SOUTH KOREA. Lotte Duty Free announced today (12 March) that it has built a hyper-personalised marketing system based on AI and big data, an initiative the company described as a first for the global duty free industry.
The launch of the Marketing Automation System (MAS) follows a successful seven-month trial. MAS is an AI and big data-based system that enables “ultra-precise marketing” for each customer instead of simple repetitive marketing targeting an unspecified number of consumers.
The seven-month pilot operation showed customer inflow to be more than six times more effective than the existing system. The success rate for inducing additional purchases was close to 75%.
The development represents the fruition of new Lotte Duty Free CEO Kim Ju-nam’s mission to make data-based digital empowerment a top priority.
In his New Year’s address to management and employees shortly after taking office on 19 December, Kim said, “As a leading global duty free retailer, we must lead innovation and change through digital transformation. This will be the heart of our company over the next ten years.”
Lotte Duty Free, the Republic’s number one travel retailer and world number two, described MAS as “the first fruit” of the mission. The retailer’s strategy with MAS is to attract customers and increase sales via a programme that maximises shopping benefits.
Until now, event information has been focused on sending messages containing basic customer information such as membership level and departure schedule. By contrast, MAS comprehensively analyses not only this basic information, but also granular indicators including:
* The characteristics of products purchased by customers
* Dwell time on each page
* The event response rate
MAS also provides event information to reflect each customer’s taste.
The seven-month pilot operation showed customer inflow to be more than six times more effective than the existing system. The success rate for inducing additional purchases was close to 75%.
Up close and personal
Lotte Duty Free plans to introduce more segmented personalised marketing by increasing the current 80 types of customer behavior-based personalised marketing scenarios to 200 by 2025.
Shopping convenience for overseas customers has also been improved. Starting with the establishment of MAS, Lotte Duty Free linked overseas social media channels such as Whatsapp and WeChat, and expanded the number of countries goods could be shipped to from 5 to 13.
In the future Lotte Duty Free intends to carry out marketing for non-member customers by upgrading the system. In June 2022, the company entered into a big data alliance with leading companies in other industries, including KB Kookmin Card, T-Map Mobility and Lotte Department Store to participate in a data-fusion platform based on customer consent.
Becoming smarter
Lotte Duty Free said it is stepping up its digital transformation in all business areas to become a “smart duty free retailer”.
Last November it launched the ‘Omni Service’, an integrated online and offline channel shopping service that encompasses product information checks, store visit reservations, and a mobile self-payment function before visiting a store. This platform is being introduced at the company’s downtown stores in South Korea.
The company plans to expand the service to airport stores and provide a differentiated shopping experience targeting customers who have not yet purchased products online.
Additionally, during the first half of this year, Lotte Duty Free plans to introduce ‘Digital Distributed Identity’ (DID) for the first time in the industry, a development that allows customers to purchase duty free goods through smartphone authentication and without a physical passport. ✈
