French hyper-market giant Carrefour is to provide groceries for Google to sell via its shopping site and voice-devices.
The venture, which will go live in 2019, and follows on the heels of French supermarket chain Monoprix announcing plans to provide groceries to Amazon in France.
The Google-Carrefour move is part of a chain of Google tie-ups with food retailers such as Walmart to deliver food shopping services through its Google Home device and its dedicated shopping channel aimed directly at competing with Amazon.
It also marks the heating up of the French grocery market which has, until now, been slow to adopt ecommerce. It has now become a battleground for new entrants to grocery Amazon and Google.
Since taking over as Carrefour’s CEO last summer, Alexandre Bompard has promised to become a leader for grocery e-commerce and to reduce the company’s dependence on suburban big-box stores in France – this is one of the first moves in that direction.
“This deal is a transformative measure for Carrefour to become the leader in grocery e-commerce, which is the first pillar of the turnaround plan announced in January. This is the first time groceries will be sold through Google’s interfaces in France – and the first time for fresh food in the world.”
– Marie Cheval, head of digital transformation, Carrefour (in a telephone interview with Bloomberg)
As part of the deal Carrefour will also adopt Google’s Gmail for more than 160,000 of its staff, the retailer told Bloomberg. The tech company will provide digital training for more than 1,000 employees over the next six months to help prepare for the switch.
Why do grocers and tech companies need each other?
The move by Carrefour is one of several high profile tie ups between grocery chains and tech companies worldwide. Amazon bought Whole Foods, while JD.com in China has got into bed to some degree with Walmart. Why is this happening?
For the grocers the idea makes sense: they have vast amounts of data on consumers and typically doesn’t have the skills to leverage that data in today’s personalised and engagement driven world. Google and Amazon do.
So what is in it for the tech companies? They typically want to get into the food market – it is the biggest retail sector of all – but they lack the expertise in supply chain and storage of perishable items. Here the grocers can return the favour of the help with customer data by handling the supply side.
Together, while seemingly odd potential bed-fellows, grocery giants and tech giants actually make a good team. Carrefour is just the latest retailer to realise this and act on it. Expect more to come.