Falling prices, overabundant supply… How Casino’s e-tailer is relaunching itself

Falling prices, overabundant supply… How Casino’s e-tailer is relaunching itself
Falling prices, overabundant supply… How Casino’s e-tailer is relaunching itself

The sky is starting to clear for Cdiscount. The e-commerce subsidiary of the Casino group, bought in March 2024 by the consortium composed of businessmen Daniel Krestinsky and Marc Ladreit de Lacharrière, backed by the investment fund Atestor, is in the midst of a transformation. After implementing a savings plan of 120 million euros in 2022-2023, to invest 160 million euros over the same period, Cdiscount’s stakes are clear.We want to conquer the market again“, Thomas Métivier, CEO of Cdiscount, tells us.

Like the other subsidiaries of the Casino group, led by Jean-Charles Naouri from 1997 to 2024, Cdiscount has suffered from poor management and a glaring lack of investment, to which is added an environment that has been unfavorable for consumption since the health crisis. The proof is that in 2022, Cdiscount’s turnover, i.e. the addition of sales made directly and those made by third-party merchants on its marketplace, plunged by 15% over one year, to 3.5 billion euros. EBITDA (gross operating surplus) halved to 50 million euros and the net loss was multiplied by a little less than three over one year, to -128 million euros compared to -51 million in 2021. There was an urgent need to review the copy and transform the model to stop the haemorrhage.

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A sanitized model

The second largest e-commerce player in France behind Amazon, with a turnover of 2.7 billion euros in 2023 but a net loss of 100.4 million euros, has rolled up its sleeves and decided to completely reverse its strategy. The objective? Return to profitability by switching to a marketplace model composed of third-party sellers without completely breaking with its direct sales activity. Today, 65% of Cdiscount’s activity is carried out via the marketplace, compared to 40% in 2019, and 35% in direct sales. As a result, “we have cleaned up our model“, believes the CEO. The interest? More product innovations from the 13,000 sellers present on the platform, logistical savings for Cdiscount, particularly on storage, and a plethora of product offerings. “Today, we offer 50 million items to our 8 million customers, including 30,000 in direct sales.“, Thomas Métivier tells us.

To attract new consumers, Cdiscount’s message is simple: remind people that it is unbeatable on prices. Since June, it has been proclaiming this loud and clear by indicating on tens of thousands of products a comparison between its price and that of the cheapest competitor, over the last 30 days. On average, Prices are 10% lower at Cdiscount. «We monitor the price of 1.5 million products daily to ensure they are the cheapest on the market.“, says Thomas Métivier. And it seems to be working! Since this display was put in place, the click rate on these products has increased by 10 to 20%.

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Promotional operations, clearance sales…

Another way to attract customers: frequent promotional meetings.Every other weekend, we offer “discount weekends” with a highlighted product category and we are committed to having prices similar to those practiced during the Black friday (promotional operation carried out every year in November with ultra-competitive discounts of up to -70%, editor’s note)“, explains the CEO. Depending on the season, this can include garden furniture, televisions or even household appliances. Added to this are occasional clearance operations, for example on old series of Apple computers or even on Converse shoes.

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But what is Cdiscount’s recipe for offering such competitive prices? Partnerships with third-party sellers on the marketplace who offer exclusive products and prices, but also with major brands like Lego or Apple, all while limiting the number of intermediaries as much as possible to avoid unnecessary costs. And faced with the tough and growing competition on the e-commerce market with ultra-fast fashion giants like Shein and Temu, Cdiscount believes it has its place.We are not in direct competition with these brands (Cdiscount primarily offers home and high-tech equipment products and few fashion and accessory items, editor’s note). Their model will become more standardized. Just look at Shein, which is already starting to increase its prices.“, says Thomas Métivier.

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Although the road is still long, the efforts are starting to pay off.We are not yet profitable, but from month to month, we observe an improvement“, rejoices Thomas Métivier. In the first quarter of 2024, the business volume remains poorly oriented with a drop of 13.6% (-28.8% for direct sales and -4.2% for the marketplace) compared to the first quarter of 2023. But the EBITDA after rents records a growth of 36% to 7 million euros. Next deadline on July 30 with the publication of the half-year results.

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