Carrefour: what went wrong?

While supermarkets may be hard to market, Carrefour's problem could be that it hardly even tried to make its mark, say experts.

Aside from heavy competition in a rapidly evolving business environment, Carrefour's passive approach to marketing could have played a key role in killing the brand here. While other factors such as location and strong competition also contributed to the brand's undoing, its inactivity in the marketing space is notable at a time where its competitors are working hard to reach different market categories.

For example, FairPrice launching its FairPrice Finest store for a more upmarket audience, heavily advertising the new store. Cold Storage also has a mobile shopping app, and earlier launched a campaigns with SMRT to allow customers to ‘shop on the go' during festive peak seasons, buying items by QR code. Meanwhile Carrefour's marketing efforts seem to have been lackluster.

"If you were to ask me 'what do you think of Carrefour's marketing in Singapore and Malaysia?', I would scratch my head a bit ask myself 'what marketing?'," said Keith Timimi, chairman, VML Qais.

While Carrefour has produced great print ads in other regions, they failed to stamp their brand here. In the meanwhile, other heavyweights in the industry have been on the rise, such as Tesco, or regional players such as Cold Storage, NTUC and Jusco, creating strong identities, added Timimi.

"Low product differentiation means that shoppers can get similar products quite easily elsewhere, and so make purchase decisions based on convenience and price. Carrefour's competitors (Giant and Cold Storage, for example) are very aggressive in advertising and promotion, tie-ups, product availability and reach across the island," Sonya Madeira, managing partner, Rice Communications, said.

In comparison, Carrefour failed to properly advertise its strengths: its range of reasonably-priced wine, its high-quality store-brand products, low prices, money-back guarantees and so on, added Madeira.

"These might have enticed more customers to make their way to Carrefour instead of heading to the nearest supermarket."

Also, its Suntec store was not an ideal location, being in the business district compared to others in residential areas, with so many malls having sprung up on the island, she added.

Carrefour has confirmed to the local media that it will exit before the end of the year. It could not be reached in time at the time of publishing for comment on its agency relationships.