Anyone who has done a spot of shopping in South Korea will find themselves spoilt for choice. There is one name however, that is etched on minds of most Koreans: LOTTE.
Among LOTTE group’s four sectors, retail is one of its most recognisable. The multi-conglomerate’s retail arm has been the number player in South Korea's retail industry since the 1970s, but more than that perhaps, is the impact that its innovative spirit has had on Korean retail industry as a whole.
Having conquered Korea, so to speak, LOTTE is now setting its sights on the rest of Asia and the world.
The reach of LOTTE Retail
LOTTE retail boasts various subsidiary companies, including LOTTE Department Store, Hyper Market LOTTE Mart, Super Market LOTTE Super, LOTTE Himart, an electronic appliance store, LOTTE Homeshopping, a television home-shopping channel, LOTTE e-commerce, LOTTE Cultureworks, which operates film & theatre business, Korea Seven, Korea’s 7-Eleven convenience store business, LOHB's, specialising in health and beauty, LOTTE Members, a membership service mainly focused on big data, the SPA brand, essentially the Korean business of the world-famous UNIQLO, and MUJI’s household goods brand.
One obvious advantage of scale is accessibility. The company boasts over 11,320 retail stores in Korea. The variety is endless: 60 LOTTE Department Stores and outlets, 126 LOTTE Mart, LOTTE Super and LOTTE Himart, both online and offline, as well as LOTTE Homeshopping and LOTTE e-commerce.
All to say, consumers can find LOTTE anytime, anywhere, and LOTTE has become an integral part of people’s everyday routine. In fact, one could easily bump into a LOTTE sign or walk into a LOTTE store in Korea without even looking for it.
Focusing on Asia, Localisation is key
LOTTE Retail is now looking to replicate its success in Korea in greater Asia.
LOTTE Department Store is expanding its presence in Russia, Vietnam and Indonesia.
Meanwhile, LOTTE Mart and LOTTE Cultureworks, Movie Investment Distribution and Theatre Business, riding on the current ‘Korean wave’, have both found success in Vietnam and Indonesia. LOTTE Mart, for example, boasts 14 stores in Vietnam and 50 stores in Indonesia.
Why is LOTTE succeeding in the global market? One word: localisation. The company realises that understanding what the general customer doesn’t suffice in a region as diverse in APAC, it also needs to dive deeper into what customers in specific countries and segments need and want.
LOTTE’s strategy in Indonesia illustrates this. The company found that Indonesian customers are buying for present satisfaction rather than future investment, thus a competitive price point is a priority for many households, especially when it comes to purchasing food and household necessities.
LOTTE collaborated with Indonesian companies to develop good quality products that are at lower price points thru its product line, Choice L.
In addition, LOTTE's L.POINT mileage service allows consumers to accumulate points on every purchase they make, which can then be redeemed for award or be used in their future purchase. This service clocked a high response rate, helping LOTTE secure loyal customers.
Riding on the ‘Korean wave’ sweeping through APAC, LOTTE Mart has also created an ‘international zone’ that exhibits and sells popular Korean products.
Naturally, localisation extends to LOTTE’s company CSR initiatives. The company has installed rainwater harvesting facilities in areas where drinking water is scarce.
Leading Service, Evolutionary Retail
South Korea’s tech-oriented retail is well known. As a leader in the field, LOTTE Retail is constantly evaluating, revamping and innovating its production and distribution models to ensure the right products are reaching the right audiences in an effective manner.
In the last decade, it has introduced new distribution channels, store formats, expanded online mobile shopping and developed various on- and off-line services such as a smartphone simple payment system that can be paid by sound waves and bar codes in stores.
Utilising augmented reality technology, LOTTE Department Store provides 3D fitting machine services that allow users to ‘try on’ clothes without having to physically go in and out of them. A recently-launched service includes 'L-Bot', an AI robot shopping guide to make shopping more efficient and convenient.
Korea Seven, the Korean spin-off of the popular 7-Eleven stores operated by LOTTE, recently launched 'Seven Eleven Signature’, an unmanned convenience store featuring state-of-the-art technologies such as adult authentication system, hand-pay system, which enables authentication and payment by recognising patterns such as venous vessel thickness or shape through intravenous authentication, and a smart gate to admit only pre-registered customers.
LOTTE Homeshopping also introduced ‘Finger Shopping’, an AR and a VR service centre allowing users to experience products and purchase them using VR and AR technologies.
When visitors visit a brand’s online store, they have the option to place a product in any space they want by using 3D screens, and consult with chatbots on mobile. While the ‘AR View’ function allows one to see if certain home and furniture fit a space, the ‘VR Street’ service allows customers to shop as if they’re in the store.
Other shopping experiences offered by LOTTE include ‘Smart Pick’, an advanced version of click and collect, ‘Dawn Delivery’, which allows orders to be delivered before 7am the next day, and ’Charlotte’, an AI shopping advisor.
As a response to the eco-trend, 50% of gift packages at LOTTE’s stores will be recyclable by 2023. The aforementioned ‘Smart Pick’ initiative was also born of a concern for waste-having consumers pick up items is an effective way to help reduce packaging and carbon footprint. The company will continue to investigate ways to minimise vehicle emissions and waste packaging during the delivery of goods, as well as ways to reduce food waste at different production stages.
Tastes change, trends come and go, and market evolve, but there is no doubt that LOTTE, with its innovative spirit, flexibility and robust infrastructure will continue to succeed in these ever-evolving times.