South Korean retail giant Lotte Group said Wednesday that it will build a new shopping assistance chatbot using IBM’s artificial intelligence system Watson with an aim to provide customized shopping support to customers.

Lotte signed a partnership with IBM Korea in Seoul on Wednesday, agreeing to adopt the US tech giant’s cognitive computing software for use by Lotte’s various retail and consumer goods units, including the Lotte Department Store.

“Faced with a rapidly changing business environment, we decided to implement IBM’s Watson to create new value and prepare for the future” said Hwang Gak-kyu, President of Policy Coordination at Lotte.

Using IBM’s Watson, Lotte is planning to build a “smart shopping advisor” -- a chatbot which will communicate one-on-one with consumers, guiding them from the product recommendation and purchase stage to delivery and pickup.

For example, a customer could ask the chatbot: “It’s my 12-year-old daughter’s birthday next week. My daughter is interested in books and fashion. What present should I get her?”

The chatbot would then analyze the customer’s personal information as well as recent trends on social media and the news to recommend the right item for the occasion. It would also provide information on where and how to purchase the given product.

Lotte plans to introduce a similar digital shopping assistance service at its offline retailers as well, considering most in-store customers prefer to look around on their own rather than be physically assisted by an employee.

In addition, the Korean conglomerate plans to apply IBM’s artificial intelligence technology toward building a “smart decision-making support platform” for adoption by Lotte’s food and snack production units.

IBM’s Watson will analyze diverse market research data as well as a given company’s sales records to help determine what kind of new product of service a particular firm should pursue, Lotte said.

This new AI-based decision-making support solution will be built by Lotte’s IT service unit Lotte Data Communication and Lotte Members will take charge of the needed data analysis. Lotte aims to apply this solution to all group affiliates within the next five years.

By Sohn Ji-young (jys@heraldcorp.com)