SOGO uses technology to create peak scenarios for experiential warming

        In recent years, "digital transformation" has swept across various industries. A pandemic has forced the department store industry, which used to be the strongest in terms of human to human interaction, to accelerate its digital process. The accumulated digital assets have become the key to the post pandemic integration of online and offline, and to vigorously promote the consumer journey.

                Macy's, the American department store, announced its "A Bold New Chapter" strategy this year to revitalize its brand by shifting towards a more refined and high-quality shopping experience for sustainable growth. Through member data analysis, develop in store app application functions, add key category service personnel, and strengthen product display to enhance consumer store experience. In the financial report released in August 2024, the "First 50" store, which serves as an experimental field, has achieved sales growth for two consecutive quarters, demonstrating the success of the company's strategic direction.

        Returning to the essence of business, FE SOGO Department stores is also thinking about how to use technology and brand cooperation to build the best scenarios, connect consumer journeys, and promote peak experiences that make consumers pay; Behind the guidance of customers into the store, product recommendations, services, checkout processes, and even repurchase behavior, lies the company's digital transformation strategy.

        Joining forces with tech giants to enhance OMO and become the 'most customer-oriented department store'

        Have you ever had the experience of browsing on the internet or DM and walking into a department store where a coat that you didn't find particularly attractive was recommended by a salesperson, but you wanted to try it on? At the moment you put it on, it was as if your name was already written on it, making you place an order without any consideration?

        According to a survey by the US Retail Database, over 90% of consumers have returned to physical stores after the pandemic. Renowned management consultant company L E. K. Consulting also pointed out that among the digitally native Generation Z, up to 60% of people prefer to shop in physical stores, and 28% hope to interact with store staff. In fact, through digital analysis of members and the establishment of personalized recommendation databases, it is also a strong driving force for consumers to pay for the "peak experience".

        Creating peak experiences that move customers and understanding their online and offline consumption footprints can help us understand the consumer journey and identify key milestones to strengthen our betting resources. In recent years, the popular keyword in the retail industry, "OMO" (Online merge offline), emphasizes the seamless integration of online and offline services. However, consumers wander between multiple screens and channels every day, receiving a large amount of information bombardment, and their focus is infinitely divided, resulting in fragmented consumer footprints. According to a survey by Microsoft, consumers' attention span has shortened from 12 seconds in 2000 to 8.25 seconds in 2015, even shorter than goldfish with a memory of only 9 seconds! Therefore, analyzing and processing the massive and dispersed customer footprints has become a major challenge for us.

                In this regard, the strong information team of FE SOGO Department stores plays an important role, not only connecting branch business information, member footprints and preferences, but also further utilizing consumer information, collaborating with the rising retail media network RMN (Retail Media Network) in Taiwan's retail industry in recent years, cross platform and cross channel, to have a more detailed understanding of member appearances. At present, FE SOGO Department stores have utilized the SOGO App to grasp over 1.5 million member information in the process of digital transformation of member information. Based on this, they have developed a member identification mechanism called MUID (Merchant Unique ID), which identifies and compares the scattered member consumption history in various stores in a secure manner, enabling the SOGO customer data platform to accurately label and communicate. As for the massive storage and calculation of consumer information, as well as the real-time response to consumer app needs, we have collaborated with international technology giant Amazon AWS services to significantly improve computational and analytical efficiency, and also enhance the smoothness of customer experience such as app redemption and queries.

        In addition, "precise personalized services" are also the direction we strive for. Through the App and Bluetooth induction, in store members can receive personalized product recommendations or make appointments for commonly used services. After importing AI, it can accelerate the use of data to improve experience and consumption, and then collect consumption behavior to enrich data. This positive flywheel achieves the goal of being the department store that understands its customers the most.

        SOGOplus: Differentiated and Innovative Sustainable Business Model for Department Store E-commerce Services

        The online shopping environment is an inevitable complement to OMO's full domain services. When SOGO launched its e-commerce services, it sought a differentiated business model in the OMO goals of "increasing member stickiness" and "improving flow and consumption both online and offline", breaking away from the price competition of mature pure e-commerce brands in the market. Our pioneering ESG concept online shopping platform SOGOplus is a successful attempt.

        Since 2018, FE SOGO Department stores have held the largest small-scale agricultural exhibition in Taiwan at Zhongxiao Hall, leading the trend of green consumption in department stores. Fuxing Hall has also continued to hold the largest social innovation exhibition in Taiwan; Over the past six years, more than 2 million small farmers and consumers have benefited. We have selected high-quality brand coaching cooperation from previous events, and when SOGOplus was launched, we brought the small agricultural exhibition activity online, becoming a powerful asset for SOGO to create the only green shopping platform for department stores. We use the 24/7 online platform and selected high-quality agricultural specialties to communicate with the high consumption customer group of SOGO supermarkets. In just two and a half months since its launch, the brand's voice has grown 13 times, and it has driven the overall voice of the small farmer brand to grow by 47% annually, effectively establishing its positioning and gaining momentum.

        In addition to small farmer brands, SOGOplus has also partnered with other ESG compliant brands to launch their products. This not only encourages consumers to pick up their goods in store to reduce carbon emissions from home delivery packaging and transportation, but also increases opportunities for offline customer guidance and stimulates consumption. SOGOplus's online categories range from makeup and skincare to home decor cookware. Since its launch one and a half years ago, the website's traffic has grown by about 20% compared to the same period last year, and its monthly business performance has doubled compared to the same period last year. This shows that it has successfully accumulated consumer recognition. Its unique green e-commerce positioning has also been recognized by multiple ESG awards. Meaningful consumption "has become a value that Taiwanese consumers value. FE SOGO Department stores use e-commerce OMO services to communicate ESG with consumers and gain new sources of benefits from differentiation.

                Future outlook: Joining hands with AI and consumers to move towards sustainability

        Looking ahead to the future, FE SOGO Department stores not only continue to advance on the existing digital transformation blueprint, creating peak experiences for consumers with digital and AI technology, but also uphold our DNA of focusing on sustainability, improving management efficiency through technological power, leveraging channel influence, and moving towards sustainability with customers.

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