“In future, 80% of e-commerce will come from grocery stores”
With electronic labels and anti-breakage surveillance cameras, SES-imagotag optimises store operations.
GRN: After the NRF Big Show, SES-imagotag is exhibiting at EuroShop. What is your vision of retail at the beginning of 2020?
Thierry Gadou: Compared to what I have known in the past, we are witnessing a 180° turn. No one now dares to cry that physical stores are dead, which I heard quite recently. We are seeing a resurgence of physical retail. The crown jewels of a successful retailer are their stores. Walmart, like many others, is posting spectacular results from its resolutely “bricks & mortar-based” omnichannel program. The innovative discussions are increasingly focused on technologies dedicated to stores. This is refreshingly new!
GRN: What do you expect from Qualcomm as a new shareholder?
T.G.: Qualcomm is one of the world leaders in semiconductors. With their recent investment of 2% in our capital, we will develop the next generation of chips to manage the digitisation of stores on a large scale. SES-imagotag installs tens of thousands of connected objects in stores like single labels and also cameras. This generates a lot of data, with low energy consumption but a significant need for connectivity. This agreement with the U.S. giant Qualcomm is one of our top achievements in 2019. We are proud to have been chosen by a partner of this magnitude. It shows that we have the best technology on the market.
GRN: Where is the deployment of electronic labels?
T.G.: Less than 5% of international retailers are equipped with electronic labels, on an addressable market estimated at 10 billion labels. The most advanced countries are France, Spain, Belgium, Italy and Scandinavia. We operate at Bilka, Dansk and soon at Rema 1000. Germany and Switzerland, which arrived late, are accelerating seriously. The adoption of electronic labels is colossal. I am convinced that the “Top 500” of global retailers will have switched in 5 or 7 years.
GRN: Where does this expanding demand come from?
T.G.: The electronic label is the basis of the digitalisation of any store, similar to a central nervous system in a way. It’s the only connected and “intelligent” object next to each product on shelves. This is the indispensable 1st layer of digitalisation technology, it is impossible to do without at the moment.
GRN: What are advantages in terms of seamless display price management?
T.G.: Manual display price adjustment requires increasing work. This was the original problem now solved by electronic labels. With paper labels, this problem increases every year. Store staff must cope with constantly changing information, driven by frequent promotions or price changes following comparisons with the Web. However, stores are unable to keep up with this increasing demand due to low margins and staff costs. In addition, some fresh food departments need dynamic pricing throughout a day. This is the case for bakeries or fishmongers, where freshness is decisive. For instance, you know that croissants unsold by 11 a.m. are likely to be thrown away in the evening. Pre-emptive logic adjusts new lower prices from 10 a.m. Electronic labels are a good tool for this.
GRN: How do your solutions improve store performance?
T.G.: They affect two major areas of retail “Profit and Loss”: restocking and breaking up. Take the example of our “put to light” service. To facilitate restocking, a store employee scans the barcode of the product to be restocked and the corresponding shelf labels start to flash. There is no need to look for a shelf location in particular and this saves approximately 10 seconds per product. Another example, and not the least, are breakages or spoiled products. These represent 5% of lost turnover in supermarkets. By saving time in restocking and setting up promotions, store teams can better deal with damaged goods. They can inspect more shelves and replace items faster.
GRN: At the NRF Big Show, you have unveiled a new technology to go even further in the hunt for spoiled products. Please explain this.
T.G.: Our new optical recognition solution, being tested in the United States, France and China, identifies facings and ruptures in real time. It reads the facings of the opposite radius and recognizes 99.7% of the range. An advantage is connection to the cloud, where it consumes little energy and has a precision far beyond conventional computer vision systems, whose average error rate is 5%. Finally, our solution is 9 to 10 times cheaper than a standard computer vision system. We have excellent expectations for this new technology.
GRN: How do you streamline preparation of web orders?
T.G.: Our labels also play a key role in picking. When the employee receives a Web order on their Personal Digital Assistant (or P.D.A.), they click on each item in the basket and the corresponding label will flash. According to a recent study carried out on several points of sale, this reduces the picking time of a Web order by almost 50%. This is important because almost all supermarket retailers tell us that in future, 80% of e-commerce will come from stores and not from warehouses. This means that stores are definitely destined to become warehouses! Our automation of tasks is essential to identify damages in seconds and improve inventory management.