Retail

In 2022, Sabancı Group’s retail business recorded combined revenue of TL 36.6 billion, up 117% driven by like for like growth in both the electronics and food retail businesses with an accelerating contribution from online sales and lean transformation activities. The increase in revenue was supported by cost efficiency measures that boosted profitability, resulting in combined EBITDA of TL 2.8 billion and net profit of TL 285 million this fiscal year.

Thanks to expanding marketplace sales, Sabancı Group’s tech retailer boosted its Total Gross Merchandise Value (GMV) by 136% compared to a year earlier. Meanwhile, along with boosting e-commerce sales, expansion in franchising and business to business (B2B) sales were the key factors that improved the Group’s food retail business over the previous year.

Protect and Grow the Core

Sabancı Group’s retail business delivers an exceptional customer experience and creates customer value by continuously improving its omnichannel and digital infrastructure, expanding its service offerings and evolving its e-commerce capabilities to respond to an ever-changing market.

In its tech retail business, Sabancı Group aims to focus on customer experience and respond to changing customer expectations as a technology destination by blending physical stores with its tech-focused online platform.

This year, Teknosa, Sabancı Group’s technology retailer, embarked on a comprehensive initiative to improve its customer journey to create a seamless and flawless phygital experience to consumers with a new experience-based store concept. Stores will increasingly become critical touchpoints for customers while achieving operational efficiency through digital transformation. Digital screens where customers can look-up product information and compare them, interactive cash register screens that greets and display basket contents of the customer and campaigns, digital tags and product experience areas enable customers to feel a smooth transition between online/offline channels and enhance phygital experience. Several product experience areas are placed for customers to be immersed in a warm, home-like mood. These stores are made accessible to all visitors through pathways, wheelchair accessible checkout points and easy-access buttons. Separately, a “Sustainability Wall” installed in stores displays energy-savings, carbon footprint and recyclable waste information for customers.

To boost its service ecosystem and become a “one-stop-shop” for customer tech-related needs, Teknosa’s after sales services, branded as Tekno Hizmet, were consolidated into a single contact point for customers to navigate easily.

In 2022, Teknosa also introduced new features on its web and mobile app platforms, including live web and video chat support, and a smart product search robot. The experience-based design of the channels uses physical store and online footprint data in addition to AI.

On the food retail side, Sabancı Group’s strategy is designed to achieve higher growth and operational profitability with an asset-light structure. Carrefoursa, the Group’s food retail company, protects and extends its core business by growing in omni-channels via harmonization of its online and offline businesses, boosting operational efficiency and improving its lean structure. The Group’s food retailer also focuses on digitalization, e-commerce and customer satisfaction to create more customer value and drive growth.

In 2022, Carrefoursa enhanced its fulfillment and delivery capabilities with a major e-commerce optimization and development initiative. The Group’s food retailer implemented a performance management system to provide continuous improvements to processes. The vehicle fleet was modified to optimize the delivery process; automated routing and business planning tools were introduced to boost efficiency. New payment solutions and partners as part of the retailer’s commercial expansion was implemented to further improve customer experience. By improving its AI capabilities, Carrefoursa also started providing customers with a personalized shopping experience, sharing real-time location-based special offers with customers to provide more targeted and relevant promotions.

Widely known for delivering the right products for its customers, Carrefoursa’s growth strategy is based on franchise expansion and organic growth. The franchising model offers attractive value enhancement and a sustainable model for both Carrefoursa and potential dealers. With a low initial investment, franchising enables small business owners and solo entrepreneurs to grow sustainably, while boosting the competitiveness of the Group’s food retail business.

This year, Carrefoursa recorded substantial growth in franchise volume and network expansion. The Group’s food retail franchise store portfolio nearly tripled in 2022, climbing to 200 stores in 37 cities and sustaining its asset-light organic growth.

As part of its asset-light growth strategy, Carrefoursa also increased its B2B sales in the corporate, wholesale, export, and HORECA (Hotel-Restaurant-Café) segments, totaling TL 1,372 million in 2022. By leveraging its existing product and market advantage, Carrefoursa has also expanded its export business thanks to international Carrefour retailers.

Invest in New Growth Platforms

Sabancı Group’s retail business targets growth via digital platforms, complementary services and adjacent ecosystems.

In the Group’s tech retail activities, Teknosa took a major step forward in its customer focused digital transformation journey by successfully launching Türkiye’s first consumer electronics specialized marketplace on January 31, 2022. Teknosa Marketplace bolsters the company’s omnichannel capabilities and delivers customers a wide array of technology products from merchants that meet its high customer service standards.

In just 11 months of operation, Teknosa Marketplace has increased its product offerings by 22 times, traffic on the digital channel has risen by 38%, e-commerce gross merchandise value reached up 3.3 billion TL up by 136% year on year and the platform’s overall performance has reached global benchmarks.

Carrefoursa gained 2.1 million new customers in 2022 and reached to 8.7 million customers who are registered to the loyalty card program while the total of customers reach 164 million through its physical stores and e-commerce channels. Total number of its online users reached 28.8 million whereas the number of downloads of the mobile application reached 2.1 million in 2022.

Various efforts are regularly undertaken to upgrade and enhance Sabancı Group’s tech retail digital platforms. To improve customer experience and increase traffic to Teknosa’s digital channels, Bi’Link, a social commerce application, was launched this year. This feature allows users to easily share the products offered on the website and mobile platforms with their friends. The next phase of this upgrade initiative is Partner Solutions which will introduce useful features and applications for merchants to use within Teknosa Marketplace while facilitating new business models to generate additional revenue streams.

Social, or live, commerce, is a growing trend that allows businesses to use social media as a sales platform for their products and services. In July, the Group’s tech retailer began broadcasting on digital channels to meet customer expectations for a more personal and interactive shopping experience.

In May 2022, Teknosa.com introduced a refurbished cell phone category in marketplace featuring a wide selection of high-quality professionally restored and guaranteed devices. In addition to the environmental benefits of reducing electronic waste, purchasing a refurbished cell phone from Teknosa digital channels offers consumers a financial advantage.Product rental is another service that the Group’s tech retail company provides as an affordable and sustainable alternative in which consumers can rent and try out nearly 200 products via Teknosa Marketplace before making a purchase decision.

As a part of the service business, Tekno Hizmet was launched in early 2022. Service and membership packages were developed to fulfill customers service needs for all their technology products. Membership packages fulfill every consumer need related to installation and support, protection, repair and care of products purchased from the Group’s tech retailer. In a short time, Tekno Hizmet has achieved its mission of reaching out to more customers, including non-Teknosa consumers.

Private label (Preo), one of the Sabancı Group tech retailer’s strategic initiatives, was enhanced via a product portfolio expansion across five categories with more 1,000 stock keeping unit (SKU)s. Development of various new high-tech and higher-average sales price (ASP) products – such as TVs, tablets, and smartwatches – enables Teknosa to meet consumer needs while also boosting the profitability of this business. Outside of Teknosa, private label market penetration was maximized by strengthening alternative channels with over 50 different external companies.

The İklimsa business unit offers climate control product lines under its private label brand Sigma along with Mitsubishi, Samsung and Sharp brands through a nationwide distributor and service network. With the growing interest in renewable energy and lowering energy costs, İklimsa enlarged its product offering with heat pumps and solar energy systems. Thanks to its large distributor and service network, İklimsa is not only selling these products, but also implementing larger scale installation projects, providing end-to-end service to customers.

In Sabancı Groups food retail business, Carrefoursa pursued sustainable growth in its core business while also taking major steps into adjacent ecosystems in 2022. To boost its share of the business to customer (B2C) market, particularly in the readyto-eat segment, the Group’s food retailer expanded its “Lezzet Arası” restaurant network – which hosted 320 thousand customers per month- and product offerings. This effort drove an increase in Carrefoursa’s customer traffic while providing valuable opportunities to cross-sell. CarrefourSA placed more than 500 private labeled products on the shelves and increased the sales volume of its private labeled products by 165 percent in comparison with the previous year.

The Way Forward

Looking toward the future, Sabancı Group’s retail business unit plans to ramp up its sustainability initiatives and product offerings, execute a blended digital and physical strategy, move further into services that complement its current operations and effectively leverage its digitalization and big data capabilities.

On the tech retail side, new business model and customer-focused innovations will accelerate Teknosa’s “phygital” strategy and serve as a growth catalyst.

As society becomes more aware of the environmental impact of electronic waste, energy consumption and its own carbon footprint, consumers are increasingly seeking sustainable alternatives to traditional modes of consumption. Refurbished cell phones offered in Teknosa Marketplace are an attractive alternative, allowing consumers to purchase a fully functional device at a lower cost while reducing the environmental impact of manufacturing processes. Newly introduced solar energy systems by İklimsa provide an opportunity to customers to decrease their carbon footprint. İklimsa holds a unique advantage: an already existing service network combined with know-how to serve B2C customers.

Leveraging this competitive advantage allows İklimsa to offer end-to-end solar energy systems to its customers in a highly diversified range of projects.

In food retailing activities, Sabancı Group’s food retail e-commerce business is also expected to grow sustainably with optimum profitability. Carrefoursa increased CDP scores and has been listed on the “Water Security; 2022 Global A-List”. Carrefoursa applied the Zero Waste management system. In terms of organizational and cultural transformation, the rate of company’s female employees approaches to 40 percent and the half of the Head Office consists of female employees.

Other key goals include increasing its conversion rate and average basket size. To this end, Carrefoursa aims to integrate its redesigned user interface and user experience with its website and mobile app.

Moreover, the Group’s food retail company plans to expand its portfolio of franchise stores and further optimize its store network. With the objective of capturing a higher share of the B2C food market, Carrefoursa aims to further expand its Lezzet Arası restaurant network.

Looking ahead, Sabancı Group’s retail companies plan to make additional investments in customer and data-driven digitalization initiatives. Besides reaching new customers, the Group’s retail strategic priorities include uplifting existing customers and maintaining customer loyalty by effectively using big data.