Carrefour Strengthens Customer Loyalty and Brand Affinity with Maxxing

Business Challenge To maintain its leadership in the hyper-competitive retail grocery industry, Carrefour sought to gain greater control over its marketing processes with the ultimate aim of strengthening customer loyalty. Solution Carrefour teamed with Maxxing to implement the Maxxing Intelligent Promotions SuiteTM which enables Carrefour to control the planning, creation, execution and analysis of all targeted promotions campaigns across its store formats. Key Business Benefits -Improved category pricing and margins through direct control over global brand and private label target marketing initiatives. -Increased sales, shopping frequency and basket size with targeted promotions based on real-time customer behavior and the ability to instantly react to store-level trends as they emerge. -Facilitated customer insight sharing and collaboration between trading partners to plan target promotions strategies, budgets and campaigns.
Carrefour has grown to become the worlds second largest retailer and operates four main formats: hypermarkets, supermarkets, discount and convenience stores.

The Rules of the Game are Changing

As grocery retailers battle for market share, the competitive landscape is being altered dramatically. While the traditional supermarket format continues to account for the largest percentage of grocery purchases, consumers are increasingly turning to multiple retail formats. Foremost among these are hypermarkets, whose broad selection of groceries and general merchandise provide consumers with the added benefit of one-stop shopping as well as low prices. And within both - Herv Thoumyre retail formats, a different kind of shift is Chief Information Officer playing out on the shelves. In an effort Carrefour Group to sustain growth, increase margins and strengthen their brands, grocery retailers are now offering their own private labels alongside branded products. The battle for the grocery wallet share is intensifying and the rules of the game are changing.

Our new model for managing promotional campaigns allows us to get closer to our customers, gives us greater control over our targeted marketing activities and vastly improves our overall organizational effectiveness.

A Fresh Look at Promotions

Retail grocery chains realize that to sustain their profitable growth in an increasingly competitive environment, strengthening customer loyalty is a strategic priority. To engender maximum satisfaction from its customers, grocery retailers have traditionally focused on the most visible and highestprofile elements of the customer experience, from the assortment of products they stock, to the look, feel and layout of the stores, to the courtesy of their employees. Equally important to the customer experience,

 Marketing Benefits -Increased frequency in targeted promotions due to a significant reduction in the time required from campaign planning through execution and analysis. -Reduced marketing costs by minimizing dependence upon expensive and frequently ineffective marketing agencies, outsourcing firms, coupon services and clearinghouses.

though less visible, is the value customers derive from their relationship with the retailer through promotional activities such as points-based loyalty programs and targeted couponing. However, while promotional practices are well-established, the reliance on third-party service providers to administer these marketing programs has made it difficult for retailers to apply them with any real precision, react real-time to buying behaviors, trends and events, measure marketing effectiveness and share customer insight with trading partners. That is because this traditional solution provider model keeps retailers far removed from the information they need to benefit from targeted promotions. Carrefour (www.carrefour.com), the worlds second-largest retailer, saw the opportunity to enhance its business performance and become an even stronger competitor by embracing a new promotional standard. Carrefour recognized the importance of customer loyalty to its future growth and how leveraging the strength of the Carrefour brand across its supermarket, hypermarket and convenience stores would help to achieve a competitive advantage by creating a common customer experience. As part of this strategy, Carrefour sought to enable smarter, more effective and more personalized promotions and coupons that, instead of being unique to a particular Carrefour store format, would span them all, thus enhancing loyalty to the Carrefour brand across all stores. Achieving this would require Carrefour to redefine its processes, leverage information as a strategic asset and transform its existing systems without disrupting instore operations. It saw Maxxing, whose parents company Mapping has a well-established track record serving over 5,000 worldwide customers of all sizes with enterprise content management and workflow solutions, as the organization with the greatest expertise and best qualifications to help Carrefour reach this vision.

-Extended marketing reach through coordinated, multi-channel deployments of offers and improved redemption rates.
Merchandising Benefits Greater awareness of consumer trends, behaviors and patterns resulted in optimal merchandising strategies that reduced the costs of inaccurate product assortments, volume surges, demand uncertainties and markdowns. Sourcing Benefits -Deeper understanding of customer based analytics and segmentation created better results in the private label/global brand merchandise mix as well as provided a solid basis for collaborative product design. Inventory Management Benefits Targeted promotions at the store level in response to dynamic events decreased excess inventory and outof-stocks. Manufacturing Benefits Improved merchandising insight and sourcing accuracy minimized spikes in the manufacturing process, lowered inventories, required less direct labor and facilitated better raw material negotiations.

The Maxxing Intelligent Promotions SuiteTM

Carrefour required a solution where loyalty sales and profitability could be enhanced by intelligent promotional offers that reflect each consumers individual purchasing patterns. One of Carrefours most important requirements was adaptability, both in terms of the systems ability to configure highly tailored offers for specific customer segments and in its ability to integrate with existing IT infrastructure. Maxxing integrated the Intelligent Promotions SuiteTM into Carrefours core retail systems, from point-of-sale terminals to back-office systems and all points in between. On top of this infrastructure, Maxxing defined a new process flow that leverages real-time business intelligence to create more effective, dynamic and profitable promotion programs. In addition to enabling smarter programs, the solution delivers a quantum increase in the degree of flexibility and control Carrefour can exercise in creating, monitoring, managing and analyzing these programs. The seamless quality of the Maxxing solution makes this possible and enables Carrefour to develop a deeper understanding of and relationship with its customer base.

Opportunity through Greater Insight

By tracking transaction history, Carrefour can leverage its in-house analytics capability to determine not only which products customers buy, but also to which promotions they are most likely to respond. From this information, Carrefours marketers can further glean insights such as: who are its most profitable customers; what products they purchased; and, perhaps most importantly, what products would they likely be willing to buy if the incentive was right. A good example is a customer segment that may purchase organic food products, but has yet to try organic health and beauty aids. Maxxings Intelligent Promotions SuiteTM enables company marketers to craft a highly-sophisticated and targeted promotional program to incentivize this subset of customers to try this or any other mix of products.
But in the big picture, it is campaign execution capabilities that make the Maxxing solution truly stand out as first of its kind. It isnt just that Carrefour is the first grocery retailer to perform its own targeted promotions and couponing; its also the unprecedented agility that Maxxing gives Carrefour in executing promotional campaigns within individual store locations. When Carrefour wants to promote, for example, a certain brand of soft drink to a particular segment of customers (based on their history of purchasing specific products), available promotional tools include coupons for current use, coupons for use in later transactions, and point-based incentives related to its loyalty program. Once Carrefours marketers determine the optimal mix to achieve the desired goal, these rules are defined in the Maxxing Intelligent Promotions SuiteTM and then propagated out to each of Carrefours stores where the software automatically orchestrates the presentation of offers on a customer-by-customer basis. Triggered by the customers purchases and the scanning of the loyalty card during the checkout process, Maxxing first applies its rules to determine which offers are available to the customer, then queries Carrefours customer loyalty application to determine point balances. Combining and processing this information, the Maxxing solution then determines the optimal incentive and sends it back to POS terminals at the check-out counter. Maxxing then fulfills the offer by printing the coupon, issuing the discount and/or updating the customers loyalty account, as well as automatically redeeming and reconciling the offer. The entire process takes less than 1 second to complete. Maxxings ability to coordinate and deploy intelligent promotions through kiosks, mobile phones, Web sites, and hand-held devices attests to the flexibility of its architecture.

Carrefour took full control of its end-to-end couponing and promotion systems. By relying on its own business intelligence and analytics instead of third parties, Carrefour can craft highly targeted campaigns, execute them more rapidly and gauge their impact instantaneously. This new model also provides more direct support for Carrefours efforts to strengthen customer loyalty by creating a common customer experience across all of its retail formats.

33,000 point of sale terminals connected worldwide. 20 million cardholders and 6 million coupons issued per day in France. 400 active campaigns and 2 million coupons issued per day in China. 3 month implementation with a payback period of around 1.5 years.

With the Maxxing Intelligent Promotions SuiteTM, we have a unique opportunity to be both customer and product-centric in the way we manage our targeted marketing campaigns across our different store formats throughout the world.
Grard Castrie Chief Marketing Officer Carrefour France

Taking Control
With the Maxxings Intelligent Promotions SuiteTM deployed across its French, Chinese, Taiwan, Turkey and soon Middle East stores, Carrefour gained control over and dramatically improved the effectiveness of its marketing capabilities. Operational efficiency is another result, evidenced

About Maxxing
Maxxing is a division of Mapping Group which has served the content management and workflow needs of 2,500 worldwide customers for over 22 years. Maxxings Real Time Intelligent PromotionsTM has planned, designed, executed and refined over 100,000 targeted marketing campaigns from 4,000 retail outlets generating 800-million promotions that have reached over 25-million consumers through a variety of multi-channel distribution methods including in-store devices, mobile applications, location based services, social networks, digital advertising and coupon aggregators.
Maxxing, Inc. 1501 Broadway, 12th Floor New York, NY 10036 +1 646-571-2077 www.maxxing.com All Rights Reserved 2011. Maxxing, the Maxxing logo, Maxxing.com and the Maxxing Intelligent Promotions Suite are trademarks of Mapping Group SAS. Other company, product or service names may be trademarks or service marks of others. This case study illustrates how one Maxxing customer uses Maxxing products. There is no guarantee of comparable results. References in this publication to Maxxing products or services do not imply that Maxxing intends to make them available in all countries in which Maxxing operates.

by the significant reduction in time required from campaign planning to execution, which in turn enables Carrefour to undertake more frequent targeted marketing campaigns. This is reinforced by Carrefours ability to monitor the effectiveness of its programs almost instantaneously and share detailed critical data, performance results and analysis with its trading partners. Most importantly, notes CIO Herv Thoumyre, the new capabilities enable Carrefour to create a common experience across all of its stores that strengthens the companys brand and the loyalty of its customers. Our new model for managing promotional campaigns allows us to get closer to our customers, gives us greater control over our targeted marketing activities and vastly improves our overall organizational effectiveness. says Herv Thoumyre. We see the success of our retail grocery solution as a testament to Maxxings vision, industry expertise and thought leadership.

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