2020 will be a year we will all remember. We are suffering an unprecedented global pandemic whose effects are unpredictable and despite initial hesitancy the world has responded surprisingly quickly. Vaccines were developed in record time and countries began to find solutions to overcome the crisis, albeit with high human, social and economic costs. So we are now developing our business within a new global context.
At Falabella we were aware of our important role in this pandemic, because of our position in the supply chain. We took a dedicated and responsible approach that focused on protecting the health of our employees and customers.
Despite many obstacles and mistakes, we overcame this challenge, thanks to our employees and teamwork. We rapidly assumed our responsibilities, and we are proud to have retained many direct and indirect jobs and supported our customers, local communities and suppliers.
This year, successful companies were those that had flexible, scalable strategies built on digital processes and the agility, knowledge and resilience to address the unprecedented challenges of operating in a pandemic. All forecasts, and contingency models were overtaken by unimaginable events. However, we did not stand idly by at Falabella. We worked hard to adapt to this context and implemented countless changes within our companies. This was the opportunity to resolve our gaps and weaknesses. These issues had previously prevented us from serving our customers as we desired, but we are addressing them quickly in order to strengthen our services and retain our customers’ loyalty.
We can all become digital. We managed to achieve things that we would never have thought possible, regardless of age, gender or education. We managed to remotely and digitally resolve our requirements. We all appreciate physical contact, being able to meet, share, go to a store, to see and touch a product. The world is certainly more digital today than previously, so companies must be more flexible and offer several shopping choices. We live in a world where the physical and the digital realms complement each other in a way that improves our quality of life. Both physical and digital aspects are significant, which is where Falabella has an advantage that we can nurture and exploit.
Retail is probably the industry that experiences the greatest changes and innovations, and faces global digital competition. This environment means that only a cohesive team with a clear strategy and consistent performance will be successful. Despite the challenges imposed by the social unrest in Chile that began on October 18, 2019 and the pandemic, we comfortably secured the company’s liquidity and kept the company on an even keel, by accelerating the implementation of a balanced digital physical ecosystem. Accordingly, we have sacrificed short-term profits to strengthen our long-term strategy.
We want to simplify the lives of our customers, by providing them with products and services that meet their needs and aspirations. We want to be an integral part of our customers’ lives and transform how we engage with them. We are creating a platform where our products, own brands, services, loyalty and financing programs, and our stores, shopping centers and distribution centers simplify their lives. Therefore, we are actively promoting our Apps, which allow us to interact with customers in real time, either digitally or through a personalized experience when visiting our shopping centers, stores or branches.
The main objective of 2021 is to build a single Marketplace, as this e-commerce model has proven to be the preferred choice worldwide. It will become our digital mall. A mall that is independent of retailers, which will unify our customers’ shopping, payment and financing experience. It is being built on Linio foundations and will leverage the visitor flow from all companies in the group. Each Falabella store, such as Falabella Retail, Sodimac and Tottus, will still focus on their sales and products, in order to strengthen customer loyalty. However, this Marketplace will also provide many other sellers with access to our millions of customers. It is a transformational, philosophical and organizational step for Falabella. We will combine the best of each group company in a unique platform that will captivate customers with a variety of products and services that they desire.
This year we achieved significant growth in e-commerce and Marketplace sales. The remarkable impact on our long-term sustainability is that these digital sales were achieved using our own solutions, which maintained a direct relationship with the customer, without intermediation.
The road is long and difficult, with lower sales growth initially, but with better prospects for higher growth in the future. We have been able to rapidly develop our own technological solutions, due to the dedication of our Digital Factories, particularly our team in India. We have also been supported by various technology and logistics companies, who have become longterm strategic partners.
As the pandemic dissipates, our shopping centers and stores will increasingly contribute to our omnichannel proposal, which makes us distinctive. We have adapted our business to bring the physical and digital realms together in a compliementary manner that empowers them and provides our customers with better solutions. We are committed to making the experience of visiting our shopping centers more entertaining, personalized, and flexible. Our physical presence differentiates us. We have a retail proposal with a strong emphasis on our own exclusive brands, which will help us to retain customer loyalty.
Throughout the pandemic, we have been vigilant with our corporate governance, in progressing transparency and strengthening our control systems. Our commitment to respect people and the environment is unwavering. We value personal growth without discrimination by gender, nationality, or age.
We are convinced that profitability and positive social impact go hand in hand. We will continue with our support programs covering education, entrepreneurship, neighborhood improvement, professional training and environmental protection. We are proud to be the only Chilean retailer in the DJSJ index. We will continue to minimize our impact on the environment.
I cannot end this letter without passing on the Board’s heartfelt appreciation for all our employees. Without them we would not be discussing our recovery and the achievements in developing our physical-digital ecosystem. Thank you also to our directors and executives for their constant support during this tough year. Our organization and each individual member has shown a surprising resilience and ability to tackle problems and solve them. I am sure that despite everything we have suffered, and everything that is yet to come after the pandemic, we are already a stronger and better team.
We are creating a regional commercial leader, and I am excited to forge ahead with the great team that we have today.
Thank you very much,
Carlo Solari Donaggio
Chairman