Optimizing E-Commerce Profitability: Lessons from Carrefour and Beyond
E-commerce has become a defining force in retail, yet for many large retailers, the path to profitability remains elusive. As digital sales continue to grow, so do the challenges of managing costs, meeting customer expectations, and integrating new technologies. The experience of Carrefour—a global retail leader that undertook a sweeping digital transformation—offers valuable lessons for the industry. But the journey to e-commerce profitability extends far beyond any single case. Drawing on Publicis Sapient’s research, executive insights, and industry best practices, this page explores the operational, technological, and organizational levers that retailers can pull to improve margins and secure sustainable growth.
The E-Commerce Profitability Challenge
The pandemic accelerated the shift to online shopping, but it also exposed the persistent margin pressures facing retailers. According to a global survey of retail executives, nearly half of those with both e-commerce and brick-and-mortar operations say their online business is less profitable than their stores. Even among e-commerce-only retailers, 44% report they are not currently profitable. The gap between revenue growth and profit growth is a top concern, with 37% of retail leaders stating their e-commerce business is below profit targets, and 27% saying it is actively hurting overall profitability.
This profitability gap is driven by several factors:
- Rising fulfillment and shipping costs, especially for last-mile delivery and returns
- Increased complexity from omnichannel operations
- Legacy technology and siloed data that hinder operational efficiency
- Escalating customer expectations for speed, convenience, and seamless experiences
Carrefour: A Blueprint for Transformation
Carrefour’s journey illustrates how a holistic, enterprise-wide approach can unlock both growth and profitability. Facing declining market share and outdated digital capabilities, Carrefour partnered with Publicis Sapient to reimagine its e-commerce and omnichannel operations. Key elements of their transformation included:
- Organizational Simplification: Breaking down silos, flattening hierarchies, and fostering cross-functional collaboration to drive agility and customer-centricity.
- Technology Modernization: Migrating to cloud infrastructure, consolidating technology stacks, and adopting agile, DevOps, and in-house software development for differentiating capabilities.
- Unified Commerce: Creating a single digital entry point for customers, integrating web and mobile experiences, and connecting front-end, supply chain, and in-store operations.
- Data-Driven Decision Making: Building advanced analytics and customer data platforms to personalize experiences, optimize inventory, and inform strategic choices.
- Cultural Change: Embedding agile ways of working, empowering teams, and aligning business and IT around shared outcomes.
The results have been significant: improved customer satisfaction (with Net Promoter Scores rising dramatically), accelerated e-commerce growth (over 30% in food e-commerce, outpacing the industry), and a revitalized organizational culture. Carrefour’s experience underscores that profitability is not just about cost-cutting, but about building the right capabilities and mindset for digital retail.
Industry-Wide Insights: What Retail Leaders Are Prioritizing
Publicis Sapient’s research with global retail executives reveals clear priorities for boosting e-commerce profitability:
- Digital Customer Experience: 53% of retail leaders see investments in holistic, omnichannel digital experiences as the most critical lever for profitability. This includes seamless journeys across web, mobile, and physical stores, as well as frictionless checkout and personalized engagement.
- Omnichannel Commerce: 50% cite unified commerce as a top priority, with a focus on replatforming, expanding through marketplaces, and enabling dynamic pricing and promotions.
- Supply Chain Modernization: 43% are investing in optimizing shipping, offering multiple fulfillment options, and deploying micro-fulfillment centers and automated solutions to reduce costs and improve service.
- Marketing Technology and Data Monetization: 38% are prioritizing business intelligence, analytics, and retail media networks to unlock new revenue streams and improve targeting.
- Returns Optimization: With returns eroding margins, leading retailers are using data and AI to predict, prevent, and efficiently process returns, incentivizing in-store returns and optimizing reverse logistics.
Actionable Strategies for Improving Margins
1. Modernize the Supply Chain
- Integrate supply chain applications to improve visibility and responsiveness.
- Invest in automation and AI for demand forecasting, inventory management, and fulfillment optimization.
- Diversify suppliers and logistics partners to mitigate risk and control costs.
- Adopt micro-fulfillment and last-mile innovations to reduce delivery expenses and speed up service.
2. Optimize Returns Management
- Leverage customer and product data to identify high-risk returns and tailor policies.
- Encourage in-store returns to reduce shipping costs and create upsell opportunities.
- Streamline reverse logistics with dynamic routing and real-time inventory updates.
- Use AI to predict and prevent returns by improving product recommendations and sizing guidance.
3. Enable Unified Commerce
- Break down channel silos with a single commerce platform that supports all sales and fulfillment channels.
- Invest in mobile and app-based experiences to meet customers where they are.
- Implement headless and microservices architectures for greater flexibility and scalability.
- Personalize the customer journey using unified data and advanced analytics.
4. Harness Data and AI for Decision-Making
- Build a robust customer data platform (CDP) to aggregate and activate data across touchpoints.
- Apply AI and machine learning to optimize pricing, promotions, and inventory allocation.
- Monetize data through retail media networks and targeted advertising.
- Measure and iterate using real-time analytics and customer feedback.
5. Drive Organizational Alignment and Agility
- Foster cross-functional teams that combine business, technology, and operations expertise.
- Adopt agile methodologies to accelerate innovation and respond to market changes.
- Align incentives and KPIs around shared profitability goals, not just top-line growth.
- Invest in talent and change management to build digital fluency across the organization.
Pitfalls to Avoid
- Over-focusing on front-end experiences at the expense of supply chain and operational excellence.
- Underestimating the complexity of legacy systems and the need for technology modernization.
- Failing to align leadership and teams around a unified strategy and sense of urgency.
- Neglecting the cultural and change management aspects of transformation.
The Path Forward: From Survival to Sustainable Growth
E-commerce profitability is not a one-time project, but an ongoing journey that requires continuous investment, innovation, and alignment. The most successful retailers—like Carrefour—are those that take a holistic, data-driven approach, modernize their operations, and empower their people to deliver seamless, profitable customer experiences.
Publicis Sapient partners with retailers worldwide to unlock new sources of value through digital business transformation. By combining strategy, product, experience, engineering, and data, we help clients not only survive the pressures of today’s market, but thrive in the digital future.
Ready to optimize your e-commerce profitability? Connect with our retail experts to start your transformation journey.