In June, we organized a Game Changers event in Paris dedicated to retail and ecommerce. Thierry Gadou, chairman and CEO of SES Imagotag, gave a very interesting insight into digital transformation in e-commerce.
SES-imagotag stands for an outstanding solution that combines market experience and tech innovation to lead retail towards a future of ultra-efficient processes, seamless omnichannel retailing and boosted brand sales. The company’s main aim is to bridge the gap between physical stores and their digitization leveraging its expertise on wireless radio infrastructure, software platforms and electronic labels. These electronic labels have been installed in approximately 10,000 stores (food and non-food) in 54 countries. The company boasts a 20% annual growth rate over the last 5 years, with 60% in international sales.
Thierry Gadou, chairman and CEO of SES-imagotag, gave a very interesting insight into the future of retail. Digital transformation started with the internet and the emergence of pure players, when e-commerce changed the market completely. It introduced new services such as one-click purchasing, personalised products, home delivery… These changes had rough consequences on physical stores: in the US or the UK, the shockwave was rough as the internet represents 15% of retail sales and there are 3 times more taxes for physical stores than online stores. At least 40,000 points of sale have been closed in the UK and about 900,000 jobs are said to be threatened in the next 10 years in the UK.
However, physical stores must and can strike back. Within the 250 largest retailers around the world (Deloitte’s ranking on Global Powers of Retailing), only 3 retailers are pure players (Alibaba, Amazon, JD.com), and of the 50 largest online retailers, only 20% are pure players. Walmart is the second largest e-store in the United States.
What does this mean for the future of e-commerce? According to Thierry Gadou, the third digital revolution in commerce will be the combination of all different channels within a unified global experience. The world will be omnichannel and connected stores (digitized physical stores) will be at its heart.
Indeed, physical stores will still dominate the market for a number of reasons. First, customers are still attached to stores because they are used to them and shopping is seen as a leisure activity. Secondly, these stores are immersive, the customer holds and shares much more information than in online stores. Furthermore, physical stores are efficient channels in terms of customer conversion rate: the store improves customer loyalty and therefore profitability. Conversion rate is 2% for e-commerce and 20 % for traditional stores. This is why Amazon is about to launch its first physical stores.
However, physical stores will not and cannot remain the same, they will be entirely digitalised. Nowadays, 90% of retail sales are offline. The flow of customers in stores is a genuine gold mine for retailers, provided that they use data. The connected and smart store will enable this thanks to new tools bringing e-commerce techniques and social networks inside points of sale. SES-imagotag aims to retarget customers after store visits. The next big battle in digital will be in stores, and France is at the forefront with 7 of the world largest retailers being French: Carrefour, Auchan, Casino, ...