Carrefour Planet:
An “Out of This World” Shopping Experience
In need of a major lift after a recent string of disappointing sales numbers, Carrefour is hoping to
change the consumer shopping experience once again with the Carrefour Planet concept.
Following up on our September article, in the upcoming pages we further explore how the
second largest retailer in the world has decided to “reinvent” the hypermarket. By widening
and beautifying aisles, increasing signage and brand marketing, and creating a more serviceoriented store, the Carrefour Planet stores will become a unique shopping destination.
With consumers in Western Europe beginning to shift to local stores and specialty retailers,
Carrefour will renovate 500 hypermarkets over the next 2-3 years at a cost of €1.5 bil (USD
2 bil) to bring customers back and regenerate their core hypermarket business. Of the 500
remodels, 245 stores representing 70% of Carrefour’s Western Europe hypermarket sales
will become Carrefour Planets. These stores are approximately 15,000 square meters
(160,000 square feet). The remaining 255 stores in France, Spain, Belgium, Italy and Greece
will be simply remodeled, lacking the square footage to house the Planet concept.
Early results show that 5 renovated pilot stores currently operating in France, Spain and
Belgium are outperforming their predecessors. But a delay in the rollout and disappointing
results in one store has raised some doubts about the impact of the new prototype. This raises
the question: Will price conscious shoppers be swayed by the wide range of services offered,
perhaps at the expense of discounts? With a prediction of 18% same-store sales growth for
Carrefour Planet stores in the 2010-2015 period, Carrefour is betting big on regenerating the
hypermarket business. Read on to see the exciting new features seen in the 5 initial pilot stores.
Key Points to Consider
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Carrefour Planet Store Tour: Delighting Customers
Increasing Shoppability and Enhancing the Shopping Experience
Leveraging Brands to Make Carrefour a Destination
Carrefour Planet Initial Results Mostly Positive
Carrefour Planet Store Tour: Delighting Customers
According to Carrefour CEO Lars Olofsson, Carrefour Planet has more ambitious goals than
simply satisfying shoppers. The store is designed to “delight customers” in every way. With a
broad range of unique service offerings and high emphasis on shoppability and presentation,
the store bills itself as a destination store.
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Perhaps the most significant change is the evolution from “everything under one roof” model to
a multi-specialist store. To compete with specialty retailers the store has developed 8 major
departments. Enormous, bright signs highlight the different specialty areas.
Health & Beauty
Fresh Market
Home
Source: Carrefour
Frozen Foods
Source: Carrefour
Organic
Source: Carrefour
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Fashion
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Leisure/Multimedia
Source: Carrefour
Baby (concept photo)
As the photos show, the store is designed to enhance the shopping experience with visually
appealing signage and brightly colored lights. Each department truly is unique, with different
services enhancing the retail environment. There are numerous food sampling stations across
the store. With over 3,000 organic products, the organic department has its own sample
station to promote its many offerings.
Source: Carrefour
Organic sampling station
Departments even differ from store to store. For example, one of the Spanish Carrefour Planets
features a large Iberian Ham section in the food market.
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The wine department is styled as a wine cellar with an automated electronic kiosk that gives
personalized wine recommendations.
Source: Carrefour
Electronic Sommelier
The store also has prepared food and demonstration stations.
Source: Carrefour
Sushi and Cooking Demonstration
Station
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To make the Health & Beauty section a more interactive experience the store has its own
beauty salon. For just €10 shoppers can get a 10 minute trim or manicure in the Carrefour
Beauty Bubble. Nearby the cosmetics section offers cosmetics advice and free samples.
Source: Carrefour
Getting a haircut in a Beauty Bubble
Source: Carrefour
Cosmetics Station
In addition to the traditional cosmetics station seen above, the store features virtual makeup
machines that superimpose any combination of cosmetics onto a picture of a customer’s face.
This convenient service allows shoppers to sample a variety of products without physically
trying them on.
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Making it easier for busy moms, the store even has a nursery/daycare area. Allowing parents
to shop on their own while their kids stay occupied makes the experience more relaxing and
may encourage shoppers to take their time walking the aisles.
Source: Carrefour
In-store Daycare/Nursery
Source: Carrefour
Video Game Demonstration Station
The store also employs a large seasonal department on a 7-times-a-year rotation. Located in
the center of the store, it lies adjacent to the 2,000 square meter (22,000 square foot) event
space on a bi-weekly rotation. This space will host a variety of events, ranging from cooking
lessons to massage sessions.
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Source: Carrefour
Wine Featured in Rotating Seasonal Space
Source: Carrefour
Fashion Featured in Rotating Seasonal Space
In bringing all of these services under one roof, Carrefour Planet aims to become a destination
for shoppers who have become tired of the traditional supermarket or hypermarket.
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Increasing Shoppability and Enhancing the Shopping Experience
In addition to the expanded range of services, the store aims to make shopping more enjoyable
through its decor and changes to layout. Utilizing in-store and mobile technology, improving
signage and reorganizing departments has made the store more welcoming and interesting
to shoppers. Expanding profitable departments and shrinking or removing others, the store has
attempted to optimize the customer experience.
The new stores appear to be much more open than a standard hypermarket. By widening
central alleys by 20% and lowering 30% of shelves, shoppers are able to see more of the
store. Signage was also completely overhauled, with bigger and better signage in addition to
more signs marking prices and promotions. Facing increased competition on price, the
retailer announced a plan of fewer, but bigger promotions. The retailer hopes this will keep
shoppers coming to the store and build excitement without cutting into margins too heavily.
Source: Carrefour
Wide Center Alley with Promotional Yellow Signage
Department Signage
In addition to wider aisles and lowering shelves, the retailer has reduced total SKUs by 15%.
For example, fresh food selling space was increased by one third, while SKUs were
reduced by 13%. Home and fashion selling space was reduced by 15% and 12%
respectively. Though the company has not released specifics, some departments have been
eliminated. This sort of SKU rationalization failed for Walmart, so it will be interesting to see how
the change in inventory will affect shoppers in Western Europe. The result of these measures is
a visibly more open and shoppable store.
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Source: Carrefour
Lower Shelves and More Open Space in the Organic Department
Carrefour Planet also employs a variety of electronic signage, ranging from touch screens for
interactive product information to dynamic digital displays.
Source: Carrefour
Dynamic Screen Promoting Sales
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The store has also taken several measures that allow shoppers to plan more efficiently and
reduce check out time. The new mobile app allows customers to view floor plans and use their
phones and iPads as a loyalty card.
Source: Carrefour
Customer Using Carrefour iPad App
Shoppers can also avoid lines by using Scan’lib, a mobile self checkout system. Using a
portable scanner, consumers can scan their purchases as they put them into their cart. Without
having to remove items from their cart, customers finish with an expedited checkout. This
service requires a loyalty card, so it keeps customers coming back to the store. 15% of sales
are done via the Scan’Lib system.
The Loyalty Program remains an important element of Carrefour’s business plan. The retailer
unveiled a new 3-tiered loyalty program for the Carrefour Planet stores. As seen below, the
more purchases one makes, the better rewards offered. This creates incentives for high
spenders to purchase more, while providing benefits to other shoppers to keep them coming
back.
Carrefour’s New 3-tier Loyalty Program
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Despite all of the promotion of new services and artistic signage, Carrefour Planet has done its
best to overhaul the shopping experience on all levels. Keeping in mind that many shoppers
frequent hypermarkets to buy a variety of goods at competitive prices, the store has improved
its layout and signage to best communicate the products available and value pricing.
Leveraging Brands to Make Carrefour a Destination
As a multi-specialist store, Carrefour Planet has foregone certain departments in favor of areas
that it excels in. Following this strategy, the retailer has turned to brands to run specialty
departments within the store. Partnering with Apple, Virgin, L’Oreal, and Réserves
Naturelles, the store showcases the recognizable brands to shoppers. These partnerships also
allow the store to differentiate itself from the standard hypermarket model.
Source: Carrefour
Virgin Branded Department
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Source: Carrefour
`
Apple Branded Department
In general, national brand presence is quite strong, with signage throughout the store promoting
many of the major national brands.
Multimedia section featuring Microsoft, Intel, HP, Lexmark, Epson and more
Source: Carrefour
Carrefour Planet is also increasing its Private Label penetration to give its customers an option
of lower prices. But the partnership with key national brands is an innovative way to bring
customers into the store. If successful, this may shift the way retailers and brands think about
their in-store marketing.
Carrefour Planet Initial Results Mostly Positive
After the first 4 months, the pilots have shown improved sales and have mostly met
expectations. Of the 5 pilot stores, only the Ecully location has not met the stated goals.
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Posting a modest 4.7% gain in sales after 3 months, it failed to meet the 10% goal. At an
estimated remodel cost of €4.2 (US $5.5) million per store, the company expects much better
results. More encouragingly, the Venissieux store has performed well, with a 10.7% gain after 3
months. An additional 5 stores slated to be opened in late 2010 were pushed back to 2011,
likely to give the company more time to review results and update strategy. Overall the 5 pilot
stores have seen an increase in sales and traffic.
Belgium
France
Spain
180%
175%
160%
140%
120%
100%
80%
60%
73%
40%
20%
0%
Carrefour Planet
overall Like for Like
Sales after 3 months
31%
28% 32%
24% 18% 26%
Source: Carrefour
Selected Like for Like sales data by market and department after a
few weeks
As the graphs show, initial results are positive. Of course, it is worth noting that this is a
selection of data released by Carrefour and we are still waiting for a full release. Additionally,
many of these departments are doing especially well because of the new format. For example
the square footage of the Organics department was increased by 200% and Beauty by
40%, predictably driving sales upward. With a goal of 18% like for like sales increases for the
2010-2015 period, the stores must maintain high growth after the novelty of the concept has
worn off. With many shoppers coming out of the recession more sensitive to prices, will this
reinvented shopping experience be able to compete with discounters? And finally, with fewer
SKUs, more services and more open space, will the stores be able to sell sufficient volume to
be sustainable in these competitive markets?
Conclusions & Implications to Retailers and Suppliers
After significant consumer research Carrefour has made a major move to transform its Western
European business. Regenerating its hypermarket banners brings the focus back to the
retailer’s home market. Relying on a more efficient operation the company claims that supply
chain efficiencies will offset the high costs of remodeling. After shedding its Thai assets in
November this year, the company is betting heavily on France, Spain and their neighbors to
escalate sales numbers.
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The new stores were given a complete remodel and promise to be an entirely new shopping
experience. By shifting department structures to better compete with specialists and adding
services and shoppability to differentiate from other hypermarkets, the stores look to be in
great shape to bring in new customers. If their improved supply chain is able to keep prices
competitive the new stores should be in an excellent position to retain customers in the long
term.
With 245 new Carrefour Planets to be launched in the next 2-3 years, these new stores will
have a serious impact on the European retail landscape. But with somewhat mixed results,
some doubts are creeping in. Interestingly, Carrefour has also just begun piloting Carrefour
Express and Carrefour City Café, two convenience formats. But with Carrefour Planet being
heralded as a reinvention of the shopping experience, one has to wonder whether Europeans
might simply prefer lower prices. Carrefour hopes that the unique Planet stores become enough
of a destination to overcome this challenge and lift sales in Europe to previous highs.
Retailers:
The Carrefour Planet banner is a new approach to the underperforming hypermarket segment.
Focusing on the shopping experience may be the answer to creating a unique store that drives
traffic.
• Shoppability is become increasingly important among big box retailers
• With customers sacrificing time and gas to make the trip to hypermarkets and
superstores, stores need to provide extra services and an enhanced experience to make
the trip worthwhile
• As e-commerce continues to grow, brick and mortar stores must think about how they
can make up for the gap in convenience, and sometimes price
• The move towards multi-specialist stores shifts the competition back towards specialist
retailers
Suppliers:
With the focus moving towards the shopping experience, brands must keep up with partnerships
and interesting displays
• An extremely brand-heavy store, suppliers should pay special attention to the success of
branded store-within-a-stores and retailer-brand partnerships
• Suppliers must adapt to the experiential aspect of the store, adapting their own products
to fit within the greater theme
• The reductions of SKUs by 15% has serious implications for suppliers, especially those
in categories that are being removed completely
As always we appreciate your comments and feedback
Let us know what you think!
Gabriel Webster
Research Analyst
RetailNet Group
[email protected]
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