Decathlon's chief digital officer on making 'digitisation the new normal'
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Business |Interview
Decathlon went back to the drawing board and put a new vision on paper. The French sports fashion retailer wants to develop further as a 'multi-specialist-company' under the motto 'Move People Through The Wonders of Sports'. Part of the new strategy is digitalisation. FashionUnited spoke to chief digital officer Jimena Almendares during a strategy launch event in Paris.
Jimena Almendares has been working as chief digital officer at Decathlon since August 2023. She joined from tech company Meta, where she learned about customer experiences for every Meta app (Whatsapp, Instagram, Facebook, etc.). An interesting role, she said, as the complexity between users, such as advertisers, influencers and regular users, was evident. In short, she learned more about technology in the heart of Silicon Valley [where Meta is based, ed.]. "Now I combine this technology with the hearts of companies, in this case Decathlon, so we can reach more people. This is not just about those who play sports, but those who touch our whole sports experience."
Digitalisation is part of Decathlon's new operations. Can you talk a bit more about this?
When I started at Decathlon, the opportunity to make digitisation serve the business was lacking. My job now is to make digitisation the new normal. We do this in several ways. First of all, we help our teammates accelerate. For example, if you are going to design a sports product, you need to collect a lot of data to tell what kind of products people need, how many products should be made in a certain colour, and so on. In fact, we are now providing our sports team with the latest (AI) technologies to make them more flexible in their daily work. You won't see anyone making predictions or forecasts with Excel anymore, that can now be done more easily.
Second is the 'off-me' experience. Decathlon once started with a brick-and-mortar shop, but today consumers want to be able to place an order with their mobile phone in the physical store. We recently launched the 'discovery station' [as part of the new shop concept]. One can not only compare products here, it also exhibits why a product is designed in a certain way. That information is worth its weight in gold these days.
Two years ago, we made the strategic decision to digitise our supply chain and started developing AI algorithms for many 'use cases', such as forecasting, product planning and inventory parameters. So far, we are seeing an 8 percent increase in the accuracy of our forecasts across Europe and a decrease of plus 30 days in our inventory levels between 2022 and 2023. And the benefits don't stop there - these improvements are also helping us reduce our transport costs, carbon footprint and delivery time. We continue to accelerate our digital supply chain initiatives by developing end-to-end smart solutions that help us deliver better performance.
Then we have the apps. Not everyone will know, but Decathlon has 40 sports apps. One app helps you keep track of hiking routes, another helps you improve your fitness. The problem: The apps were not part of omni channel commerce. Our goal now is to combine everything. For example, you will soon be able to track your running routes and get a signal when you need to change your shoes. Then we can recommend shoes that fit your movement. In this digital transformation, we see that Decathlon is connecting all the loose ends, because we already had all the ingredients for a good working product.
This digitisation costs money. How much is Decathlon investing in this component?
We know that technology brings a lot of innovation. We want consumers to be able to experience our products in a good, and now new, way. In doing so, it is important that everything is made understandable and accessible. That is why we continue to invest heavily in this.
Last year, we invested 34 percent year-on-year in digitalisation. For example, we hired around 450 engineers and people with digital knowledge. That's about the same as a year before.
Decathlon appointed a Green IT team last year. What exactly does this team do?
The Green IT team ensures that everything we do, including the service we use, is sustainable. The problem with tech companies is that they use a lot of electricity. So Decathlon looks beyond just reducing CO2 emissions from (physical) products.
This dedicated team is also working on 'green AI' and adding new services to online experiences. For example, you can now rent a bike online, instead of buying it, and we are publicising our second-hand sales, rental and leasing options to create consumer awareness. In short, when we talk about 'green', we are talking about the things we can do ourselves in terms of technology.
What are the challenges in digitisation?
In the short term, we can make many improvements. In the long term, we should not lose sight of the improvements we can do. Technology is constantly changing and you have to be able to keep up with that as a company if it is really to be a success. For example, we are choosing to double our commitment to Generative AI. We now have a very large team on that, researching the technologies we know are going to help us. The development and implementation does take a lot of time, but it will eventually be used in every part of the business.
Decathlon's e-commerce sales fell from 20.8 percent to 16.8 percent in 2022. Can you share a bit about the 2023 results?
In the year 2022, we were dealing with aftermath of the corona crisis. During the pandemic, a lot of people bought their bikes online, while in 2022 that declined again. It is impressive to see that 47 percent of sales in 2023 will come from e-commerce. So we can say that about half of the growth will come from digital channels.
The plan is to keep growing in this, knowing that some consumers only want to shop digitally. Moreover, we have been on the high street for many years and we know that new growth areas are precisely in digital channels.