'Retail isn't about selling to customers. It's convincing customers to buy from you," says Lotte boss

As Korea’s leading retail group, Lotte has long been a household name. With over five decades of experience and a diverse portfolio, Lotte commands a retail empire that reaches deep into the lives of Korean consumers. Nonetheless, even giants must evolve.

In a market where online now accounts for nearly half of all retail sales and where demographic and economic headwinds loom large, Lotte is undergoing a sweeping transformation aimed at one thing: staying relevant by staying relentlessly customer-first.

According to Samuel Sanghyun Kim, vice chairman and group CEO of Lotte Retail, at the heart of the transformation is one fundamental belief: the customer comes before anything else.

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"In fact, I tell my guys that the definition of retail isn't about selling to customers. It's about convincing customers to buy from you," he said. Kim added that the brand is always looking for ways to create “exceptional shopping experience and putting customer needs, wants and their desires in front of everything”.

As such, rather than pushing products or promotions, the brand is focused on authenticity, consistency, and delivering what matters most to shoppers.

"Value, to me, is taking a very different definition than just about price. In the world that we live in, where customers have virtually infinite options, you can probably shop online or offline or locally or cross border," said Kim.

Transformation amidst high expectations

According to Kim, who was speaking at NRF 2025, Korea’s retail environment is unlike most others. High-speed internet, deep smartphone penetration, and tech-savvy consumers have led to a sharp rise in omnichannel behaviour.

Shoppers, in fact, expect seamless experiences across physical and digital storefronts. At the same time, Korea’s ageing population and low birth rate are placing long-term pressure on domestic demand.

Against this backdrop, Lotte recognised the need for bold change, particularly in the digital arena where agility and insight would become critical. The retail overhaul was not simply about digitisation or streamlining operations. For Lotte, it meant redefining what it means to create value and putting the customer at the centre of every decision.

"We created a transformation model that started with the organisation's vision and really challenge ourselves in terms of the capabilities that are really required," said Kim.

From a macro, holistic standpoint, he advices brands to think of how they can create not just shopping transactions, but shopping experiences that promote relationships that can last a long time. This in turn builds trust and value that leads to actual long-term impact.

Moreover, in Korea, “omnichannel” is no longer just a buzzword. Consumers move fluidly between digital and physical platforms, often within the same purchase journey. For Lotte, this has meant reimagining every customer touchpoint with the same level of service and brand promise no matter where that interaction happens.

"The market has gotten much more sophisticated. It's all about the same aspects that you would find offline or online. It's all about great products, great quality, great value, great price to quality ratio and service," he explained, adding that:

In Korea, there is no more line. There is no online or offline.

Where was the investment placed?

At the core of Lotte’s transformation is a major investment in digital and AI capabilities that not only streamline operations, but create better, more tailored customer experiences.

This includes a partnership with Ocado Solutions on a generative AI-based app to improve UI/UX experience. The app features AI agents that are built to help customers with their shopping baskets.

For example, in Lotte's liquor business, AI agents will be able to recommend pairings to match food. In appliances, the AI agents can help compare features and find value while in fashion, the agents can match outfits to customers' personal style.

This personalisation engine is then powered by Lotte’s loyalty programme, which boasts more than 43 million members. This offers the group an unrivalled dataset to inform and execute its marketing strategies.

Lotte has also built an innovation lab known as LILAC Centre (short for Lotte AI Lab Alliance and Collaborators) to work with internal and external partners to develop and test AI-based programmes.

Lotte’s marketing transformation doesn’t stop at Korea’s borders. The group is also tapping into the surging global appetite for Korean culture from K-pop and K-beauty to K-food and fashion to drive international growth.

"I think Korea has really benefited from the rise of everything from K-pop to K-beauty to K-food and K-fashion. In fact, last year, I believe about US$14 billion worth of Korean foods were exported while another about US$10 billion worth of K-beauty products consult overseas," said Kim.

"That provides us with an opportunity to bring new experience and new products to the customer," he added.

At the same time, Lotte is also working with partners globally to meet these demands. This includes a partnership with FairPrice in Singapore too where the local supermarket chain carry Lotte's private label and supplier brands too.

Challenges remain

Despite its momentum, Lotte’s transformation journey hasn’t been without challenges. Currency fluctuations, tariffs, and economic pressures all require careful navigation. Meanwhile, Korean retailers face fierce competition in a saturated market. This includes external factors such as macroeconomic issues, demographic shifts and the infinite options for customers.

This is why transformation, Kim emphasised, is not a campaign but a mindset:

Retail is all about being real on time, and so I would encourage organisations to see customers, see your team members, and hear, listen.

Having done so personally, Kim said, "I also want to make sure that I'm in touch with our team members, particularly those that are on the front line, who are facing customers, because obviously we all sit in offices, and we can lose sight of and make it theoretical."

"Being CEO is all about learning. The world is being too fast, and you can't stop," added Kim.

For marketers, Lotte’s story offers a clear lesson: transformation starts and ends with the customer. In a landscape where brand loyalty is fleeting and choices are infinite, the brands that succeed are the ones that deliver meaningful value, however and wherever the customer chooses to engage.

"Shoppers have way too many choices they can go to, way more retailers than I can count and what that means is that, how do we continue to provide higher standards in their expectations and ensure that we do our best to provide create value and experience? That it's not about this transaction, but it's about shopping experience," said Kim.

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