Vusiongroup: Transforming the Retail Industry

How IoT is revolutionizing the retail industry?

Vusiongroup is among the fastest-growing companies in France. It leverages Internet of Things (IoT) technologies to deliver value to its customers. The company has seen strong expansion, not only in the French market but also worldwide. A recent multi-billion-dollar contract signed with Walmart highlights its potential and signals a new phase of growth.

In this analysis, we will explore the business model of the company, its value creation strategies, and examine the risks and opportunities the company faces as it scales.

Company overview

Vusiongroup’s primary business focuses on providing smart labels and IoT sensors tailored for retail environments. These innovative solutions are embedded with advanced IoT technologies that offer a range of valuable features, enhancing both store operations and customer experiences. Here’s how Vusiongroup creates value:

• Digital shelf advertising. The smart labels are capable of displaying dynamic advertisements directly on the shelves, enabling targeted promotions and enhancing in-store marketing.

• Enhanced worker efficiency. The labels help streamline picking and replenishment processes. By detecting empty shelves in real time, they can trigger automated replenishment orders, reducing downtime and labor costs.

• Seamless price synchronization. Vusiongroup’s labels facilitate automated price updates, ensuring that displayed prices are always accurate and synchronized with the retailer’s information and payment systems, minimizing pricing errors and improving customer trust.

• In-store mobile experience. The smart labels can interact with customers’ mobile devices, enabling a more personalized and engaging shopping experience, such as offering product information or promotions when scanned.

• Advanced monitoring and analytics. The IoT-enabled labels collect vast amounts of data, providing retailers with deep insights into inventory, customer behavior, and store performance, which can be analyzed for further optimization.

The labels connect seamlessly with Vusiongroup’s proprietary software through various IoT connectivity options (WiFi, Bluetooth, etc.). This software platform is a core component of Vusion’s business model, generating recurring revenue by providing ongoing services and updates.

With its software integrated into the customers’ information systems, Vusiongroup is well-positioned to offer additional value through new features, enhanced analytics, and tailored solutions, driving greater customer retention and unlocking further revenue opportunities.

The innovative solutions are central to advancing in-store automation, a critical factor in developing integrated omnichannel retail experiences. By blending physical and digital elements, Vusion helps traditional retailers compete more effectively with e-commerce giants, delivering greater value to customers while creating a more efficient and enjoyable environment for employees.

Vusiongroup estimates that its suite of digital solutions can boost retailer margins by 2 to 3 percentage points, effectively doubling profitability in many cases.

But there is more. The data generated by the IoT-enabled labels extends benefits beyond the store floor. This information can be leveraged across the entire retail value chain, providing actionable insights for both retailers and their suppliers. Key areas of impact include:

• Targeted promotions. Enhanced data analytics allow for more precise and effective promotional campaigns, increasing sales and customer engagement.

• Merchandising compliance. Real-time monitoring ensures that stores adhere to merchandising standards, improving product visibility and sales performance.

• On-shelf availability. The system continuously tracks inventory levels, minimizing stockouts and maximizing sales opportunities.

• Supply chain optimization. Data insights help streamline logistics, reducing costs and improving overall efficiency.

• Marketing campaign analysis. Retailers and Consumer Packaged Goods (CPG) companies can analyze campaign performance in real time, optimizing strategies for better results.

By providing these advanced capabilities, Vusion not only enhances in-store efficiency but also creates significant value for CPG manufacturers, positioning itself as a key data partner in the retail ecosystem.

2027 strategic plan and beyond

The ambition of the company is to establish itself as the leading Cloud IoT platform. By 2027, it aims to achieve a targeted revenue of 2.2B€. Starting from 1B€ in revenue in 2024, this represents a 30% CAGR.

The installed base of labels is projected to reach 2.3 billion units by 2027. The TAM is estimated to be around 10 billion labels. However, once the initial installation is completed, hardware revenue is expected to decline as the business transitions from equipment sales to renewal cycles. Given a 10-year label lifespan, the renewal TAM is estimated to be around 1 billion labels per year.

This leads to the long-term and next growth driver of Vusiongroup, the recurring revenue coming from digital software and solutions. From 8% of the sales in 2017 and 16% in 2022, this revenue stream should reach 30% of the revenue by 2027.

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