1.1 Casino Group, France

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1 Case Study 1.1 Casino Group, France Abstract The Casino Group is one of France s leading food retailers. Founded in 1898, the firm sells it products through various channels including different types of stores such as Hypermarkets and discount shops. In 2006, the Casino Group implemented a Customer Relationship Management (CRM) at its hypermarket branch. With this solution, the firm aims to improve relationships with the professional groups customers which include public institutions, large enterprises and associations. Giving sales people access to a centralised database significantly improved sales operations at the Casino Group. The solution furthermore has a positive effect on marketing strategies and activities. Overall, the solution has resulted in efficiency gains for the sales force and the marketing department; productivity gains for the till employees; and improvement of logistics, quality, hygiene, security and environment management within the Group. Case study fact sheet Full name of the company: Casino group Location (headquarters / main branches): Sainte Etienne, France No. of employees: Sector: Retail Main business activity: Food and non food retailer Primary customers: Consumers Year of foundation: 1898 Turnover in last financial year ( ): M 22,505 Most significant market area: France, North America, Asia, Indian Ocean Main e-business applications studied: * Customer Relationship Management

2 1.1.1 Background and objectives The Casino Group is strongly driven by its home market with 75% of its net sales originating from sales in France in Before expanding into the international market, the Group strongly consolidated its French home market position. These firm roots are the source of the Casino Group s ambitious and sustainable international expansion which started in the late nineties. Internationally there are two priority markets: South America and South East Asia. Across these markets, a diversified sales channel portfolio including hypermarkets, supermarkets, convenience stores and discount stores ensures that the Casino Group reaches a wide array of consumers. Strategically, the Casino Group seeks to differentiate its offer from competitors with a focus on the customer. To accentuate this differentiation in a competitive marketplace assertive marketing initiatives have been designed to make every aspect of the business customer-centric. Profoundly affected by this strategy is the Hypermarket branch, which includes 108 stores in France having a market share of 3.7% and representing 36% of Casino Group s revenues ( 6,294 million in 2006). Marketing activities within this group are based on the sustained development of the Casino brand, the introduction of new food and non-food concepts and an ambitious customer loyalty program. An important driver of both, revenue growth and margin improvement is this customer loyalty program: purchases paid for with the Casino card continued to rise during 2006, reaching 60% of total revenue at year-end; number of active cardholders also increased by 10%. This has a significant impact on revenue growth since the average value of a cardholder s basket is higher than that of customers not participating in the loyalty program. The CRM project, called E-DEAL, is part of the differentiation and customer focus strategy. The hypermarket branches serve the professional groups segment which was created in This segment includes target customers like large companies, schools, and restaurants. It represents approximately 2% of the income of each hypermarket. To address this segment, one sales person is assigned to follow up and secure loyal customers (in collaboration with the marketing department) in each hypermarket of the Casino Group. Prior to the implementation of the CRM tool, sales operations targeting the professional groups segment were not computerised and sales people mainly used fax and paper to manage their customer appointments and to capture sales data. There was no centralised information system to manage this data. In order to improve data management and increase profitability of sales operations, the Marketing department of the hypermarket branches decided to adopt a CRM solution that would: automate and simplify operational sales processes simplify in-store operational processes (mainly at the cash desks) and enable the analysis of consumer habits with the aim to better address the professionals group market segment e-business activities e-deal is the first CRM solution implemented at the Casino Group. The project was launched at the end of 2005 and initiated and sponsored 1 by the marketing director of the 1 The project sponsor denotes the person in a company committing political capital as well as resources for a project.

3 hypermarket branch. Following a detailed definition of project specifications, the Casino Group launched a tender process to find and select a suitable solution provider. The main requirements for the solution were to: give marketing and sales personnel a centralised tool to follow up on activities within the professionals group segment provide a unique customer database to sales personnel, enabling them to target, follow up and secure loyal customers comply with budget specifications (small budget) provide an ergonomic, simple-to-use tool for users and offer a web based tool which is easy to integrate into the existing information systems infrastructure. Following the selection of the solution providers (E-deal for the software and Unilog for the integration of the solution) a development phase lasting approximately 7 months allowed the hypermarket branches of Casino to adapt the software to its specific needs and to engage in various test runs. Before the overall deployment of the solution, a twomonth pilot was done in three hypermarkets in France. These markets were selected due to their diverse profiles which allowed for testing the solution in different environments. Following the pilot phase, the solution was deployed progressively: by the end of 2006 it was installed at 20 stores with another 40 stores added in The target is to equip all of the 108 stores by the end of The project team consisted of two people from the Casino Computer Innovation department, one Marketing project manager from the Casino hypermarket branches and several consultants from the subcontractor company, working on the development and integration of the solution. From the very beginning, end-users were involved in the project: three sales representatives with different technical and professional backgrounds participated in the development, testing and roll-out phases. Their views affected the choice of tool, interfaces and functionalities; and they actively participated in training the sales team in charge of the professionals group segment. The initial training lasted one day and is complemented by on-demand half-day refresh training sessions. The solution deployed, developed with java language, is fully web-based, running on a tom cat server. Each sales representative has a user login and password and can access the tool via the Intranet. Together with the CRM tool, the Casino hypermarket branch deployed a new customer loyalty card for the professionals group segment. The objective is to equip all customers of the target segment with this card in order to being able to analyse their consumer habits and perform targeted marketing activities. About professional customers are using the card today. With the CRM solution, the sales process is as follows: Sales representatives log into e-deal to see their calendars including customer meetings scheduled by an external telemarketing company according to the availability given beforehand. The representatives access information(held on the database) about customers with whom they have meetings scheduled in order to prepare these meetings. All customer information and updates are stored in a central database, including

4 more than contacts. This information can be accessed by the whole professionals group segment sales force of all hypermarkets and by the marketing department. Before the solution was implemented, the telemarketing company sent customer meeting proposals to the sales representatives who, as a first step, confirmed availability and sent, as a second step, a final meeting acceptance or cancellation to the telemarketing company. All information exchanges were done by fax. This process was significantly simplified owing to the new CRM system. The purchasing process of the professionals group customer has been eased as well: the loyalty card enables professionals group customers to shop alongside other consumers in stores while information about the card holders is being collected and registered during check-out. Final year discounts are allocated to the respective cards and managed automatically with data about all purchases being sent to the e-deal system. Before the deployment of the solution, professionals group customers had to identify themselves at the reception of the store and get a specific paper that needed to be shown at the cash desk. The cash desk employee then had to create a manual bill for the customer which was a very time consuming activity. With the purchasing process for the professionals group customers now being automated, accounting processes have also changed: prior to the introduction of the new system, the Marketing department received sales figures from individual sales representatives on Excel sheets at the end of each month and data was manually keyed into the central accounting system. There was no guarantee that figures were correct at the time. With the e-deal solution, sales data is automatically transmitted from the tills to the marketing department on a daily basis. The whole process is therefore now efficiently organised and automated. Future developments of the solution, such as the upgrade of the software version as well as the synchronisation of the Outlook calendar with the e-deal calendar are planned for Thanks to the success of the project for the professionals group segment, the deployment of CRM tools across other Casino sales departments is envisaged Impact The management of the hypermarket branch is very satisfied with the first results achieved following implementation of the solution. Users have adopted the tool to suit their sales process and feedback is very positive especially since the tool is simplifying daily working processes. The impacts of the solution can be summarised in efficiency gains for the sales force and the marketing department, productivity gains for the till employees and in improvement of logistics, quality, hygiene, security and environment management. Hypermarket sales representatives in charge of the professionals group segment All customer information is consolidated in a centralised database that sales representatives can access contacts have already been entered into the database which is used by sales representatives to get to know customers and target marketing actions to the specific profile of a customer. The sales process is eased owing to a reduction of manual processes for scheduling

5 customer meetings. These meetings are organised to follow-up on existing customers and to investigate new customers. The meetings are directly managed via an online calendar shared between the telemarketing company taking the appointments and the sales representatives. Sales representatives are able to better match preferences and needs of the customers thanks to detailed data available on their purchase habits. Representatives can now negotiate prices, propose specific promotions to customers to reduce stocks or organise specific events for targeted customers. This will probably have a positive impact on the relationships with the customer. Regarding the management of their own activities, sales representatives now have clear visibility on their daily turnover and their position amongst the national sales force. This allows them to better manage their sales activity and to exactly know if they are in line with their sales objective. Hypermarket branches marketing department Activities of the entire professionals group can now be controlled from an accountancy and marketing point of view. Sales data of the income generated by the professionals group of each hypermarket is automatically gathered from the tills and represents reliable information for accountancy. Marketing personnel can now monitor activities on a daily basis while they got the information only once a month before the new system was implemented. With this new information now available, the marketing department is able to launch targeted direct marketing campaigns by segmenting the professionals group market. Detailed statistical sales analyses have made it possible to identify the top ten customers or the top ten products sold. The tool enables marketing personnel to analyse customer behaviour through detailed purchase data provided by the system. Marketing efforts can be optimised by putting efforts on specific customers; examples include securing the loyalty of regular customers or organising awareness and promotional campaigns for customers that did not use their card for a certain amount of time with specific promotional actions. Before the new system was deployed, marketing actions like specific promotional offerings were sent to a very large amount of people and these actions remained fruitless since they were not adapted to the target public. Hypermarket logistics Operations in the hypermarkets to manage the professional groups segment have been completely automated thanks to the introduction of the loyalty card and the CRM system. This automation saves time for accountants and for customers and led to productivity gains at the tills. Another benefit results from the integration of e-deal with SAP allowing a better control of the customer payments. Before the implementation of the solution there was no control possible of non-paid bills of the customers who have certain payment facilities. Now a detailed view of the status of customer payments is provided though the solution. Hypermarket quality, hygienic, security and environment management In case of product retirement (for example, removing contaminated products) the Casino hypermarket branches now can exactly identify the customers who have bought the product to be retired and be able to quickly inform the customer.

6 Due to the recent implementation of the system and the absence of any figures before the CRM solution implementation the quantitative benefits are difficult to measure at this stage. The Casino Group however now has a tool in place that gives a situational overview allowing it to rapidly react to emerging quality, hygienic, security and environmental challenges. CRM tool usage The Casino hypermarket branches today count about contacts in their central customer database and that customer meetings could already been realised in 20 months allowing the representatives to attract more customers customer loyalty cards have been deployed until today which is considered to be a great result. Customer satisfaction has also increased due to the simplified shopping process for loyalty cards owners Lessons learned This case study illustrates the successful implementation of a CRM solution with a rapid return on investment in terms of benefits achieved. It is important to highlight that such a solution is not only suitable for large enterprise but also for small businesses due the simplicity of the solution and the small budget required to put it in place: the solution is not a complex system and can easily be adapted to the specific needs of a company. The company then just needs to pay licence fees on a yearly basis and can outsource the maintenance of the system to an external company. This makes such a solution particularly suitable for small firms that do not have an internal IT department. Several factors have contributed to the success of this project. First of all a company should carefully analyse its functional needs and distinguish the different functionalities it wants to deploy. In order to facilitate the adoption, the deployment should be done functionality by functionality starting with the most basic one recommends Stephane Bayle, the CRM project director. The Casino Group started with the deployment of a centralised customer database which was the most important functional requirement. Another important point was the integration of a representative panel of users in the project from its very beginning. Thanks to their active participation in choosing functionalities and interfaces that meet user expectations the solution is widely used and accepted by the end-users. Even if the return of investment of this project cannot yet been calculated, Casino is convinced that this project will bring great value to their customer-centric strategy in the near future References Research for this case study was conducted by Caren Hochheimer, Altran, on behalf of the Sectoral e- Business Sources and references used: Interview(s) with Stéphane Bayle, 4/01/08, Sainte Etienne France Casino group Company annual report 2006 Websites:

7 About this document This case study was initially published as part of a comprehensive Sectoral e-business Watch study report on the retail industry (2008). The European Commission, Enterprise & Industry Directorate General, launched the Sectoral e-business Watch (SeBW) in late 2001 to monitor, study and assess the implications of ICT for enterprises and sectors. The results support policy formulation, notably in the fields of industrial and innovation policy. All study reports and further resources such as data on ICT adoption in enterprises are available online at the SeBW website (www.ebusiness-watch.org). For further information, please contact European Commission Enterprise & Industry Directorate-General D4 "ICT for competitiveness and innovation" Sectoral e-business Watch c/o empirica GmbH Oxfordstr. 2, Bonn, Germany

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