel such as Lotte Mart, TV Home Shopping, online mall, and T-Commerce of Lotte Department Store will be combined into one data. Lotte even selected an outside solution management company that will convert data of merchandises from its subsidiaries into a comprehensive system.
“We are going to start converting data of merchandises from Lotte Department Store into a comprehensive system first.” said a representative for Lotte Holdings. “We will be able to create various synergies by combining data from each subsidiary.”

A customer is trying on a product at a fur coat store located at Lotte Department Store.
<A customer is trying on a product at a fur coat store located at Lotte Department Store. >

After securing comprehensive data, Lotte is planning to establish a next-generation distribution model that combines Big Data and artificial intelligence (AI). Lotte set up a roadmap for establishing AI-based platforms in all groups within next five years. It is going to focus on quickly expanding its knowhow in offline distribution towards online distribution and distribution through mobile devices. It is expected that Lotte is also looking to increase overall sales of its subsidiaries by combining database (DB) from its customers.
Industries predict that Lotte is planning to establish a comprehensive shopping channel that combines all online shopping malls managed by its subsidiaries. It is similar to ‘’ operated by Shinsegye. Since many years ago, Lotte was thinking about establishing a comprehensive online and mobile shopping mall.
Lotte is South Korea’s biggest distributor that has 33 department store, 120 large markets, and 9,200 convenient stores in South Korea. Not only Lotte will be able to understand consumers’ patterns on consumption in just one glance if it combines information from each subsidiary but it will also be able to carry out various comprehensive promotions and marketing. Depending on direction of its management, it is going to use these information as basis for its comprehensive online shopping mall or for new O2O (Online to Offline) services.
“Lotte is promoting its ‘omni-channel’ that is centered on its customers as an important capability for its distribution business units (BU).” said a representative for a distribution industry. “Comprehensive data system will become a foundation for omni-channel service.”
Connection between subsidiaries of Lotte is expected to have significant impact on many manufacturers such as Samsung, LG, and CJ on top of its competitions. When Lotte’s subsidiaries carries out co-merchandise sourcing (foreign purchase) by forming ‘one Lotte’, Lotte will be able to have strong bargaining power when securing supplies.
Staff Reporter Yoon, Heeseok |

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