Falabella announced its investment plan for 2022 for US $ 711 million. An important part will go towards the launch of the Falabella.com integrated platform in Peru and Colombia, along with continuing to strengthen technological capabilities to improve the value proposition of the e-commerce platform, the Chilean retailer said in a statement.
Investment in logistics will also continue to increase order processing capacity in existing assets, mainly in Chile, Peru and Colombia.
The general manager of Falabella, Gaston Bottazzini highlighted that “We continue to advance on our path of digital transformation, we want to consolidate falabella.com as the leading e-commerce platform in the Andean region, which allowed us to simplify the shopping experiences of our 35 million customers in the region, so that they can enjoy more his life. The plan presented aims to continue strengthening our main growth engines. On the one hand, to continue developing our integrated e-commerce platform to drive growth in online sales for our retailers and marketplace sellers. And on the other, continue making progress in converting Banco Falabella into a 100% digital bank”.
In particular, investments in technology and logistics are focused on leveraging the physical assets of the ecosystem, to strengthen the omnichannel experience of customers and sellers, through the following cross-cutting initiatives:
- Continuous improvement of e-commerce platforms to continue adding new product categories
- Expand the functionalities of the apps to optimize the shopping experience in stores, focused on the complete customer journey from an omnichannel perspective
- Continue strengthening the digital banking platforms focused on positioning the Banco Falabella app as the main channel for customer service and attention
- Continue strengthening Fpay, expanding its functionalities as a payment processor of the integrated e-commerce platform, and deploying new use cases as a digital wallet
Additionally, technological projects will be developed to strengthen home delivery logistics with a focus on continuing to shorten delivery times, respond quickly to customer requirements, and increase visibility and traceability in the last mile. The company’s logistics capabilities will also be strengthened, with the following initiatives:
- Increase the order processing and packing capacity of the existing distribution centers in Chile, Peru and Colombia.
- Scale from third-party product processing capabilities (warehousing, packaging, and delivery services).
- Promote on-demand delivery, expanding the assortment and making capacities and assets available to the sellers of the Marketplace
Investments in technology and logistics for 2022 will total US $ 418 million, of which US $ 308 million will go to technology and US $ 110 million to logistics.
Investments in physical stores
40% of the remaining investments will go mainly to the development of IKEA in Chile and Colombia, the development of Home Improvement in Mexico and Brazil, Tottus expansion in Peru and improvements and remodeling of the network of stores in the region.
About US $ 135 million of the investments announced for 2022 will be used for the multi-year store opening plan, which includes 19 openings in the region by 2022: the implementation of four Tottus and Hiperbodegas supermarkets in Peru, the second player in the market in that country, a Tottus in Chile; the opening of four new Sodimac stores in Mexico and 7 in the rest of the region; two IKEA stores in Chile and a Falabella Retail store in Colombia.
Bottazzini added that: “We continue to advance with our selective store openings plan, focused on businesses and markets with clear growth opportunities. We are committed to our Home Improvement expansion plan in Mexico, very satisfied with the performance of the 9 stores that we already have in operation. We are also excited regarding the prospects for Home Improvement in Brazil, where, as a result of the good performance of our operation, we developed a plan to open eight additional stores to the 53 that we have today”.
In turn, during 2022, US $ 158 million will be invested in innovations and optimizations of the existing network of stores and shopping centers, through renovations and remodeling that will strengthen the integration of the digital proposal with the physical shopping experience, accelerating the development of the store of the future, with a focus on:
- Optimize existing sales areas to enhance the display capabilities of own and third-party products (“showrooming”)
- Increase self-service capabilities by leveraging our apps to consult and discover products and streamline the payment process
- Strengthen the logistics role of the store, supporting “Click & Collect” delivery processes, improving the returns and exchanges experience and scaling delivery capabilities from the store (“ship from store”)
Bottazzini concluded “In summary, our investment plan seeks to continue enhancing our physical-digital ecosystem, with a clear focus on strengthening digital capabilities that allow us to increase interactions with our clients to generate long-term relationships with them, through our e- proposals. commerce and digital banking”.
Regarding the investment horizon
The competitive environment and the speed of change require greater flexibility when investing. For this reason, Falabella separated its investment plan into two categories:
- For investments in physical stores and shopping centers, both new and remodeled, the investment plan for the period 2022 to 2023 is shown, updating the projection delivered last year. This contemplates an investment of US $ 293 million for the year 2022 and US $ 303 million for the year 2023.
- For investment in technology and logistics, the corresponding investments are reported only for the year 2022. Because the technological development of the company is strongly focused on the development of applications and short-term technological solutions, other than system software implementations world class of long use over time that are activated and amortized over time (Capex), hereinfollowing it is reported, not only the investment in capex, but also in opex (operating expenses that are recognized as expenses and administration in the period executed), in order to show the complete investment in that item. The total investment for the year 2022 in technology and logistics corresponds to US $ 418 million, of which US $ 243 million are Opex and US $ 175 million are Capex.
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