The Italian division of France-based global retail giant Carrefour is analyzing store customer behavior at a granular level.
Chain Store Age recently spoke with Flora Leoni, chief data officer and CRM and services director, Carrefour Italy, about how the hypermarket and supermarket retailer is leveraging artificial intelligence (AI)-based technology from consumer analytics firm Dialogica to better understand how and why customers select and purchase products in its stores.
Why did Carrefour Italy decide to focus on the store experience?
Carrefour Italy launched a project to better understand our in-store shoppers. We wanted to look deeper into the demographic characteristics and purchasing behavior of our customers.
A satisfied consumer is the real value generator and competitive advantage for a retailer. An excellent shopper experience creates the condition necessary to build loyalty and to differentiate yourself from lower-priced and less satisfying competitors.
Why did Carrefour Italy select Dialogica?
We selected Dialogica because we felt its technology’s method of analyzing consumer behavior was highly innovative and the most effective means of mapping the shopping journey and the socio-demographic characteristics of customers. Carrefour Italy’s goal is to capture purchasing behavior in a natural, non-invasive way.
The Dialogica solution measures the shopping journey from the moment a customer enters a store until they make a purchase. Computer vision systems which are compliant with Italian privacy laws measure customer traffic at store entrances and in the aisles; as well as the number of shoppers showing interest in specific products, products customers pick up with their hands and items that are ultimately purchased.
This information is then associated with store-level sales and loyalty card data. Carrefour leverages the technology to diagnose customer behavior and understand their likes and dislikes, to help us make changes to improve the in-store shopping experience.
Can you provide details of how Carrefour Italy deployed the Dialogica solution?
Carrefour Italy analyzed many products across categories such as food and beverage, including wine and liquor, as well as personal and household care. We also analyzed the performance of secondary display off-the-counter positions, such as gondola heads and promotional islands, to fully understand everything contributing to overall sales in these categories.
In addition, Carrefour Italy tested new products in similar categories to understand the best locations and forms of in-store communication we should use to promote them on the shelf and at checkout.
How many customers have you tracked, and what have the results been?
The analysis measured the behavior of 12,950,000 shoppers entering stores and 2,325,000 shoppers standing in front of specific product displays. We were able to measure the movements of shoppers in different areas of the store.
For example, about 40% of customers visit the in-store café and more than 50% stop by the fresh cut counters. We created modern shopper profiles, learning that the ‘family shopper’ is an outdated concept. Today, the number of male shoppers equals the number of female shoppers, although they prefer different products.
We discovered that many products in our assortment attract shoppers, but just as many do not appeal to them. These are items that customers may take off the shelf and handle, but ultimately put back.
This demonstrates the need to better understand product placement on the shelf, as well as understand planograms and assortments according to the real needs of consumers. The ideal assortment is one that maximizes sell-through, since that means it really satisfies shoppers.
In practice, the higher the closing rate, or the percentage of products that enter the shopping cart after being handled by a customer, is, the more effective the assortment.
What else have you learned?
In-store communication is a fundamental tool to guide consumers to make purchases. Good communication at the point of sale is the last stimulus for customers to make purchases. Poor communication is the first deterrent to a sale.
There is still much to study, understand, and invent to better sell products and satisfy customers. The analysis we have carried out on categories, products, in-store positioning, and communication have allowed us to highlight the true ‘moment of truth’ when a shopper becomes a buyer, progressing from interest to purchase.
On average, a purchase takes place in four seconds. All the marketing activity and investments of retailers and brands are concentrated in this short period of time.
Carrefour analyzed results from these four seconds and shared them with our suppliers in order to improve customer interaction with products. Significant results have also been achieved in improving the effectiveness of communication and visual merchandising.
For example, a new promotion at the fresh cutting counter has increased customer interest levels by 13%, the number of shoppers interested by 9.6 %, and the sell-through rate by 40%.
[Read more: Carrefour opens customer base to personalized marketing]