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Clear Thinking Case Study of the Month


The Story

September 2010

"Business---Customer Thinking. Carrefour's new store design"

Carrefour shares rose 5% after analysts visited two trial stores in Lyon, France, to see an innovative new store format - the Carrefour Planet. The world's second biggest retailer and the original inventors of the Hypermarket, has launched a new store design that analysts believe will vastly improve the customers’ shopping experience – profitably.

The Key Points of the Story

Carrefour’s European hypermarkets have underperformed for the last 10 years, but new CEO Lars Olofsson (since Jan 2009) has begun an ambitious turnaround strategy. Cost-cutting has lowered prices and increased market share in France. Now Mr Olofsson is ready to boost growth (sales, profits, and margins) through design of new stores and remodelling most of the existing premises to be more customer-focused. The extra costs will be met by improvements to operating practices such as centralised buying and brand management.

Designed to improve the Customer Experience

The new shops are less of a warehouse and more like a department store – differentiated stores within a store, each with its own ambience and activities. Suspended spot lighting, wide aisles, and colour-coded signage will improve shopper navigation. It is much lighter, more roomy, more attractive, with more staff assistance. Fresh food is arranged like a market.

You can even get a haircut for €10 

A “beauty bubble” offers make-up advice, manicures, and an inexpensive haircut. A nursery can look after your children while you shop. Some Planets will have a large multi-media section with a dedicated Apple area.

 

Analysis and Lessons

Profitable Customer Focus … Design-Thinking … Learning from Europe
Example of Profitable Customer Focus

Carrefour, and analysts, believe this new design will significantly boost operating profits for the group - from €3.1bn this year to €6.4bn in 2015. We can understand their enthusiasm. We are always impressed by European supermarkets compared to their British counterparts. The design is so much more appealing. And this is before the Planets. We can very easily imagine that customers will find the Planet experience so attractive that they will be happy to spend time, and money, simply doing their shopping. Classic Business---Customer Thinking. Profitable Customer Focus.

Design Thinking:

... what does it mean?

Design is about form and function. Appeal and use. What something looks like can have a major impact on appeal. We are highly attracted to French cheese shops, charcuteries, and patisseries. If Carrefour can reproduce these in the Planets they are definitely on to a winner.

 We have given customer focus consultancy advice to an independent supermarket along these lines and, together with a local marketing campaign, the client boosted sales by 15% soon after. This approach works.


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