Carrefour in China launches 100% digital loyalty programme
Eco, healthy and Jamie Oliver
Carrefour may be following a culling strategy in Europe, where it announced plans for 250 store closures in 2018, but in China profits are up 11% and announcements coming thick and fast.
On the loyalty front, Carrefour China has launched a 100% digital loyalty programme, working that focuses on health, no waste and Jamie Oliver storage and cookery items. Working with Brand Loyalty for the collectables, shoppers are encouraged to collect stamps digitally through the WeChat social media platform, which has more than 9 million members. Collectors can also share stamps with friends and family in WeChat, and receive extra bonus stamps for signing up for the functionality.
This is the first time Jamie Oliver products have been available via a loyalty programme in China.
To say business is booming for Carrefour in China is something of an understatement. The supermarket chain achieved €45mln operating income from its 245 outlets and online business, which it put down to investments in previous years in boosting its operations and profile there. The company said it has transformed the commercial model of its Le Marché hypermarket chain, and boosted sales online. An investment in technology allowing facial recognition and Scan & Go had particularly paid off.
In Europe, it is the vast hypermarkets that are struggling the most, and which are being culled by Carrefour. If the China digital model is transportable to more traditional markets, then the shake-up and changed fortunes may be replicated.
Carrefour’s first ‘connected store’ was in Tianshan Roiad where the “Le Marché” opened in 2018 with a wide selection of high-end products, a high-tech, lounge-like atmosphere for greeting customers and a host of digital tools.
The smart life store was the culmination of a long-coveted partnership with Tencent, which was sealed earlier last year. The Chinese internet company is experimenting with its new facial recognition payment method throughout Carrefour and hoped that it will eventually fully replace Tencent’s WeChat mobile payment system. However, Carrefour’s latest loyalty venture points to a continued relationship with WeChat.
French companies have worked hard to build close ties with Chinese tech firms to meet the demands of a younger, connected clientele. Facing entry barriers including local market trends, cultural norms, and complex policies and regulation, joint ventures and partnerships have proved the way forward, helped by the French embassy, through its R&D Club.
For the past two years, Tencent’s longtime rival the Alibaba Group has been introducing similar ultra-connected concept stores all over China through its retail brand Hema, putting a strain on Carrefour’s traditional supermarkets and making them seem outmoded. Hema added 30 stores in Beijing alone throughout 2018.
In France last year, Carrefour partnered with Google to sell its products using three different channels: Google Home, Google Assistant and its e-commerce platform Google Shopping. The partnership also comprises a deal with YouTube to feature links to Carrefour’s e-commerce platform on direct ads. Again this is aimed at connecting with younger customers.
According to Marie Cheval, who heads the company’s digital transformation, Carrefour wants to achieve US$5 billion in food e-commerce sales by 2022.
Through its agreements with WeChat, Tencent and Google, Carrefour is making headway in its digital transformation, but France may well prove the hardest market to win over as it is still embarked on a struggle for technological independence.