[Edaily Reporter SHIN MIN JOON ] South Korea’s “Big Three” department stores are accelerating service innovations using artificial intelligence (AI). AI services go beyond product recommendations tailored to customer preferences and spending patterns to include digital shopping services such as virtual try-ons. The Big Three are also seeking to maximize customer satisfaction by integrating AI into the operations of partner stores—which serve as the frontline of customer interaction—and into employee workflows.

According to the department store industry on the 29th, South Korea’s top three department stores are actively pursuing AI-based service innovation. First, Lotte Department Store recently introduced the “AI Biz Center,” an Agent AI dedicated to partner companies—a first for the domestic department store industry. The AI Biz Center utilizes AI technology to streamline the store’s vendor onboarding and consultation processes.

Lotte Department Store developed this service to address the issue where emerging brands with strong customer demand struggle with complex entry procedures or miss out on opportunities.

Lotte Department Store is also enhancing its AI services. In particular, the company has focused on addressing customers’ concerns before they even begin shopping. Through a service based on the global AI platform ChatGPT, Lotte Department Store has enabled customers to look up branch and store information simply through conversation, without having to install a separate app.

ChatGPT is linked to the Lotte Department Store website, allowing customers to access additional information. Lotte Department Store also operates “CellFit,” an AI virtual fitting service. CellFit enables customers to virtually try on clothes without having to visit a store in person. The service applies AI rendering (image synthesis) technology to new products from various brands.

Shinsegae Co.,Ltd is focusing on providing AI-based customer analytics services. Shinsegae Co.,Ltd plans to introduce “AI Sales Agent,” a hyper-personalized analytics service, in the first half of next year. Hyper-personalized analytics utilizes AI, machine learning, and real-time data analysis to deeply understand customer behavior, situations, and context, predict future preferences and needs, and provide tailored experiences.

An “AI Sales Agent” refers to a business-oriented AI analytics tool that analyzes sales floor data in real time to support the development of customer profiles, purchasing patterns, product management, and promotional strategies. Based on this, Shinsegae Co.,Ltd will be able to formulate more sophisticated customer marketing and sales strategies.

Shinsegae Co.,Ltd has been researching and developing hyper-personalized analytics technology since signing a business agreement with Seoul National University’s Graduate School of Data Science in January of last year. The research focused on building “AI-ready data”—processing approximately 200 million online and offline shopping data points so that AI can learn from them.

Preliminary simulations conducted by Shinsegae Co.,Ltd based on these research findings indicated that applying hyper-personalized analytics technology could increase average transaction value by up to 46%. Previously, Shinsegae Co.,Ltd became the first in the domestic department store industry to introduce the AI customer analytics system “S-Mind” in 2017, followed by the launch of the AI chatbot “S-Bot” in 2019.

HYUNDAIDEPARTMENTSTORECO.,LTD is concentrating on AI services that customers can directly experience. A prime example is “Heidi,” a generative AI shopping assistant launched in June of last year—the first of its kind in the Korean department store industry. Heidi analyzes customers’ tastes and interests to recommend △brands △pop-up stores △restaurants △cultural content, and provides shopping routes and real-time store information tailored to their inquiries.

As of last December, an average of about 2,000 customers per day used the service. Over the past six months, more than 200,000 people have used “Heydi.” By linking with the official online mall, The Hyundai.com, “Heydi” also enables an omnichannel shopping experience where customers can make online purchases from within the store.

HYUNDAIDEPARTMENTSTORECO.,LTD also operates “Partners Plus,” an AI assistant that provides information support exclusively to tenant partners, and “Canary,” an AI program for checking product labeling. By leveraging AI to automate the verification of product labeling for tenant brands—a task previously performed manually—Canary has not only reduced the time required for this work by up to 80% but also improved accuracy.

An official in the domestic department store industry stated, “AI is becoming not just an option but a necessity across the entire domestic industry, not just in retail,” adding, “Going forward, how effectively department stores utilize AI in their services will be a key factor determining their competitiveness.”