Lotte, IBM team up on AI effort

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Lotte, IBM team up on AI effort


Hwang Gak-gyu, president of Lotte Shopping, left, and Jay Bellissimo, general manager of IBM Watson Client Experience, sign a partnership at the Lotte Hotel in central Seoul on Wednesday. [LOTTE GROUP]

Your 12-year-old daughter’s birthday is coming and you have no idea what to give her.

Why not ask an artificially-intelligent chatbot smartphone app from Lotte? After hearing her hobbies and interests, it will analyze the latest trends among her age group through social network and news reports and recommend a range of gifts.

The chatbot will tell you where to purchase them. If you place an order online, it will keep track of its delivery status and let you know when the gift is on your doorstep.

Lotte announced on Wednesday that it has joined forces with IBM Korea to introduce Watson, a cognitive computing system from IBM, to provide customized services for individual customers, trustworthy product information and professional shopping advice. The two companies did not disclose the terms of the deal or the exact period of the contract.

The new service will apply to retail subsidiaries such as department stores and supermarket chains and will later form an integrated IT system to be applied to all subsidiaries under the Lotte umbrella - from food to chemicals, tourism and finance sectors - in five years.

“We have decided to introduce IBM’s Watson solutions to tackle the rapidly changing business environment and prepare for the future by discovering value in a new field,” said Hwang Gak-gyu, president at Lotte Shopping. “We hope to offer innovative services to customers with IBM, which has been proceeding with long-term and consistent investment and research in cognitive computing.”

Watson is a supercomputer system based on commercially available IBM Power 750 servers capable of answering questions posed in natural language. It was specifically developed to answer questions on the quiz show “Jeopardy!” and defeated human players in 2011.

Lotte Department Store also plans to use the chatbot for offline shoppers, based on the discovery that they prefer digging up information necessary for shopping on their own rather than being assisted by clerks.

IBM already has experience teaming up with the Macy’s department store chain in the United States to use Watson as a customer service tool in 10 stores. The pilot program has been dubbed “Macy’s On Call,” which allows customers to type in questions on their phones and receive answers. IBM Watson has been programmed to learn over time to give answers customized to individual stores.

Korea’s leading retail chain and IBM will also work on a decision-making platform that will be used for developing new products from bakeries and food affiliates at Lotte.

The artificial intelligence network is set to analyze data from markets and revenue as well as product information contained in the Lotte’s own system.

Lotte Data Communication will be responsible for establishing the Watson-based IT platform, whereas Lotte Members will be in charge of analyzing data.

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