Global-Indian Retail Scenario & Marketing Strategies by Carrefour's

8/14/2019 Global-Indian Retail Scenario & Marketing Strategies by Carrefour's

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Welcome to WASS

10/11/2010

Global- Indian Retail Scenario &

Marketing Strategies by CarrefoursBy Dr. Chandan A Chavadi


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Global Retail

Summary

Over 50 of the Fortune 500companies, and around 25 ofthe Asian top 500 companies,

are retailers.Market value

The global retailing industry grew by

1.5% in 2009 to reach a value of

$10,539.9 billion.

Market value forecast

In 2014, the global retailing industry

is forecast to have a value of$14,175.6 billion, an increase of

34.5% since 2009.


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Market segmentation I

Food and Groceryis the largest segmentof the global retailing industry,generating total revenues of $5,637.8billion accounting for 53.5% of theindustry's total value.

Market segmentation II

Europeaccounts for 37.4% of the globalretailing industry value.

Market share

Wal-Mart Stores, Inc. is the leading

playerin the global retailing industry,generating a 3.8% share of theindustry's value while Carrefour has amarket share of 1.1%


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The performance of the industry isforecastedto accelerate, with ananticipated CAGR of 6.1% for the five-year period 2009-2014, which is

expected to drive the industry to a valueof $14,175.6billion by the end of 2014.

The global retailing industry groupgenerated total revenues of $10,539.9billion in 2009, representing a

compound annual growth rate (CAGR)of 4.3%for the period spanning 2005-2009.

In comparison, the European and Asia-

Pacificindustry groups grew with CAGRsof 3.8% and 4.2%respectively, over thesame period, to reach respective valuesof $3,940.1 billion and $2,673.1 billionin 2009.


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The global retailing industry group is

defined here as the sum of six

segments, each comprising only

business to consumer (B2C) sales forthe following groups of products.

1) The apparel, accessories, and luxury

goods segmentincludes menswear,womenswear, childrenswear,

footwear, watches, jewelry and

related products.

2) The food and grocery segment

includes food, beverages, tobacco,

household care, personal care, and

related products.


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3) The electricals and electronics segmentincludes audio-visual equipment, fixedand mobile telecommunicationsequipment, computers and peripherals,domestic appliances, photographic

equipment, games consoles, and relatedproducts.

4) The house and garden segment includescarpets and floor coverings, domesticfurniture, garden products, home

improvement products, and related goods.

5) The media products segmentincludes books,newspapers, stationery, recorded music andvideo, and related products.


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6) The sports and leisure segment

includes sports and fitness

equipment, traditional toys andgames, and related products.


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Share of Organized Retailing in Countries

Country/Region Share of Organized Retailing

USA 80%

Western Europe 70%

Malaysia 50%

Thailand 50%

Brazil 40%

Argentina 40%

Phillippines 35%

Indonesia 25%

South Korea 15%

China 10%


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Indian Scenario

According to a McKinsey & Company reporttitled 'The Great Indian Bazaar: OrganizedRetail Comes of Age in India', organizedretail in India is expected to increase from 5

per centof the total market in 2008 to 14 -18 per cent of the total retail market andreach US$ 450 billion by 2015.

Indias retail industry accounts for 10percent of its GDP and 8 percent of the

employment to reach $17 billion by 2010.

Indias retail growth was largely driven byincreasing disposable incomes, favorabledemographics, hanging lifestyles, growth of

the middle class segment and a highpotential for penetration into urban andrural markets.


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Major Retail Chains in

India

Shoppers Stop

Big Bazaar and Future

Bazaar RPG group

Lifestyle

Trent Retail


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Major Players category-

wise

Apparel retailing ( Westside, owned byTatas Trent and Shoppers Stop ownedby the Raheja Group).

Food retailing ( Foodworld by RPG

Group and Food Bazaar of PRIL) Music and Entertainment ( Music world

of RPG Group and Planet M of Times ofIndia Group)

Book retailing ( Crosswords, Landmarkand Oxford bookstores)

Watches and jewelry retailing( Tataowned Tanishq and Titan)

Home Furniture ( Durian and GautierIndia)

Luggage (VIP & Samsonite)

Footwear retailing ( The Loft and Bata)


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Organized Rural

Retail Stores


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Carrefour Background Carrefour is the world's second largest

and Europe's largestretailerof groceriesand consumer goods.

The group operates more than 15,000stores(both company-operated orfranchises) through fourmain grocerystore formats: hypermarkets,supermarkets, hard discount, and

convenience stores.

Carrefour operates in Europe, LatinAmerica and Asia.

The group is headquartered in LevalloisPerret Cedex, France, and employsaround 495,000 people.


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The group operates about 1,302hypermarket stores across the world:228 hypermarkets in France, 494 inEuropean countries outside France, 288in Latin America, and 292 in Asia.

The group operates approximately2,919 supermarket storesin 11countries under the bannersCarrefourExpress, Carrefour market, GB, GS and

Champion.

Carrefour's hard discount segment, Dia,operates about 6,252hard discountstores in Spain, France (under the Edbrand), Portugal (under the Miniprecobrand), Greece, Turkey, Argentina, Braziland China.


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The group's other activities compriseconvenience stores, cash and carryfoodservice stores, and e-commerce retailformat.

Carrefour operates about 4,813convenience stores and 144 cash and carrystores.

Convenience storesare mainly operated byfranchiseesunder the banners Marche Plus,Shopi, 8 a Huit and Proxi in France; DiperDiin Italy; Carrefour Express in Belgium andBrazil; Carrefour 5 Minut stores in Poland;Carrefour City stores in Spain; and CarrefourConvenient Buy in Thailand.

Carrefour operates cash and carryfoodservice storesunder the trade namePromocash. Most of the cash and carrystores are operated by franchisees.


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Carrefour also sells its products

through various e- commerce

websites. Carrefour operates an

online grocery store, Ooshop, aleading French online supermarket

in terms of sales.

Carrefour France hypermarket's non-food website, CarrefourOnline.com -

- offers products such as leisure

products (DVDs, games, software,

music, books and more), audio and

video, household electrical goods, as

well as music downloads and even

flower and bicycle delivery.


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Carrefours

Strategies in China

As of July 2007, Carrefour operated in Chinathrough 100hypermarket, and around 255hard discount stores.

It had 300 million customers per year and

22,300local suppliers. It is the leading foreignemployer and employed 40,000employeesduring 2007.

First foreign company to enter the Chineseretail industry (1995).

Adopted decentralized management structure,where all store managers in China operatedwith complete freedom.

Stores designed according to the convenience

of Chinese customers.

When most foreign retailers viewed China as alarge market, Carrefour saw it as many smallmarkets.


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95%of the stock soldwas procuredlocally.

Ensured freshness, an attribute

considered important by Chineseconsumers.

Formedjoint ventureswith Chinesemanagement consulting firm ZhongChuang.

In 2004, Carrefour introduced ChampionSupermarket format.

A survey made available by Carrefourshows that the company's consumergroup in China comprises mainlymedium and low-incomeurbanresidents.


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This conclusion was based on survey resultsindicating that about 28 percent of itscustomers arrive on foot, 15 percent onbicycle and 20 percent by bus.

Carrefour sold variety of foods under oneroof.

Conveniencewas another factor thatCarrefour promoted.

The basket sizein the Chinese stores wasmuch smallerthan European stores.Chinese consumers bought in smallquantities, several times a week.

Daily shopping for fresh foods was widelyprevalent in China.

Established hypermarkets in major shoppingmalls.


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Store mangeralong withdepartment headdecided on theproduct mix.

To keep flexibility in supply chain,Carrefour use bikeif its the lowestcost and most efficient.

To differentiate imported productsfrom Chinese products, flag of thecountry from which the product hasbeen obtained was displayed on itslabel.

By 2006, 11 purchasing centershadbeen established across the country.


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Carrefour stores were locatedat the center of the city with

easy access to public transport.

It did not follow a particular store format and encouraged

store managers to come out with the best format for the store

and sales plan.


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Carrefour sold its own labelofproducts which were priced 20-40%below the market price.

Most of the Carrefours stores inChina were spread across severalfloor and ramp escalators.

The department selling fresh foodsand groceries were designed toresemble local outdoor market.

Ladies call out to customersayingCome here, this is fresh and good,

just like in street markets.


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The fresh foodsection was located

at the entrance in a clean

environment.

For selling fish, Carrefour adopted

different methodsstores located

near coastlineCarrefour sold live

fish, away from coastlineasconsumer preferred sold frozen fish.

In manyof the Carrefour stores in

China, consumers canbuy live fish,turtles and meat that was not

usually available in Europe.


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At Uighur, populated mostly by Muslims,Carrefour did not sell pork. All products soldthere (Uighur) was certified halal products.

For important festivals, Carrefour decoratedits stores according to traditional practicesand stacked with items like paper lanterns.

Carrefour promoted valuessuch asfreedom, responsibility, sharing, respect,integrity, solidarity and progress among theemployees.

Carrefour spent around 2% of its payrollcosts on training. Created the Carrefour

China Institute in 2000 in order to trainChinese staff to take positions ofresponsibility.

h d ff


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Carrefour Broad

based Strategies

Worldwide

Price: A Heightened offensive Commitment to low pricesthe core

strategy in all retail banners and in everycountry in which the Carrefour group

operates. The low price strategy hasbeen leveraged by three key strategies:purchasing synergies, price positioningand improved product presentation.

To ensure the best prices, Carrefour hascontinued to expand purchasingsynergies (pooled purchasing)with Dia.

Carrefour strives to be the price leaderthroughout the world by deploying an

ongoing and aggressive low-price policyand expanding its in-store promotionsand communications.

Th i d i f h Li Al P i


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The introduction of the Ligne Alerte Prix(Price Hotline) in hypermarkets in France inApril 2006 reflects this commitment.

The hotlinegives customers a key role in

competitive intelligence while providing themwith an opportunity to influence prices.Carrefour is committed to lowering its priceswithin 24 hoursif a customer identifies alower price at a competitors store.

In 2006, Carrefour Argentina made a strongimpression on consumers with a wide-rangingadvertising campaign. Launched on 23February 2006, the campaign helped tocement the reputation of Carrefourhypermarkets as a business committed tokeeping prices down. Throughout the country,

Carrefour promised the lowest prices on 800basic consumer goodsand invited consumerorganizations to verify its claim.


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Improved product presentation

By showcasing productsin display units or in their original

boxes rather than stocking shelves with products one by one,

stores save significantly on time and labour, resulting in lower

costs and lower prices for consumers.


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Products: An

Expanded Offering

One of the Groups strategies for

energizing sales growth is to offer a

broad, high-quality and innovative

array of both groceryand non-grocery products.

In France (2006), product ranges

were revamped andassortmentswere expandedwith 2,000 new

product listings sold under the

Carrefour name. In particular, two

new product lines for children were

added: Carrefour Kids(ages 4-10)

and Carrefour Baby (infants up to

age 2), developed in cooperation

with a committee of pediatricians.


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In 2006, Champion supermarkets in

France expanded their selection of

store-brand products, with 850 new

listings now available in stores:

Innovative fresh foods: mini fruits and

vegetables for children, microwavable

vegetables, and the first line of

cholesterol fighting yoghurt launched asa store brand.

Sophisticated gourmet products: 100

premium-quality product listings underthe Collection Champion brand name

are now competing with upscale

products from the major brands.


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Environmentally and socially

conscious products, like the many

eco-friendly household cleaning

products bearing theChampion Eco Plante name.

Carrefour and Tetra Pakhave

pioneered a consumer awareness

campaign in over 600 hypermarketsacross Europe. The scheme, which

was launched in early February, uses

Carrefour-branded milk and juice - in

specially designed Tetra Pak cartons

which provide eco-tips to

consumers. The products are on sale

in stores in Spain, France, Belgium

and Italy during EU Sustainable

Energy Week(9-13 February 2009).

Carrefour is making good progress in


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Carrefour is making good progress inreducing energy consumption in storesand in working towards its objective of a20% reduction by 2020compared to2004.

It is deploying innovative energymanagement systems, energy savinglighting and closed freezercabinets toachieve greater energy efficiency, withregular reporting to ensure it keeps on

track with targets. Carrefour is also developing solutions

for consumers such as the sale of greenelectricity to households and thegrowing offer of energy efficientproducts. Carrefour will also continue to

raise supplier awareness and facilitateefforts to improve their environmentalperformance.

L lt P I (2006) C f


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Loyalty Programmes:

More Benefits for

Customers

In France(2006), Carrefour

strengthened its appeal by

introducing loyalty card, now carried

by some 8.7 million customers. Afterthe introduction, hypermarkets

recorded an increase in both the

average customer purchase and the

number of customer visits.

Carrefour celebrated a highly

symbolic anniversary which offered a

5% discount year-round on 8,000

Carrefour brand products.


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T it i ti t it b t


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To express its appreciation to its best

customers, the banner developed

an exceptional promotional

campaign: a mailing sent to allcardholders, a radio campaign, a

special catalogue, anniversary

terminals and in-store displays.

The purposeof the campaign was to

offer a 40% reduction on 300

products over a 10-day period. The

campaign proved an enormous

success in Carrefours 218

hypermarkets in France, which in

two years have developed the

largest customer databasein the

countrys retail sector.

A l b t it t t !


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A consumer club to suit every taste!

To keep customers coming back, GB

in Belgium and Champion in France

have introduced a new concept:consumer clubs, which offer even

more advantages to loyalty

cardholders. Beauty Club, Baby Club,

Healthy Living Club, Gourmet Club:

every customer can find a club to

suit his or her lifestyle and needs.

On the banners websites and in

brochures, club members receive

practical advice from expertsand

exclusive offers in the form of

discounts on targeted products.


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Loyalty Card Statistics

8.7 million Carrefour loyalty cardholders in France

6.3 million Carrefour El Club loyalty cardholders in Spain

5.6 million Champion Iris cardholders in France

S i A Carrefour becomes a mobile virtual


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Services: A

Growth Engine

Carrefour becomes a mobile virtualnetwork operatorin France.

On 8thNovember 2006, following theexample of its sister unit in Belgium,

Carrefour France unveiled its newmobile phone servicean economical,user-friendly, no-obligation service thatreflects Carrefours strong commitmentto its strategy of innovation at every

level for the ultimate benefit of itscustomers.

Featuring prepaid services, a fixedpricing plan for both phone calls andtext messages and a reliable network,

Carrefour Mobile relies on a transparentmarketing campaign and a partnershipwith the European operator Orange.


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Home Computer Support

Fifty percentof French householdsown a personal computer, but

many report problems with installing, using and repairing their

equipment. The solution?

Carrefour Micro-informatique Assistance(Computer TechnicalSupport), available since 8 November 2006, in 86 hypermarkets in

southwest France and the Paris metropolitan area.

Experts provide technical assistancevia telephone from 8 a.m. to 10

p.m. seven days a week or in customers homes from Monday

through Friday.

Home training sessionsfor up to five people can be arranged upon

request.

Champion Service An array of synergies with Carrefour


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Champion Service

Packages An array of synergies with Carrefour

Introduced in May 2006, the

Champion Service Packages are

mainly comprised of Group servicesand draw on the expertise of

Carrefour hypermarkets. They

operate as follows: in-store flyers

offer a range of different services to

customers, available via a specialtelephone number. These packages

include a portfolio of 11 services in

four different categories:

Financial servicesincluding the PASS

card, personal loans, life insurance

and interest bearing savings

accounts.


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Insurance coverage, including homeowners and automotive

insurance, family protection and pet insurance.

Travel services, including car rentals in partnership with Avis.

Practical information, including a care hotline for disabled

and elderly individuals. This new service will both attract and

retain new customers.


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Documents

Global-Indian Retail Scenario & Marketing Strategies by Carrefour's