Lotte Department Store's same-day delivery service. [Lotte Department Store Mall website capture]
Lotte Department Store's same-day delivery service. [Lotte Department Store Mall website capture]

Lotte Department Store will shut down its same-day delivery service on its online mall starting in August. Even as convenience stores and other retailers expand quick commerce, department stores appear to be moving in the opposite direction.

According to industry sources Wednesday, Lotte Department Store's same-day delivery service will end Aug. 21. The service allowed customers who placed orders on the Lotte Department Store Mall by 11 a.m. to receive their purchases the same evening. It covered beauty, bags, fashion, food and living products across Seoul, Gyeonggi Province and Incheon.

Lotte Department Store said the move follows the expiration of its contract with a third-party delivery provider. "The service will be discontinued as the same-day delivery provider is ending its operations," a company official said. "While same-day delivery will end, we are reviewing the introduction of various delivery services to improve convenience for customers using the Lotte Department Store Mall."

Lotte Department Store had been in effect the only department store in the country operating a same-day or quick-commerce delivery option. Shinsegae Department Store runs an online mall through SSG.com, but orders placed directly are shipped via standard courier rather than its express "SSG Delivery" service. Hyundai Department Store also relies solely on standard courier, with no quick-commerce offering. Earlier this year, it shut down Hyundai Food Hall To Home, which had been running dawn delivery and quick-commerce services.

The trend stands in sharp contrast to other retail channels. Convenience stores CU, GS25 and E-mart24 have expanded their delivery services to round-the-clock operations. SSG.com this month introduced a service that delivers orders within two hours of purchase. CJ Olive Young operates a same-day delivery service, and Daiso expanded its same-day delivery pilot to cover all of Seoul.

These retailers leverage their dense store networks as urban micro-fulfillment centers, securing delivery hubs through existing brick-and-mortar locations without building separate large-scale logistics facilities. Large distribution centers handle nationwide inventory, while micro-fulfillment centers and stores process quick-commerce orders closer to the consumer. The strategy cuts delivery times while reducing last-mile costs, which represent the heaviest burden in logistics spending.

Department stores, by contrast, face steeper hurdles in quick commerce. Operating a dedicated delivery logistics center carries significant fixed costs. Because their offerings center on premium products, they also struggle to bring down per-delivery costs — unlike the high-volume order structures of other e-commerce platforms. Average transaction values are high, but order frequency is low, making operations less efficient.

One industry official said cost is part of the equation, but added that quick commerce may simply not be necessary for department stores. "If you just want to buy a product, quick commerce works fine — but department stores are built around the in-person, premium experience of seeing and choosing items yourself, so the need just isn't there," the official said..

Shoppers line up to enter Lotte Department Store's flagship store in Jung-gu, Seoul, on June 26, when major department stores kicked off their summer sales. [Yonhap]
Shoppers line up to enter Lotte Department Store's flagship store in Jung-gu, Seoul, on June 26, when major department stores kicked off their summer sales. [Yonhap]

korean@heraldcorp.com