Carrefour Brazil Case Study - Carrefour Brazil Deploys DemandTec Science-Based Pricing to Optimize Business Results, Engage Customers and Compete ...

Carrefour
Brazil
Case Study
Carrefour Brazil Deploys DemandTec
Science-Based Pricing to Optimize
Business Results, Engage Customers
and Compete More Effectively

About the
Carrefour Brasil
Group
With more than 360,000 employees, the Carrefour Group is present
in the lives of more than 100 million consumers in Europe, Asia and
Latin America. For more than 40 years, the Carrefour Brasil Group
has been a pioneer in Brazilian retail, with a daily presence in the
lives of millions of consumers through its extensive network of
stores and a constant drive to improve the quality of food offered at
affordable prices to thousands of consumers.

As the leading grocery retailer in Brazil, it offers food and non-food
products in more than 150 cities, in all 26 Brazilian states and in the
Federal District. Its brands, Atacadão and Carrefour, are among the
most recognized in the self-service and hypermarket wholesale
formats in Brazil. In 2018, it accounted for more than 660 points of
sale, including the Carrefour (hypermarket), Carrefour Bairro and
Carrefour Market (supermarket) and Carrefour Express (proximity
retail) formats. In the wholesale segment, it has 166 Atacadão
stores and 27 wholesale delivery stores. Carrefour Brasil also sells
online through www.carrefour.com.br and operates 74 gas stations
and 124 drugstores.

Case Study

Business
Challenge
With their focus on Carrefour Brasil’s retail business, Pricing and Commercial

Intelligence Director Alessandra Shima and Pricing and Commercial Analytics Senior

Director Arnaud Dusaintpère sought to modernize and enhance the company’s

pricing and leverage the benefits of Artificial Intelligence (AI) with a balance of

driving sales while achieving business goals. Dusaintpère elaborates:

“Historically Carrefour Brasil had a pricing follower strategy. But in
Brazil’s highly competitive market and in the midst of an economic
crisis, we wanted to seize the opportunity to be a price leader and
find the best equilibrium between volume, sales and margins.”

Shima notes that the multi-year economic crisis created pressure on sales,

“which makes pricing even more complex and challenging. We knew it was

critical to understand price elasticity in helping us to define effective pricing

strategies at the category and item level.”

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In 2017, Carrefour Brasil embarked on an ambitious
initiative to revamp pricing, focusing both on internal
improvements and identifying the price optimization
partner best suited to replace their legacy price
management tool with science-based price
optimization. Dusaintpère’s team began evaluating
alternatives, assessing the capabilities and
user-friendliness of vendor solutions while also talking
with their existing users. Internal initiatives included
product-level analytics as well as identification of
key competitors.

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Solution:
DemandTec Price
Optimization
Carrefour Brasil embarked on a pilot project which implemented DemandTec by

Acoustic over a six-month period in 10 stores across 10-15 categories. Dusaintpère’s

team anticipated growth in sales, revenues and margins, and conducted exacting

measurements to objectively gauge progress against all three goals. “The results

with DemandTec in the pilot were positive, and that was a key milestone in our

decision-making process,” he notes. “The results drove good consensus across the

organization to drive adoption and leverage DemandTec’s advanced science.

DemandTec proved to be an outstanding partner in engaging with people from the

store level to the commercial and merchant side. They brought us a compelling

combination of deep knowledge of the tool’s AI capabilities, years of retail experience

that met each different team member’s needs, and the right expertise that we

needed at different phases in our journey.”

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Business
Impact
With DemandTec Price Optimization, Carrefour Brasil set out to achieve more
automation and efficiency in its rules-based price management with more transparency
and usability while also exploring price optimization capabilities. He notes,

“We wanted something extremely transparent to make sure that whatever
the recommendation that the tool produced based on the optimization
module, we would be able to explain to anyone within the organization,
regardless of format, the rationale for the recommendation. Trust is the
key to successfully adopting price optimization, especially in a centralized
organization like ours, and DemandTec delivered that transparency.”

Impact analysis was performed at the category level. The aggregated analysis
demonstrated measurable gains in margins and profits while maintaining unit sales
and revenues.

Shima and her team plan to broaden use across every product in all the Carrefour
formats and stores, while driving improved shopper price perception in the process.
“I want to thank the entire team at DemandTec by Acoustic for their positive energy
in helping us deliver business success with our price optimization,” she says.

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“We chose DemandTec for the science,”
Shima emphasizes. “It enables us to predict the business

impact of recommended prices. Our price analysts quickly

turned the tool and today can very comfortably explain why

the system makes the recommendations it generates. Today

our pricing team serves a much more strategic role as price

advisors to our colleagues, with insights on elasticity and

beyond that give the commercial team confidence that they

are offering the best prices.”

                                                              Case Study

About

DemandTec by Acoustic is committed to
taking AI pricing to new heights. With deep
and commanding worldwide retail pricing
domain knowledge and experience,
DemandTec enables retailers and CPG
partners to deliver optimal pricing,
promotions, and markdowns to thrive in
today’s hyper-competitive retail landscape.
DemandTec addresses retail pricing
challenges today and into the future with
relentless focus, commitment and ongoing
investment. For more information, visit
www.acoustic.com/demandtec