One Month Since Launch of Shopping Integration Platform 'Lotte ON'
Customer Complaints Due to Insufficient Stabilization Efforts
Settling In by Emphasizing Strengths in Delivery Service
[Asia Economy Reporter Seungjin Lee] Lotte On, the core growth engine of Lotte Shopping, marked its one-month anniversary on the 27th. Although there were some glitches due to system errors in the early days of its launch, it is settling in by emphasizing delivery services such as 'immediate delivery.'
Lotte On is an integrated online shopping platform that brings together seven Lotte Group affiliates: Lotte Department Store, Lotte Mart, Lotte Super, Lotte.com, Lotte Home Shopping, Hi-Mart, and LOBs. Since establishing the e-commerce division in 2018, Lotte invested 3 trillion won over two years to create this platform, leading industry experts to believe it could shake up the e-commerce market landscape.
In the beginning, the high expectations also brought significant disappointments. Continuous system errors caused inconveniences to customers, including search errors, order omissions, and incorrect deliveries. The application was unstable, resulting in some products from certain vendors not being visible to consumers. The lack of integration among the affiliates remains an issue. For example, Lotte Fresh and Lotte Duty Free are still not integrated within Lotte On, requiring users to install separate apps.
There have been achievements. According to Lotte Shopping, the subscription rate for the paid membership service Lotte Owners increased by 36% from April to May. The proportion of customers visiting Lotte On who then browse other specialized stores (department stores, marts, LOBs, etc.) also increased. The company explained that there are now more loyal customers who window-shop around various stores, rather than just purpose-driven buyers who purchase only what they need.
Regarding delivery services, consumers have given positive feedback. The immediate delivery service, which allows customers to receive their online orders within two hours, is popular. At Lotte Mart's Junggye and Gwanggyo branches where this service was introduced, online orders increased by 130% and 175% respectively compared to the previous year last month. Accordingly, Lotte plans to add 16 more Lotte Mart stores capable of immediate delivery within this year and expand to 43 stores by 2021.
Additionally, 'early morning delivery' has been newly introduced, starting in the southwestern Seoul area and expanding to southern Gyeonggi and Busan regions by October. Through this, Lotte plans to accelerate its 'O4O (Online for Offline)' strategy centered on Lotte On. On the 20th, Hwang Gak-gyu, Vice Chairman of Lotte Holdings, visited the Lotte Global Logistics hub construction site in Jincheon, Chungbuk, reinforcing the restructuring of the distribution industry centered on Lotte On.
A Lotte Shopping official stated, "Lotte On underwent many stabilization processes throughout May," adding, "Since we revamped the platform to allow easy upgrades based on consumer feedback, Lotte On will continue to evolve daily."
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