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

“DemandTec proved to be an outstanding partner… 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.”

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.

In 2017, Carrefour Brasil embarked on an ambitious initiative to revamp pricing, focusing both on internal improvements and on 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.

“We knew it was critical to understand price elasticity in helping us to define effective pricing strategies at the category and item level.”

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.”

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.”

“We chose DemandTec for the science”

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.”

“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.”

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.

About DemandTec by Acoustic

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.