El Corte Inglés takes new steps in its strategy of opening new business avenues through links with third-party companies.
Alliances that it has developed for decades in its physical stores but that it wants to fully exploit in its renewed omnichannel strategy, with new business bets such as logistics activity linked to online commerce.
Thus, the distribution group chaired by Marta Álvarez are in negotiations with 100 brands to become their logistics partner in this field.
In other words, assume all the processes related to this operation from beginning to end, taking advantage of the capacity of its logistics platform.
A kind of outsourcing by these brands, which before the confinement were reluctant to sell their products online and have since done so on the El Corte Inglés website, as the company itself indicates in the brochure of its latest bond issue .
But the next step is to deepen that relationship: "We are currently negotiating with these firms to provide them with a complete and end-to-end logistics service on our platform," the document says.
El Corte Inglés would not only act as a showcase for the products, but would also take over the complete logistics management of each firm.
Something that fits with the message that the president, Marta Álvarez, gave at the shareholders' meeting last summer.
In it, he explained, among other things, that "in logistics we are developing new areas of activity from which we hope to present visible results soon."
This negotiation is the first step, although as the company explains, these are conversations for which there are still no agreements closed.
More information
El Corte Inglés plans to raise a minimum of 2,600 million in funds
The appraiser reduces the value of his properties to 16,500 million due to the Covid
El Corte Inglés boasts in its brochure of its capabilities: "We have a solid platform that includes road transport nationwide, last-mile delivery, an exclusive and experienced network and a unified and coordinated platform."
It explains that 84% of the Spanish population lives 40 minutes by car from one of its stores and that it will extend the same day home delivery to all territories in which it has a home delivery.
"We have strategically located stores, which we use as warehouses for deliveries, and which allow us to reach customers faster than our competitors," he explains.
Before Covid-19 exploded, the company says, its logistics platform was working at 50% of its capacity.
Now he tries to get all the juice out of it.
"We want to extend our offering to third-party brands by leveraging end-to-end and distribution capabilities to help brands become more efficient."
And he gives two examples, Nike and Pepe Jeans, who already use them "to take advantage of our logistics capabilities and reduce costs."
Complete strategy
A boost that is accompanied by the recently released mobile application, which has already exceeded 150,000 downloads, and the El Corte Inglés Plus service, a flat rate of 19.90 euros per year to receive orders in two hours without shipping costs.
But commercial alliances also extend to the world of physical sales, and El Corte Inglés wants to intensify them by promoting spaces dedicated to third-party brands or corners.
In recent months, companies such as Covap, Costa (Casademont) or Huerta de Carabaña in food, have increased their presence in department stores.
In Violeta by Mango, Scalpers or Trucco fashion, while GAP will maintain its corners despite closing its European stores.
Pepe Jeans also grows, despite reducing its Spanish network.
In fact, the distribution giant assures in the brochure sent to investors that "for many brands, El Corte Inglés is a preferable alternative to maintaining their own stores at street level."
For example, again, Pepe Jeans, which maintains or even expands its presence in El Corte Inglés while reducing its network in Spain.
To defend this idea, he gives some data: according to an internal study carried out in the last three years, these brands sell 30% more in the corners of El Corte Inglés than in their stores.
"Sales productivity is also higher than the industry average, with an average conversion rate of 68% and 72% in customers of the El Corte Inglés card."
These are 11.5 million people to whom these firms have access, as well as the 700 million who enter one of their centers at the end of the year.
In addition, the company adds, 50% of its clients have revenues of more than 1,500 euros, when at a general level it is 30%.
A new relationship with the brands
Third brands Two years ago, El Corte Inglés implemented a new relationship model with third-party brands that sell their products in their department stores in dedicated spaces.
They must pay a fixed amount regardless of the level of sales, plus a variable amount that depends on the income generated in the department stores where they are located.
Princess, 'confined'. As of this Monday, the mobility restrictions approved by the Community of Madrid come into force, affecting 32 health zones in the region, also in the capital. In one of them, that of Guzmán el Bueno, the Princesa department store is located. This can keep the doors open, even with a capacity higher than the one in the alarm state, of 75%, although according to the norm, citizens who do not live in them are not allowed to enter the affected areas, except to work or essential issues.