"Lotte Duty Free Targets Personal Interests with AI for Hyper-Personalized Marketing"

"Data-Driven Digital Capability Enhancement as Top Priority"
New Marketing System MAS Pilot Operation Completed and Opened
Customer Inflow Increased 6x, Additional Purchase Induction Success Rate 75%

Kim Joo-nam, CEO of Lotte Duty Free, is emphasizing the importance of strengthening digital capabilities to employees during the anniversary event held in mid-last month.
[Photo by Lotte Duty Free].

Lotte Duty Free announced on the 12th that it has established the world's first ultra-personalized marketing system based on artificial intelligence (AI) and big data in the global duty-free industry.

This year, Lotte Duty Free included strengthening data-driven digital capabilities as one of its top priorities in its business portfolio. Shortly after his appointment, Kim Joo-nam, CEO of Lotte Duty Free, emphasized to employees, "As a global leading duty-free shop, we must lead innovation and change through digital transformation," adding, "This will become the heart of our company responsible for the next 10 years."

Lotte Duty Free stated that it has achieved initial results through its Marketing Automation System (MAS). MAS is an AI and big data-based system that enables ultra-precise marketing targeting individual customers, moving away from simple repetitive marketing aimed at unspecified masses. Lotte Duty Free’s strategy is to increase customer inflow and sales through this system.

Previously, Lotte Duty Free’s marketing was centered on sending messages based on basic customer information such as membership grade and departure schedule to guide events. However, MAS comprehensively analyzes detailed indicators such as the characteristics of products customers have purchased, time spent on each page, and event response rates, providing event information tailored to each customer's preferences at the optimal time. After a seven-month pilot operation, customer inflow was found to be more than six times higher compared to the previous system. The success rate of inducing additional purchases reached 75%. Lotte Duty Free plans to expand the 80 types of customer behavior-based personalized marketing scenarios to 200 by 2025, offering even more segmented personalized marketing.

Shopping convenience for overseas customers will also improve. With the establishment of MAS, Lotte Duty Free additionally integrated overseas social media channels such as WhatsApp and WeChat. The target countries for message delivery have also expanded from five to thirteen.

Lotte Duty Free plans to conduct marketing targeting non-member customers through system advancement. Since June last year, Lotte Duty Free has joined a 'big data alliance' with leading companies from other industries such as KB Kookmin Card, T Map Mobility, and Lotte Department Store, participating in a customer consent-based data fusion platform.

Meanwhile, since November last year, Lotte Duty Free has launched an integrated online-offline shopping service called 'Omni Service' at its downtown stores, allowing customers to check product information, make store visit reservations, and perform mobile self-checkout before visiting the store. The service will be expanded to airport stores in the future to provide a differentiated shopping experience targeting customers who have not purchased products online. In the first half of this year, Lotte Duty Free plans to introduce 'Digital Distributed Identity (DID),' enabling duty-free purchases with smartphone authentication only, without a physical passport.

Lotte Duty Free accelerated its digital transformation by participating in the world's largest electronics and IT exhibition (CES) for two consecutive years, becoming the first duty-free shop worldwide to do so. A view of the Lotte Duty Free booth at CES 2023 in January [Photo by Lotte Duty Free].