Case Study - Google Carrefour

318-0273-1
Purchased by Wanbing Z for use on the DME - Digital Marketin and E-commerce Autumn 2019, at Stockholm University.
Google-Carrefour Collaboration
Usage permitted only within these parameters otherwise contact info@thecasecentre.org

Taught by Dr Jon Engström, from 17-Nov-2019 to 31-Dec-2019. Order ref F368875.
A Strategic Deal for the Grocery Giant?
Case Study
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I
CoursePack code C-2979-333872-STU

Order reference F368875
This case was written by Jyothi Javalgi and reviewed by K. Bhagyalakshmi, Amity Research
Centers Headquarter, Bangalore. It is intended to be used as the basis for class discussion
rather than to illustrate either effective or ineffective handling of a management situation. The
case was compiled from published sources.
© 2018, Amity Research Centers Headquarter, Bangalore.
Website: www.amity.edu/casestudies/
No part of this publication may be copied, stored, transmitted, reproduced or distributed in

any form or medium whatsoever without the permission of the copyright owner.
Distributed by The Case Centre North America Rest of the world

www.thecasecentre.org t +1 781 239 5884 t +44 (0)1234 750903
case centre All rights reserved e info.usa@thecasecentre.org e info@thecasecentre.org
318-0273-1
Google-Carrefour Collaboration: A Strategic Deal for the Grocery Giant?
Author: Jyothi Javalgi
Google-Carrefour Collaboration:
A Strategic Deal for the Grocery Giant?
Abstract: Google had made its first foray into the metaphorical grocery arena by inking a
strategic deal with the French major Carrefour to sell groceries online. The French supermarket
chain was facing tough competition in the home market where rivals had unveiled a number of
ecommerce initiatives and offensives. Amazon had signed a pact with rival Casino Group to sell

groceries through its prime services and another big French grocery chain, Leclerc had

launched home delivery services in France. In a move to fend off competition from local
players and global giants like Amazon, Carrefour was embarking on a digital transformation
with Google to enhance its in-store and online experience on its home turf. As per the deal,
Google would bring in its technological expertise in artificial intelligence, cloud computing and
new consumer shopping interfaces using Google Home and Google Assistant. Carrefour, in
turn, would bring its product knowledge and expertise in sales and logistics. While the mutual
objective of this partnership was to combine the capabilities of both the companies, it
remained to be seen if the collaboration fostered novel and innovative shopping experiences.
Would the Google tie-up help in the creation of new channels to reach customers
online and synergise a long-awaited digital transformation for Carrefour? Would this online
grocery market venture pay off for the technology partner Google?
Case Study
“This alliance makes Carrefour the first partner of Google on grocery eCommerce in Europe,
creating a strong bond between the two companies. It also marks an important step in the new
story written by Carrefour since the announcement of the Carrefour 2022 plan. It allows us to
accelerate our digital evolution and get a head start in deploying the omnichannel approach we
want to offer our customers.” 1
– Alexandre Bompard, CEO, Carrefour
Shoppers today are saddled with disconnected experiences through the shopping journey,
which often lead to abandoned shopping carts and low customer satisfaction and loyalty.
Customers want assistive, simple and personalized experiences that help them make decisions
on what to buy, assist with easily building baskets across surfaces, and provide a seamless
checkout. I’m happy we’re contributing to Carrefour’s digital transformation through the
deployment Google Cloud Platform and G Suite’s collaboration tools.” 2
– Sébastien Missoffe, VP and Managing Director, Google France
1
“Google, Carrefour Partner On eCommerce”
th
https://www.pymnts.com/news/ecommerce/2018/google-carrefour-partnership/, June 12 2018
2
ibid.
“© 2018, Amity Research Centers HQ, Bangalore. All rights reserved.”
Page – 1
318-0273-1
O n June 13th 2018, French conglomerate Carrefour announced that that it had struck an
online grocery gambit with Google, becoming the first retailer in France to partner with
the tech firm. The joint venture was a major step in the turnaround efforts of Alexandre
Bompard (Bompard), who had taken over as Carrefour CEO in 2017. After the French firm
reported a net loss of more than €500 million in 2017, Bompard was determined to make 2018
a turning point ‘with e-commerce at the heart of his Plan Carrefour 2022.’ While the deal
highlighted Google’s grocery ambitions, it also was a transformational measure taken by
Carrefour to boost its online shopping business. Through the new partnership, French
shoppers would be able to shop Carrefour groceries through Google’s new shopping site, with
assistance from Google-operated connected speakers and voice devices in France from early
2019. It remained to be seen if the alliance would reinforce Carrefour’s competitive position
against its French rivals and also enable technology partner Google to gain an edge over
Amazon in the retail ecommerce space.
Google-Carrefour Collaboration: An Overview

Carrefour was a French multinational company that had steadily grown to become Europe’s
largest and the world’s second-largest retailer. The international retailer operated through
various store formats comprising hypermarkets, supermarkets, cash & carry and convenience
stores.3 The group’s offerings included local merchandise, fresh produce, consumer products
and non-food items, besides textiles, domestic goods and home appliances.4 Headquartered in
France, the grocery giant boasted of 12,300 stores in over 30 countries and regions5 under
diverse brand names including ‘Carrefour, Champion, Marché Plus, Shopi, Ed, Dia and
Promocash.’6 The retail brand was incorporated by the Fournier, Badin and Defforey families in
1959 in France. Carrefour’s first supermarket was established in Annecy, Haute-Savoie, France
in 1960 and in 1961, Carrefour’s rival company, The LLC Promodis, the forerunner of
Promodès, was formed. The merger of two merchant families run by Leonor Duval Lemonnier
and Paul Auguste Halley from Normandy had led to its creation.
Carrefour Group was the pioneer in introducing the novel concept of ‘hypermarket’ store in
1963 at Sainte-Genevieve-des-Bois, with an area of 2,500 square metres. Meanwhile, the
Promodès supermarkets adopted the banner name ‘Champion’. The 70s witnessed
the opening of Carrefour’s hypermarkets outside France, in Belgium and the first
hypermarket outside the European continent in Brazil. In 1972, Promodès hypermarkets
adopted the ‘Continent’ brand name and the convenience stores were operated under the
‘Shopi’ banner.
The Carrefour group then introduced ‘produits libres’ which were generic products that were
‘just as good and cheaper.’ Carrefour then created the ‘Ed’ chain in France while Promodès
created the Dia banner in Spain, paving the way for the development of hard discounting.
Later on, Promodès ventured into franchising with the Champion supermarket. Carrefour-
branded products were introduced in the 80s, while in the 90s, the company expanded
internationally and new stores were set up across the globe (Exhibit I). In the year 1999,
3
“About Carrefour”, http://www.gsmalta.com/about-carrefour/, 2017
4
“Company Overview of Carrefour SA”,
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=91638
5
“Key figures”, http://www.carrefour.com/content/key-figures
6
“Carrefour SA - Company Profile, Information, Business Description, History, Background Information on
Carrefour SA”, http://www.referenceforbusiness.com/history2/52/Carrefour-SA.html
Page – 2
318-0273-1
Carrefour and its competitor Promodès merged to create the largest food retailing group in
Europe and the second largest globally.7
The group had 1,528 hypermarkets, 3,273 supermarkets, 7,327 convenience stores and 172
cash and carry stores as on December 31, 2017.8 The company’s major markets were located in
Europe, Latin America and Asia, and about 57% of the Group’s revenues came from the stores
located outside France.9
Exhibit I
Carrefour’s Store Presence Across the Globe


Source: Williams Robert and Mulier Thomas, “Amazon-Whole Foods Deal Puts Spotlight on
France’s Carrefour”, https://www.bloomberg.com/news/articles/2017-06-20/amazon-s-whole-foods-
th
deal-turns-spotlight-on-france-s-carrefour, June 20 2017
In the first half of 2018, Carrefour’s recurring operating income was up by 6% at steady
exchange rates amounting to €597 million. Although the operating revenue growth rate had
masked the continuing hurdles in the home turf, Carrefour was constantly under pressurised
competitive environment. The company’s sales were essentially unchanged and the operating
income stood at €89 million after a one fifth dip in the first half of the year.10 Trailing behind its
market rivals for several years and of late in terms of e-commerce, the Group had a meagre 9%
market share in contrast to Leclerc’s 43.5% share which dominated the online grocery market.
According to Kantar Worldpanel11, poor implementation of Carrefour’s online services in the
initial years had allowed Leclerc to gain the top market position. It’s another market peer,
Auchan had 25.3% market share.
Carrefour, which had introduced the big-box supermarket concept in the 1960s, had been
expediting its efforts to integrate online and in-store shopping. Amazon’s takeover of Whole
7
“Group History”, http://www.carrefour.com/content/history
8
“Key Figures”, http://www.carrefour.com/content/key-figures
9
“About Carrefour”, op.cit.
10
Agnew Harriet, “Carrefour reports better than expected growth in first half”,
th
https://www.ft.com/content/84df890a-90f1-11e8-b639-7680cedcc421, July 26 2018
11
Spain based international company dealing in consumer knowledge and insights.
Page – 3
318-0273-1
Foods in a $13.7 billion deal in 2017 had raised the stakes for the French grocer.12
Furthermore, Amazon had made inroads into the French market in 2018 by signing a
distribution deal with Carrefour’s rival Monoprix. Monoprix was an upmarket chain owned by
the France based Casino group. As part of the deal, the French retailer sold its products
through Amazon´s Prime Now app. Commenting on the agreement, Regis Schultz, CEO of
Monoprix, opined, “The competition in France is very fierce already and so having one more
devil in the bed makes it more fun. Amazon was coming to France anyway, so you don’t put
your head in the sand, you need to be sensible and strike deals.…”13
Carrefour’s new CEO, Alexandre Bompard, (Bompard) in the wake of the Amazon deal was
ramping up efforts to improve the multinational‘s online offerings while refurbishing its ‘tired
hypermarkets.' Once considered Carrefour’s strength, the hypermarkets had of late become
the company’s Achilles’ heel. The stores struggled to compete with Amazon, nimbler
supermarket chains like Societe d’importation Leclerc SA in addition to discounters and
upmarket grocery chains like Grand Frais.14

Responding to the fiercely competitive market in France, Carrefour announced a strategic
partnership with the tech giant Google in June 2018 to create a ‘new grocery shopping
experience’ for its customers.15 Google was a technology giant built around the immensely
popular internet search engine. The company’s portfolio encompassed ‘cloud computing,
internet analytics, advertising technologies, web app, browser and operating system
development.’16 Founded in 1998 as a search engine company by two Stanford University
students, Sergey Brin and Larry Page, the tech major managed over 70% of the world’s online
search requests, making it the focal point of internet users worldwide. Headquartered in
Mountain View, California, and a subsidiary of the parent company Alphabet Inc., the tech
corporation was one of the world’s top four most successful companies along with Apple, IBM
and Microsoft.17
The Google-Carrefour collaboration signified the recent wave of retail-tech mash-ups

(Exhibit II) that had become key themes of 2018 to enhance digital expertise.18 The
announcement had come amidst a broader stir in the French grocery retail market as
businesses were investing in online platforms and home delivery services to lure customers
and fend off invasion by Amazon. Google was also rolling out new shopping services to
retailers such as Walmart, enabling them to list products on a unique shopping site or Google
Assistant on mobile phones or smart home devices. The Carrefour deal marked Google’s first
joint venture in the European region to ramp up the retailer’s digital offerings.19
12
Williams Robert and Mulier Thomas, “Amazon-Whole Foods Deal Puts Spotlight on France’s Carrefour”,
https://www.bloomberg.com/news/articles/2017-06-20/amazon-s-whole-foods-deal-turns-spotlight-on-france-
th
s-carrefour, June 20 2017
13
Floridi Cecilia, “Carrefour And Google: A Match Made In Heaven?”,
th
https://www.datalab-crm.de/carrefour-google-a-match-made-in-heaven/?lang=en, June 18 2018
14
“Amazon-Whole Foods Deal Puts Spotlight on France’s Carrefour”, op.cit.
15
“Carrefour and Google: A Match Made In Heaven?”, op.cit.
16
“Google (the company)”, https://searchcio.techtarget.com/definition/Google-The-Company,November 2011
17
Hosch L. William and Hall Mark, “Google Inc. AMERICAN COMPANY”,
https://www.britannica.com/topic/Google-Inc
18
Weinswig Deborah, “Retail Shifts Are Forcing The Grocery Old Guard Into Retail-Tech Mash-Ups”,
https://www.forbes.com/sites/deborahweinswig/2018/06/21/retail-shifts-are-forcing-the-grocery-old-guard-
st
into-retail-tech-mash-ups/, June 21 2018
19
“Carrefour takes on French rivals in e-commerce with Google tie-up”,
https://in.reuters.com/article/us-carrefour-google/carrefour-takes-on-french-rivals-in-e-commerce-with-google-
th
tie-up-idINKBN1J7254, June 11 2018
Page – 4
318-0273-1
Exhibit II
Recent Collaborations Between Grocery Chains and Tech Firms

Source: Weinswig Deborah, “Retail Shifts Are Forcing the Grocery Old Guard into Retail-Tech Mash-
Ups”, https://www.forbes.com/sites/deborahweinswig/2018/06/21/retail-shifts-are-forcing-the-
st
grocery-old-guard-into-retail-tech-mash-ups/ , June 21 2018
Will Google’s Tie-up Transform the Fortunes of Carrefour?
Carrefour entered into a strategic alliance with Google on June 11th 2018 to accelerate its
digital capabilities and to set up an omnichannel approach to reach shoppers online. As part of
the tie up, Carrefour products would be marketed on Google’s dedicated shopping website in
France and buyers would be able to shop through Google Assistant and Google Home speakers
from early 2019. Additionally, Carrefour would set up an innovation lab in Paris with Google
Cloud to work on innovative customer services by leveraging artificial intelligence. The tech
group would also train nearly thousand Carrefour engineers in the emerging digital
technologies.20
Also, according to Forbes, 160,000 Carrefour staff would work with Google’s G-Suite tools
comprising Gmail, Google Drive and Hangouts. Post the deal, customers can have the groceries
either delivered to their homes or picked from store. Signalling Google’s retail ambitions
beyond the US, the alliance implied a new strategy that could help the search giant grow its
footprint in the hostile domain against Amazon.21 Although the financial nitty-gritty of the deal
was not disclosed, the alliance was the most high-profile initiative undertaken by the retailer
till date, to boost its ecommerce presence.22
20
Agnew Harriet, “Carrefour partners with Google for digital push”,
th
https://www.ft.com/content/0ef1f7de-6d9a-11e8-92d3-6c13e5c92914, June 11 2018
21
“Google's move into French retail shows the power and potential of a new anti-Amazon playbook”,
https://www.shbusinessnews.com/googles-move-into-french-retail-shows-the-power-and-potential-of-a-new-
th
anti-amazon-playbook/, June 15 2018
22
“Carrefour partners with Google for digital push”, op.cit.
Page – 5
318-0273-1
Industry observers mulled over the grocery perspective that seemed to be the most interesting
feature of the online supermarket sector in France. The joint venture was another twist in the
digital transformation efforts of Bompard who had taken over as Carrefour’s CEO in 2017.
Following Carrefour’s net loss of over €500 million in 2017, Bompard had determined to make
2018 a ‘turning point with e-commerce at the heart of his Plan Carrefour 2022.’23
Marie Cheval, Head of Digital Transformation, Carrefour said, “This deal is a transformative
measure for Carrefour to become the leader in grocery e-commerce, which is the first pillar of
the turnaround plan announced in January. This is the first time groceries will be sold through
Google’s interfaces in France -- and the first time for fresh food in the world.”24
Commenting on the alliance, Youssef Squali, a Senior Analyst at SunTrust Robinson
Humphrey25 opined, “The Carrefour deal will strengthen Google's ecosystem on Assistant,
Connected Devices such as Home, and on its site. We believe this is a continuation of a trend
we've seen domestically where Google partners with offline retailers to bulk up their
ecommerce offerings.”26

As reported by the Food Marketing Institute27, it was estimated that by the year 2022,
customers might spend almost $100 billion dollars per year on online grocery. Subsequently, in
order to keep pace with the latest consumer trends, grocery chains would need collaborations
with tech giants to keep going. Another Industry Expert, Daniel Ekstein (Ekstein) at UBS28 said
that many traditional grocers would require assistance for ‘automatically replenishing products
in stores, shopper subscription, artificial intelligence, voice technology and digital assistants’.
“This is bringing together previously unlikely bedfellows. Google has positioned itself an ally in
the tech arms-race and so partnership seems a pragmatic, capital light solution to build skill
and scale,” added Ekstein.29
Retail Analysts regarded the Google Carrefour online grocery play as a win-win situation. With
the digital strategy, Carrefour would reinforce its competitive position against its French rivals
Monoprix and Leclerc that were ramping up their online operations and debuting home
delivery services. Google would benefit by venturing into the fast growing European online
retail market that would help in expanding the customer base of its cloud services thereby
increasing the top-line growth. Further, amidst severe challenges in the French retail sector,
the grocery deal was poised to help Google gain an edge against Amazon which had
collaborated with French retailer Monoprix to sell products through its prime services
platform. As reported by IGD30, the grocery retail market in France was supposed to grow at a
CAGR of 2.1% during the period 2017 to 2022. Further, as per the data from Statista31,
23
Lauchlan Stuart, “Never mind Amazon Fresh, here comes Google’s online grocery play”,
th
https://diginomica.com/2018/06/13/carrefour_google_groceries/, June 13 2018
24
Williams Robert “Google Enters Deal With Carrefour to Sell Food Online in France”,
https://www.bloomberg.com/news/articles/2018-06-11/google-enters-deal-with-carrefour-to-sell-food-online-
th
in-france, June 11 2018
25
A US based strategic advisory company.
26
“Google's move into French retail shows the power and potential of a new anti-Amazon playbook”, op.cit.
27
An American food marketing organisation that conducts food safety and industry relations programs for food
wholesaler and retailers.
28
UBS is a Swiss based global firm providing financial services in over 50 countries.
29
Brill Rachel,” Grocery Ecommerce on the Rise: Food Retailers and Tech Giants are Teaming Up”,
https://www.foodabletv.com/blog/grocery-ecommerce-on-the-rise-food-retailers-and-tech-giants-are-teaming-
th
up, June 14 2018
30
A research and training firm.
31
An online market research and business intelligence portal based in Germany.
Page – 6
318-0273-1
Europe’s contribution in the global online grocery sales in 2017 was 32.9%, of which 5.6% was
contributed by France. Against the backdrop of the rapidly growing retail market and the
French tie up, Google seemed to gain numerous opportunities to expand its footprint.32
While the key driver behind Carrefour’s digital transformational efforts and collaboration with
technology partner Google was to enrich the online customer experience, grocery chains also
aimed to cut costs and augment productivity. With the tech collaboration, Carrefour intended
to offer shoppers seamless ways to shop thereby increasing conversion rates and customer
loyalty. Carrefour’s investment in Google’s latest digital technology comprising AI, IOT and
cloud computing was supposed to bring in enormous benefits (Exhibit III) including operational
efficiency, cost savings and increased profit margins.33
Exhibit III
Benefits of Technology Collaborations for Retail Businesses


Source: “Retail-Tech Alliances: Why Walmart Is Collaborating with Microsoft, and Carrefour with
Google, on Retail Digitalization”, https://www.fungglobalretailtech.com/research/retail-tech-
alliances-walmart-collaborating-microsoft-carrefour-google-retail-digitalization/
Commenting on the retail tech alliance, Bernstein analysts said: “Once a retailer cracks the
logistics path for grocery ecommerce, it provides a high frequency platform from which other
categories can be approached. Grocery retail can therefore not be ignored.”
Although the Carrefour Google deal on retail digitalisation seemed to offer the desired
synergies, analysts pondered upon the downsides of the new deal. Profit margins of grocery
chains were already thin and ecommerce was supposed to eat into the profits due to the
soaring delivery costs and the investment in emerging technologies.
32
Zacks Equity Research, “Google Collaborates With Carrefour, Focuses on Retail Sector”,
https://www.zacks.com/stock/news/307460/google-collaborates-with-carrefour-focuses-on-retail-sector, June
th
12 2018
33
“Retail-Tech Alliances: Why Walmart Is Collaborating with Microsoft, and Carrefour with Google, on Retail
Digitalization”,
https://www.fungglobalretailtech.com/research/retail-tech-alliances-walmart-collaborating-microsoft-carrefour-
google-retail-digitalization/
Page – 7
318-0273-1
Global consulting firm McKinsey had estimated that the extra expense of selling items online
would be between €4 and €7 per transaction, mainly due to delivery costs. Another
international management consulting firm Oliver Wyman reported that “Bricks-and-mortar
grocers will feel a significant financial impact, as their slender margins make them sensitive to
even a small loss in market share.”
On the contrary, as per Ahold Delhaize34, investments in online operations could offer just as
high a return on investment as brick and mortal retail, as the former required a smaller
amount of investment than owning and running physical stores.
Another Industry Analyst, Tim Barrett at Euro monitor said, “It is still a category that needs a
lot of work. The cost of delivery needs to be brought down, infrastructure needs to be built,
and shopper trust needs to be established. This will take years. Retailers and suppliers cannot
wait for it to become mature and figure it out then. As with all paradigm shifts, true leaders
will have established their presence and expertise for years before the trend hits the
masses.”35

Amidst this scenario, would Carrefour’s partnership with Google for online grocery push yield
the desired synergies? Would the Google tie up accelerate a long-awaited digital
transformation for Carrefour?

34
A Dutch international retailer.
35
Thomasson Emma “Explainer: Why are grocery retailers teaming up with tech giants?”,
https://in.reuters.com/article/retail-tech/explainer-why-are-grocery-retailers-teaming-up-with-tech-giants-
th
idINKBN1J925A, June 13 2018
Page – 8

Case Study - Google Carrefour

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Case Study - Google Carrefour

Uploaded by

Copyright:

Available Formats

318-0273-1

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

CoursePack code C-2979-333872-STU

© 2018, Amity Research Centers Headquarter, Bangalore.

No part of this publication may be copied, stored, transmitted, reproduced or distributed in

Distributed by The Case Centre North America Rest of the world

Author: Jyothi Javalgi

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

Taught by Dr Jon Engström, from 17-Nov-2019 to 31-Dec-2019. Order ref F368875.

CoursePack code C-2979-333872-STU

– Sébastien Missoffe, VP and Managing Director, Google France

Google-Carrefour Collaboration: An Overview

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

CoursePack code C-2979-333872-STU

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

CoursePack code C-2979-333872-STU

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

The Google-Carrefour collaboration signified the recent wave of retail-tech mash-ups

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

Will Google’s Tie-up Transform the Fortunes of Carrefour?

Commenting on the alliance, Youssef Squali, a Senior Analyst at SunTrust Robinson

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

CoursePack code C-2979-333872-STU

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

CoursePack code C-2979-333872-STU

You might also like