[Report] 80% Surge in Orders Within Half a Year... Nonstop Activity at Large Marts

Logistics Innovation Store with Online Delivery
Visited Lotte Mart Junggye Branch in Nowon-gu
About 1,450 Daily Deliveries in December
81.3% Increase Compared to 800 in May
Expanded Delivery Vehicles and Staff Compared to Phase 3

The rail installed on the ceiling of Lotte Mart Junggye Branch on the 16th. When an online order is received, employees immediately pack the items in the store and use the rail to transport them to the logistics center.

[Asia Economy Reporter Seungjin Lee] At 11 a.m. on the 16th, Lotte Mart Junggye Branch located in Nowon-gu, Seoul. Despite being a weekday daytime, the store was bustling with people busily moving carts and putting items in them. These were not customers but Lotte Mart employees packing items to be delivered directly to customers' homes.

An employee who put milk into a basket looked at a PDF device, then ran to the opposite sales counter to put ramen into the basket and transferred it to a device labeled ‘Station.’ Then the basket floated into the air, moved along rails installed on the store ceiling, and was transported to another location. Within just five minutes, about ten employees came and went at the stations, and dozens of green baskets filled with goods began floating in the air along the store ceiling.

Lotte Mart renewed and reopened the Junggye and Gwanggyo branches as digital smart stores integrating online and offline operations in February this year. The digital smart store is a logistics innovation store that offers reserved delivery, allowing customers to set desired time slots and receive ordered items based on a 15 km wide commercial area, as well as ‘immediate delivery’ where ordered products can be received within two hours.

The reason employees were so busy that day was due to the recent sharp increase in delivery volume. At the Junggye branch, delivery service officially started in May, with an average of 800 deliveries per day. In November, the daily delivery target of 1,300 was achieved, and as COVID-19 cases surged in December, delivery volumes have been exceeding 1,450 per day.

An employee at Lotte Mart Junggye branch is packing picked products to prepare them for delivery.

There are four ‘Stations’ in the Junggye store. Stations are divided into zones according to the type of ordered products, and pickers (people who pack items) have PDF devices that transmit the items they need to pack in real time, so pickers perform their tasks centered around the stations. When pickers put baskets filled with items into the stations, they are moved along rails installed on the store ceiling to the packing area. Products sorted through each station according to product type are then consolidated into a single delivery box at the packing area. Here, the items undergo inspection to check for defects and to verify that the packed items match the order before being loaded onto delivery trucks.

Most of the process is automated, but the packing and inspection require human hands, so about 35 employees are responsible for picking and packing. That day, employees moved tirelessly to inspect the green baskets continuously flowing along the rails, and some even had sweat on their foreheads despite the subzero temperatures. Due to recent labor shortages, employees responsible for other tasks are frequently assigned to picking and packing duties at the Junggye branch.

Youngdae Kwon, Deputy Manager of Lotte Mart Junggye Branch, explained, “For reserved delivery, the highest demand used to be at 11 a.m. after sending children to school and at 7 p.m. when people return from work, but recently all time slots have been fully booked.” He added, “Digital smart stores like Junggye can pack products available in-store and deliver them immediately, which is advantageous for freshness management. Ninety percent of delivery items are fresh or processed foods, and demand for online grocery shopping continues to increase.”

Meanwhile, Lotte Mart plans to increase delivery vehicles and related personnel by 10% to prevent delivery issues if online delivery volumes rise due to social distancing measures at level 3 or higher. Additionally, Lotte Mart plans to significantly strengthen its online market competitiveness by launching early morning delivery across all areas of Seoul, Busan, and southern Gyeonggi Province this month. In 2021, the company plans to expand 29 ‘semi-dark stores’ that focus on packing, building key automated facilities in the back-end while operating stores simultaneously.

This content was produced with the assistance of AI translation services.