Consolidate our leadership and nationwide footprint through the geographic expansion of physical stores
At the end of 2018, we operated nearly 660 points-of-sale, practically double the number generated by physical stores 10 years ago. We plan to further consolidate our leading position in the Brazilian food retail industry through our organic expansion strategy that privileges high-return formats and potential growth, particularly the Atacadão format and the proximity stores. In addition, we have been continuously assessing opportunities to acquire local or regional competitors who could help us reinforce our presence in certain regions, format and/or models in Brazil. The M&A strategy is not confined to the physical world; it may also involve small digital acquisitions if the asset in question fits into our ecosystem as Cybercook, an online recipe website that we acquired at the end of 2018, did.
Develop our ecosystem
Our multiformat and omnichannel structures are essential to Grupo Carrefour Brasil’s current business strategy; and in 2019, we implemented these structures into the Carrefour ecosystem. We aim to fully integrate our physical store chain and e-commerce platform, bolstered by our financial solutions segment. This dynamic and interconnected system adds value to our customers while generating opportunities to serve and connect with them in new ways and earn their loyalty. Within this context, investments in digital technologies and omnichannel services were the highlights. At the end of 2018, GMV share in total sales of Carrefour Retail reached 9%, ex-petrol.
At the end of 2018, the Click & Collect (C&R) was available across all hypermarkets. We will also advance the Click & Collect format in 2019 by adding outsourced sites as pick-up points and integrating them with other formats, such as Market and Express. At the end of 2018, the number of Drives reached 10 units, with other units planned for 2019. Drive units already account for 28% of our food e-commerce sales. Our goals are to become Brazil’s leading food and non-food e-commerce retailer and to be ranked among Brazil’s Top 5 in such category. In 2019, the website www.carrefour.com.br has already distinguished itself amongst Brazil’s top 10 Internet shopping sites (according to E-bit data), a relevant evolution since its launch in 2016.
Since the launch of our CRM program in October 2017, the percentage of customers identified in our stores has climbed significantly, reaching approximately 70% in December 2018. At the end of 2018, our customer base had reached 13.4 million, marking substantial growth since the program was implemented. In addition, our app, Meu Carrefour, has been downloaded nearly 2 million times.
To advance our digital transformation, we created a new business unit in 2019, Carrefour eBusiness Brasil (CeBB). CeBB will centralize all digital actions that previously took place across various departments inside the Company. In addition to CeBB, the Company made strides in e-commerce by widening its selection of delivery options, product pick-up options, and digital payment options. In early 2019, we entered into a partnership with Rappi to expedite the delivery of e-commerce food orders. In 2018, the channels offered to retail and e-commerce customers were consolidated into a single call center, One Carrefour. And in 2019, services were reinforced through our virtual assistant, Carina, during calls into the call center, social media engagement, and WhatsApp chats.
Develop a streamlined and open organizational structure to deliver excellence in customer service
Continually seeking to perfect our operations and the execution of our operations is central to our strategy. It differentiates us from our competitors, strengthens repeat-purchasing patterns, and generates productivity gains in our stores—all of which results in improved operational margins. We continue to work on initiatives designed to improve efficiency and productivity across all our business segments and formats. These initiatives include the implementation of (1) new store organization processes aimed at generating meaningful productivity and quality of service gains, including optimization of the shelf replenishment process, among others; (2) tools designed to rigidly control freight expenses and general expenses; and (3) improvements to our supply chain and distribution model, aimed at increasing product availability on shelves and reducing inventory levels. We remain committed to increasing our capacity and improving our product availability and customer service—all to ensure optimal productivity. Our ecosystem is data-rich, and we are currently maximizing data collection from our customers and operations to develop technology that will assist us in implementing new CRM initiatives that enhance the customer shopping experience by improving offer-customization, thereby increasing revenues.
Continuously reinforce our performance-based culture that encourages teamwork and contributes to talent attraction, retention, and development
Our culture is based on results achieved by setting well-defined goals. We also work to inspire our employees to embrace an innovative, passion-driven, collaborative work ethic that places a high value on customer satisfaction in order to make us Brazil’s favorite retailer. We believe that we foster a diverse, meritocratic corporate culture that attracts talent, supports integration, encourages teamwork, and promotes a sense of personal responsibility and pride at work. With this approach, we continue to develop our team of talented, highly qualified professionals and move it towards securing a leading position in the Brazilian food retail industry.
Aiming to lead food transition to ensure that all customers have access to quality food at fair prices.
In October 2018, we adopted Carrefour Group’s global strategy, Act for Food, in view of becoming a global leader in food transition. In this regard, we seek to broaden our healthy, high-quality product offerings while maintaining affordable pricing. We pursue the democratization of access to fresh products, aiming to increase the percentage of local products available at stores and increase from current 13% to 20% the percentage of food private label products, enhancing our efforts to fight food waste, improving package sustainability, and ensuring food safety.
The Act for Food also aims to stimulate change at every stage of the chain, from partnerships with suppliers and other public and private agents to consumption habits and food production. An example of these efforts is the stimulus to long-term procurement with local producers, which allows these volumes to sustain partners’ investment to change their agricultural production practices. Acknowledging the strategic role played in the market, the Company has been taking advantage of its well-distributed stores, brand strength, and retail expertise to ramp up sales. Another innovative initiative the Company launched in Brazil was the “Satisfaction Guaranteed Commitment.” If a customer is dissatisfied with the freshness of any item purchased at one of our chain stores, said customer will either receive a refund or a replacement product of equal value.
In addition, we are promoting several other initiatives to improve our business sustainability, namely (i) joining the Food Traceability and Monitoring Program (RAMA), which was developed by the Brazilian Association of Supermarkets (ABRAS). RAMA ensures that fruits and vegetables are treated with agrochemicals according only to the highest standards. Carrefour has the highest index of analyses among all Brazilian food retailers. We are committed to (i) adhering to proper protocol for the use of agrochemicals; (ii) keeping our laying hens cage-free so that all eggs sold after 2028 derive from a humane, cage-free system; (iii) fomenting sustainable breeding practices in Mato Grosso through the launch of our joint initiative with IDH, The Sustainable Production of Calves Initiative ; (iv) ensuring a more sustainable fishery model by mapping the seafood supply chain in partnership with the Seafood Watch Program, and (v) supporting Gastromotiva to help integrate sustainability, social-inclusiveness, and health into our food culture.