Interested in commerce? Hear from Zappos CMO Tyler Williams and other executives at Adweek Ignite: eCommerce July 10-12 in Seattle—apply here to attend.
Last month French retailer Carrefour announced that over 250 of its 16,000 supermarkets were at risk of closure, sending shock waves across trade unions. Executives pointed to these locations’ glaring lack of attractiveness, recognizing that the giant retailer’s hypermarket model, which rests on vast stores sitting at the edge of cities, was losing steam.
But in a surprise turn of events, this decision coincided with the inauguration of the company’s first connected store, located on Shanghai’s bustling Tianshan Road. Carrefour “Le Marché,” as it’s called, is a pioneering shake-up in all sorts of ways, offering a wide selection of high-end products, a high-tech, lounge-like atmosphere for greeting customers and a host of digital tools.
The smart life store is the culmination of a long-coveted partnership with Tencent, which was sealed earlier this year. The Chinese internet company is experimenting with its new facial recognition payment method throughout Carrefour and hopes that it will eventually fully replace Tencent’s WeChat mobile payment system. “Le Marché” is the company’s flagship smart retail store for the new WeChat facial recognition payment, according to Tencent officials.
“Bolstered by its partnership with Tencent, Carrefour has adopted a spate of digital innovations to introduce smart retail to its customers,” according to a Carrefour spokesperson. “Face recognition payment and ‘scan and go’ have been seamlessly adopted for users registered via WeChat. When you purchase and pay in this store, you don’t have to take out your wallet or mobile, but just smile to the camera and the payment is done.”
This development is part of a wider movement of French companies building close ties with Chinese tech firms to meet the demands of a younger, connected clientele. Facing entry barriers including local market trends, cultural norms, and complex policies and regulation, French firms seeking to make inroads in China are fond of joint ventures and partnerships. Wary of these concerns, the French embassy, through its R&D Club, guides them in their journey, promoting their expertise to Chinese tech firms, and setting up conferences, summits, and private meetings to foster long-term cooperation.
For the past two years, Tencent’s longtime rival the Alibaba Group has been introducing similar ultra-connected concept stores all over China through its retail brand Hema, putting a strain on Carrefour’s traditional supermarkets and making them seem outmoded. Hema will be adding 30 stores in Beijing alone throughout 2018.
Back in France, on June 11 Carrefour announced a partnership with Google to sell its products using three different channels: Google Home, Google Assistant and its e-commerce platform Google Shopping. The partnership also comprises a deal with YouTube to feature links to Carrefour’s e-commerce platform on direct ads.
This unprecedented partnership in Europe will enable Carrefour to reach a younger crowd, according to Marie Cheval, who heads the company’s digital transformation. Carrefour wants to rake in $5 billion in food e-commerce sales by 2022.
“The company has embarked on a digital revolution which is mainly structured around e-commerce. Google is a leader in its field and wants to get more involved in food distribution,” Carrefour’s spokesperson told Adweek. “Our collaboration is mutually beneficial. Google and Carrefour are building synergies. No one is subcontracting the other. We are reinforcing our respective long-term visions.”
This partnership also looks timely. Carrefour is trailing its rival Monoprix when it comes to food distribution in the digital age. Last March, Monoprix became the first French retail chain to conclude a partnership with a global web giant when it announced it would embed a dedicated e-commerce platform directly on Amazon, exclusively servicing Amazon Prime customers. Contrary to Carrefour’s alliance with Google, however, the deal met stiff opposition in the retail industry amid Amazon’s ongoing forays into the agri-food sector.
Through its agreements with Tencent and Google, Carrefour is making headway in ushering in a digital era for the company. On a national level, however, these partnerships with foreign giants are a sober reminder of France’s struggle with technological independence.