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Carrefour Bets Big On Digital
French supermarket giant Carrefour, regarded as a slow adopter of e-commerce, has announced a $4 billion plus five year strategy to leverage the boom in online grocery shopping before Amazon takes over.
Carrefour, the French supermarket giant, has unveiled its five-year strategic vision for leveraging growth in digital grocery shopping – a move many analysts would say is long overdue. Spooked by Amazon’s acquisition of Whole Foods in the US last year, Carrefour Chairman and CEO Alexandre Bompard revealed a plan to significantly reduce the size of its store network, cut 2,400 jobs and spend billions on improving its digital offering.
“I have a great ambition for Carrefour: To become the leader of the food transition by offering our customers, every day and everywhere, quality and trustworthy food at a reasonable price,” said Bompard. “To do this and return to a conquering dynamic, we must revamp our model, by simplifying our organisation, opening ourselves up to partnerships, improving our operational efficiency, investing in our growth formats, building an efficient omnichannel model and developing our fresh and organic products offer, notably under the Carrefour brand. This is the meaning of the ‘Carrefour 2022’ transformation plan that we are unveiling , and that the Group and its employees will implement with ambition and determination.”
A cornerstone of the transformation plan is forming a partnership with Chinese e-commerce giant Tencent and investing over AUD$4 billion over the next five years in digital shopping. The group will invest €2.8 billion over five years, or six times more than current investments.
Carrefour’s ambition is to become a key player in food e-commerce, with €5 billion in sales for the Group and market share of at least 20 percent in the food e-commerce market in France by 2022.
According to the company, Carrefour will rely on its physical network to offer to its customers a reliable and extensive omnichannel service. In France, home delivery will be extended to 26 cities by 2018, and 1-hour express delivery will be deployed in 15 cities in 2018. Carrefour must improve the quality of service and extend its Drive (buy your groceries online, collect from a convenient kiosk-style location) offer. As of 2018, 170 new Drive locations will be opened in France and the overall quality of service will be improved, notably thanks to the deployment of automated logistics means (partly-automated warehouse). Click & Collect will be expanded to more than half of the stores by 2019.
Carrefour will also be revamping the e-commerce storefront to unify the online customer experience. “The power of the Carrefour brand must be fully exploited to serve the ambition of an omnichannel food offer of reference in the 33 countries in which the Group is present,” says the company statement. “In France, to strengthen its digital identity, the Group will launch in 2018 a single website, Carrefour.fr, which will include all its generalist shopping offering. This single website approach will be rolled out in all geographies. To successfully implement the transformation of its e-commerce offer, Carrefour announces it has entered into a partnership with Sapient, a leading technology player of the Publicis Group.”
Carrefour shares rose more than seven percent following the announcement.