Shinsegae Group is pushing a project with U.S. artificial intelligence company Reflection AI to apply AI across retail, including product sourcing, inventory management and customer management.

Shinsegae Group said on April 17 it is accelerating "advanced AI retail innovation" with Reflection AI, aiming to let businesses and consumers experience synergies between distribution and AI. The two sides last month agreed through a memorandum of understanding in San Francisco to build and jointly operate an AI data centre.

Shinsegae Group plans to execute strategies to create synergies between its existing distribution business and AI. The two companies will focus on raising productivity by jointly implementing an AI-based retail business model optimised for the future distribution industry.

The company said there are 6 retail areas where it will apply AI. They range from product sourcing to ordering, pricing, logistics, inventory management and customer management, covering the full process of how distribution companies run their businesses. Shinsegae Group expects that applying AI across retail operations will allow it to find the products customers want most in time and sell them at optimal prices.

E-Mart will be the first to carry out the AI-based retail business. E-Mart is characterised by handling the largest number of products directly within the group and having the most customer touchpoints. E-Mart's working-level group will meet Reflection AI, which will visit South Korea at the end of this month, and begin discussions on execution plans.

Misha Laskin (미샤 라스킨), CEO of Reflection AI, and employees in charge of the project will visit South Korea and hold workshops with Shinsegae Group management. The company expects that discussions on the business model for building and operating the AI data centre will also become more concrete.

Separately, Shinsegae Group decided to halt collaboration discussions with OpenAI. It plans to focus its resources on rapidly expanding cooperation in the retail field with Reflection AI. It will also push ahead efficiently with building an AI data centre.

A Shinsegae Group official said, "Based on cooperation with Reflection AI, we will make AI a new pillar of the group's future vision." The official added, "At the same time, we will swiftly pursue innovation in our existing businesses using AI to achieve sustainable growth and deliver greater customer satisfaction."