HOW IS CARREFOUR PERSONALIZING ITS DIGITAL FLYERS? CARREFOUR X ARISTID / LSA REPORT

To offer each customer tailored deals, Carrefour has created a personalized e-catalog. Here’s the breakdown.

“We want to say yes to all our customers,” emphasizes Frédéric Preslot, Carrefour’s Operational Marketing Director.

This means saying yes to those who no longer want flyers in their mailboxes and don’t seek promotions. Yes to those who still want deals but are looking for paperless solutions. And yes to those who still need paper, even if it means sending them the catalog by mail. “We won’t leave anyone behind”. Our approach to gradually reducing mailbox flyers, which began over 18 months ago, wasn’t eliminating paper but about reducing waste. Our objective are clear: to reduce the number of paper catalogs by 40% in 2023 and by 80% by 2024!”

Given that Carrefour currently distributes around 20 million catalogs each week in France, how will they achieve this?

“The foundation of all our communication strategies is based on an equation (number of people exposed X % perception X % relevance X % persuasive intensity) to measure the effectiveness of promotional communication. It’s the number of people exposed to the flyer multiplied by those who perceive it, multiplied by those who find it relevant, multiplied by the persuasive intensity,” explains Frédéric Preslot. He adds, “To maximize the effectiveness of our commercial communications, we need to expose as many people as possible, ensure they perceive the message, find the offer relevant, and make it compelling enough to be attractive. In summary, if any factor in this equation drops to zero, the effectiveness of the entire chain falls to zero.”

Naturally, paper catalogs have the advantage early in this equation, as everyone checks their mailbox. When Carrefour began digitizing its communications, they acknowledged that the number of people exposed digitally was lower than those who own a mailbox. Moreover, Carrefour doesn’t have the email addresses of all its customers (and even fewer of its prospects), and email open rates are relatively low—about 30%, with click rates around 3%.

“We decided to focus on the other elements of this equation. And digital has undeniable strengths in the ‘relevance’ category,” notes Frédéric Preslot.

Carrefour worked with ARISTID, a French company helping retailers with digital transformation in their commercial communications. ARISTID’s digital platform manages all promotional data and customer information from Carrefour’s loyalty program.

“We already had a recommendation engine for our promotions, which we communicated through emails. But we decided to rework the catalog based on customer preferences,” says Frédéric Preslot.

The idea is simple: highlight the eight most frequently purchased products by each customer on the first pages of the catalog. To ensure a quality customer experience, if the recommendation engine can’t find at least four personalized products in the catalog, no personalization is applied. Today, nearly 1.1 million customers receive personalized emails each week. When the catalog is personalized, the click rate doubles, reaching 6%.

“With the technological framework in place, Carrefour can cross-reference its rich customer data with its offer data lake to generate a nearly infinite number of fully personalized offers on an industrial scale,” says Rodolphe Bonnasse, CEO of ARISTID Retail Technology.

Carrefour has also worked to eliminate various reading challenges in its digital reader. They added a table of contents, a search engine, sorting options, favorites lists, a shopping cart, and smoother navigation and zoom functionality. Even though the personalized catalog is still based on the traditional 60 to 80-page format, most users only browse about 24 pages.

“In a traditional catalog, the power lies in the front and back covers. But in a digital catalog, the back cover holds no value,” warns Rodolphe Bonnasse, raising concerns about non-food items typically found at the end of the catalog.

The movement is well underway, with the first personalized catalog sent in September 2022. Over 180 stores have already stopped distributing paper flyers, particularly in Paris and Lyon, with many more joining since early January. How is this being received in-store? The key measure remains the market share at each location.

“Stores that have stopped using flyers haven’t lost market share. Non-food items require particular attention, as they are more sensitive to the lack of exposure in paper catalogs,” notes Frédéric Preslot. But is there a risk of overloading customers’ email inboxes or causing fatigue? “That’s part of the discussion. But we also have our App and WhatsApp, where we developed a weekly push catalog. We are entering a new era and will continue learning as we go. For now, the vast majority of our customers still prioritize receiving communications via email,” says Frédéric Preslot.

And what about the environmental impact? “We moved beyond that debate by focusing on the primary objective of reducing waste and preventing 47% of catalogs from being thrown away without being read.” Naturally, there are cost savings as well. For a hypermarket, the cost of flyers typically ranges from €300,000 to €500,000 per year.

“Our goal is to reinvest half of those savings: for every €100 spent on paper, at least €50 will be invested in digital. Another portion will be used to offset the high inflation of the remaining paper costs,” explains Frédéric Preslot.

Paper will not disappear entirely. It can still be found at checkout for customers who prefer to use a physical catalog to prepare their shopping. Two specific types of catalogs remain under discussion: toys and wine fairs. In September 2022, catalogs were inserted into postal invitations for wine fair events. For toys, Carrefour plans to distribute them at checkout while notifying customers via email that the catalog has arrived.

One lingering issue is commercial cooperation. For suppliers, featuring products in flyers has never been free; it represents a significant source of revenue for retailers. “The key point is the volume of promotions. And Rami Baitiéh [CEO of Carrefour] has been very clear: we aim to reduce paper flyers by 40% in 2023 without cutting our promotional sales. We are known for our promotions, and that will not change,” reassures Frédéric Preslot. Logically, the transition to digital flyers will be entirely seamless for suppliers, with no impact on promotional commitments or visibility.

Looking ahead, there is potential to go even further with personalization. This would mean more targeted product units (SKUs), but also tailored promotions.

“We’re only at the beginning of catalog personalization. But this can only be achieved with an industrial model,” emphasizes Rodolphe Bonnasse.

Imagine offers or promotions linked to personal events (birthdays, etc.). “The possibilities are exciting when you consider 1,200 stores, 1.1 million customers, 500 SKUs in a hypermarket catalog, and 8 personalized SKUs per customer,” adds Frédéric Preslot. In the future, there could even be the possibility of including local offers exclusive to certain stores.

Of course, such possibilities are sparking interest. “Some digital giants estimate the paper ecosystem (printing, transport, distribution, etc.) at €1.5 billion per year. They’ve calculated that by 2023, about €200 million will move to the digital ecosystem,” explains Rodolphe Bonnasse.

Is there a risk of dependence on Google or Meta?

“It’s possible. That’s why we’re focused on maintaining independence by acting as a firewall between digital platforms and the media ecosystem,” insists the president of Aristid Retail Technology

Retailers’ customer data is more valuable than the algorithms used by major tech companies. To gain a tenth of the insights that retailers have on their customers, these digital giants would need to invest billions of euros. Moreover, in a few months, they will no longer be able to use third-party cookies. More than ever, retail data and expertise will be of immense value. “We are the gatekeepers of this promotional data,” he adds. Ultimately, everyone is striving for the holy grail of local business: the ability to push localized store promotions on YouTube to nearby customers. This is a dream shared by the entire digital world. So, the battle is just beginning.

By Rodolphe Bonnasse, President of ARISTID Retail Technology

1. Ensure your promotional data is robust. Otherwise, for every exposure (app, web, mailing, flyers, stores…), you’ll be forced to spend time and money keeping it up to date.
2. Have accessible data in one location. If data is co-constructed from different business units, it quickly becomes a nightmare to manage and maintain.
3. Make sure your support material creation process (PDF, JPEG, video files, etc.) is based on an industrial system of automated generation.
4. Have a solid customer database with an appropriate recommendation engine. Basically, a strong CRM system.
5. Ensure your techology is open and compatible with the digital ecosystem to avoid the need to customize formats for each platform.