#8 - How to make your physical POS network coexist with your e-commerce?
For this episode #8, we're going to dive into the world of the coffee brand Nespresso to learn more about: "How to make your physical POS network coexist with your e-commerce?"
👉 Does the visibility of one boost the profitability of the other?
To answer this important question for your retail strategy, I had the pleasure to receive a true Marketing expert behind the microphone of this podcast: Julie Saverys. Today, Head of coffee marketing at Nestlé Nespresso SA, she has worked for three multinationals, leaders in their sector: L'Oréal, Coca-Cola and Nespresso.
☕️ Coffee and success stories lovers, this podcast is for you!
For this episode 8, we’re going to dive into the world of the coffee brand Nespresso to learn more about: “How to make your physical POS network coexist with your e-commerce?”
👉 Does the visibility of one boost the profitability of the other?
To answer this important question for your retail strategy, I had the pleasure to receive a true Marketing expert behind the microphone of this podcast: Julie Saverys.
Before you start listening, I’d like to ask you the following question: what do you know about the Nespresso brand, apart from its legendary taste and unforgettable muse, who is none other than George Clooney? Did you know, for example, that the company’s beginnings were not as straightforward as they seem?
👉Julie Saverys will explain how the brand has grown to reach a turnover of 5 billion euros and 450 shops in 65 countries.
👉 Thanks to the listening of this whole episode, you will learn more about what makes the reputation and success of this world-renowned brand.
But not only that! We will tell you more about how to create a real “CLUB” around the brand.
👉 Discover also:
- the strategy(ies) to make your online site exist and cohabit with your physical shops,
- the KPIs to follow absolutely to maintain its turnover and its customer relations and
- the specificities and the value brought by flagship stores.
We will also analyse the means put in place by Nespresso to maintain Customer Satisfaction, so dear to the brand.
I can already tell you that the link they have created between the consumer and the brand will make you jealous. 👍
Let’s go for a new episode of dgenious, let’s talk retail, passionate and exciting.
PS: Due to a technical problem, the sound quality of this episode is not as good. We apologise for this and wish you a great listening experience with a very enriching content!
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Gaëlle Helsmoortel: Welcome to Dgenious, Let's Talk Retail! The podcast that shares with you tips and best practices from key players in the retail and franchise industry. Each episode is a conversation with an inspirational person or an expert in one of the key areas of modern retail. My name is Gaëlle Helsmoortel, I'm the CEO of Dgenious and I work every day with my team to enable retailers to boost their business through easy access to their data. If you're not afraid of new ideas and want to have a good time, this podcast is for you.
Gaëlle Helsmoortel: Hello and welcome to another episode of the Dgenious podcast, Let' Talk Retail. So, this morning, we're going to talk about coffee with my guest Julie Saverys, who is the Head of Coffee Marketing at Nespresso in Switzerland, in Lausanne, I think. Hi, Julie. How are you doing?
Julie Saverys: Good morning. I'm very well, thank you.
Gaëlle Helsmoortel: Actually, Julie, I didn't invite you here today to talk about coffee, even though I have my little pod in my Nespresso machine every morning, but I obviously didn't ask you to be here today for that. What really interests me, and I think our listeners as well, is to know how a company like Nespresso is able to cohabit, I would say, with a large network of physical points of sale and a site, an online site, an e-commerce site. Does the visibility of one boost the profitability of the other? That’s really what I'm interested in today. Maybe, before asking you the first question, so that our listeners know a little more about you - obviously, they can go on LinkedIn afterwards - you have a track record that is quite impressive because you worked in three multinationals, which were all icons in their sector, first L'Oréal, then Coca-Cola and then today, for I think a little over 9 years, at Nespresso, so still in marketing. So, we have a real expert with Nespresso. Well, I don't think it's really necessary to present it. Maybe just two or three words. Because I confess, very naively, very humbly, that I was very surprised to see, when I did some research, that it was in 1970 that the patent for pods had been registered. Me, Nespresso, I thought it was George Clooney in the early 2000s. So, no shame on me, certainly. I was really surprised that it was such an old guy. I was also surprised and maybe even a little bit reassured that it wasn't always an easy start. So, it's interesting to see that a company that today, I think, has a turnover of 5 billion euros, with 450 stores in 65 countries - you can correct me if I'm wrong - but it's reassuring to know that we can go up. It is possible to have such a success with sometimes more difficult beginnings. So that brings me to my first question, of course don't hesitate if there are things that you would like to complete or adapt in relation to what I have said. Otherwise, my first question is: according to you, how did the reputation and the success of a brand like Nespresso come about?
Julie Saverys: That's a big question. So, thanks for inviting me. The site in question, given your surprise, I'll give a little check background. Actually, it all came from a crazy idea. It's a bit of a love story, a love story for his wife who got married and was madly in love. I had the chance to meet him. Really in love with his Italian wife who came to Switzerland for him. So, he made a promise to her to give her coffee like she used to drink in Italy. He actually liked a black coffee pack. He's not a barista at all. A pack that, so actually less, could create that pressure, because that's what the eco brand and all these great Italian women who are going to come into the bars in Italy today, into the coffee shops search. How could he recreate that so that it could be done at home? That was the whole idea. Starting in September, it was his quest to recreate that. He was very lucky because he was given free rein to do what he wanted, to continue his research. He was a passionate man, convinced of his ideas, still. He spent seventy years, but he still likes it. And he kept chasing that idea, chasing his dream, to give his wife the coffee she wanted. So, it was really small and for the patent, I didn't even know thank you, it's in the years 76-86.
So, the success of Nespresso in fact, we are convinced that success depends on three parameters. One, the product was quite disruptive to make a mega high-quality coffee easily, so always the same coffee, you always go through the same quality, just like you like it in 2 minutes. So that was it, it's the product that makes the whole thing. The second one is obviously the club, it's a rather avant-garde expression too, it's that we have a direct relationship with each customer. We have the chance to know each consumer, so in quotes, we have a direct action, which is great. Because on the one hand, he asks you something, you can directly answer, we can do things that nobody else can do. Because we are in direct contact, but not the constraints of retail, not the contract of chefs. We don't have the constraints of premium, we have a lot of advantages. I'm not saying that there are many advantages in common. Each consumer can do what he wants. That's an opportunity and a huge strength, so that was the second pillar. Then the third pillar will be the brand. So, it's not insignificant that you know the brand well and with George Clooney. It's George Clooney who did something incredible and it's a well-known recipe, since at L'Oréal it's also something that's done, taking well-known people to be in favor of the brand that gives this visibility. I say it's really the magic of these three elements that makes Nespresso always a great success.
Gaëlle Helsmoortel: That's interesting. The Nespresso Club is a little bit, a little bit of an inventor of a community. Today, we are ready to create communities, in fact a Nespresso community. You don't talk about communities in your company. Is it really the club?
Julie Saverys: Anyway, because it's easier to be a club, in relation to the coffee you drink, where you live in relation to a lot of things, your lifestyle. We don't talk about age groups anymore, we talk about size, if I can say. It's just a number, you can see your head very clearly towards consumption, like a young person, while seeing 50 years old, so no worries about that. We talk a lot about community, because it's a great thing, maybe an expression was very precursory in this club. Afterwards, it became like that. It was very small in the beginning because it went from house to house. You couldn't start in a big place because it's too small, massive. There's a whole system, so it's not a problem, you need the coffee machine. So that's kind of how it's done, in a very clever way, it's been harnessed. Harnessing that energy to really make it into something fantastic.
Gaëlle Helsmoortel: Okay, you have all these physical stores, so you have the online site. Marketing wise, how do you manage that? So, do you have separate budgets or one budget? You specifically handle one or the other. How did you organize yourself to coexist and to maintain, marketing-wise, I want to say these two channels?
Julie Saverys: The two channels are not the same. As we said earlier, it was quite online, we were quite a precursor on that and the sales were only online, we had no physical presence. The physical presence started very late, so really, at 20 years, 30 years later. And why was it created? It was created because online is more “transactional”. Today, it was obviously for the brand, but in the beginning, it was really more transactional. Whereas the stores since the beginning have much more vocation than the image. Because somewhere, you show who you are, you can tell many more stories, you have a physical presence with all the qualities that we have, there is not this proximity that a store brings. As a result, one is not the same. It's very different, I think everyone has phases in their life. We have closing time. As a result, consumers are very different. Their needs are very different. So, my coffee consumption is also very different. So, everything is different, the communication, etc. Everything will be focused on the consumer, and that's what the channel is all about. In the boutique, it will really be more about the brand, showing ... really making them discover new things and showing Nespresso stuff. Telling them a story online is not possible. We all know that people spend time on a tablet, but on a site like Nespresso, they don't even spend a minute, so everything has to be much more efficient, almost transactional, so that people lose as little time as possible, and to really accompany them on their journey so that it's a beautiful experience that meets their expectations. I don't think they want to see 100 films before drinking their coffee. The assets that we develop are going to be very different.
Gaëlle Helsmoortel: I can confirm this because I am a big Nespresso coffee consumer. I always order online. It's almost the same recurring order. However, when I pass by a street where there is a Nespresso outlet, I go in. It's rare. But even abroad, I can go and have a coffee. And it's true that you really live this experience. And I still believe in physical stores. Do you also? Do you think you could do without these physical stores?
Julie Saverys: We're big believers in that, but really, here we want to do things, we have to do them right. We're a very, very beautiful brand, we're very lucky to have such a beautiful brand and you have to do it right. And we have to work with the elements we have. For example, we look by country, it's very different. I'm thinking of China, for example, where people go to the big malls out of experience. That's already a lot of constraints. So, in Paris, you can't have a store in Champs Élysées that is sublime. There are boutiques that allow you to make a flagship. And then, people see. They can touch the coffee, can talk during the hours. They can take coffee classes, they can meet people, they can be in a little exclusive club, meet farmers, meet artists. Something like that. But in some stores, that's not possible. So, you have to find that balance. You can't just do flagship stores. You can only do “small shops”. It's a bit of that. Our strategy is to see how we can optimize what we have without losing too much. We have to be focused on what we do. We have to be convinced that what we are doing is good.
Gaëlle Helsmoortel: And to have some relay places. I remember that in Brussels, I had seen a kiosk in a shopping center, where there was not the whole story, it was rather a small one. Do you still do this kind of thing or... ?
Julie Saverys: We do a lot of things. What we're trying to do and we have done as well. At Nespresso, there's a lot of people, with every CEO you talk about Nespresso, they all have a story, once I did that, I took a big step, I could have gotten fired. They're always people, every CEO I've met tells me that. We had a budget two or three times, the person who created the first store told me that. I did the first store, it was a huge success, but we could have improved. Today, it continues like that. For example, what we did in Barcelona. It's a place where there is a lot of traffic. There are some kind of dispensaries, but it looks very media-friendly. But it's really an incredible thing. It's a sort of cube where you make your order and you see arms going around, getting a piece of your stuff, but kind of like Charlie and the Chocolate Factory. There's a different magic but it's there and just seeing that, you can see the buzz it created. So, we continue to do this, we continue to try, not everything is successful, in all transparency. The number of stores we had to close, the number of sites we had to close. But we keep trying to surprise. And as you would rightly say, to have on the one hand flagship stores that are really all wow and when you're really inspired to give you desire and that are much more transactional.
Gaëlle Helsmoortel: I had no idea that Nespresso had started online. It's like Google, which is now opening its first physical store in the United States, where Amazon had launched ... Nespresso was really a forerunner. I didn't know that. So, at the time, this may be a dumb question, but in the nineties, well if it started in '86, it was through the mail then at the time?
Julie Saverys: By mail, yes yes. And representatives. But it didn't have physical stores. Streaming online as I said online is our main. So, the stores are more for image, for event. The objective of each channel is to be able to do that. It's terribly complementary, both in the offer and in the clientele and in the story.
Gaëlle Helsmoortel: And so, I really believe in this complementarity, I think that the story is very, very logical and that you try things and that there are different countries where I think it makes a lot of sense. Effectively, the objectives of each channel are not the same. So, I guess the KPI's that you're tracking for one and the other are also very different. Do you have a chance to say what are the elements or the keys that you're tracking for either of those channels?
Julie Saverys: There are capital goals. You still have to create some revenue. Then there is also customer satisfaction. Are we able to do the thing for the consumer? So, online, what will be very important is the time that passes, the number of clicks, the number of customers who complete their order and this can be different from country to country, for example, in the United States, three clicks is too much. So, you have to be able to do that in one click to see how. Because you want to be efficient. So, the number of orders that are completed, the turnover, the average basket, how many coffees they buy, the mix, how many different coffees. And also, the customer satisfaction, are they happy with the experience they had. We have a life panel, so we have consumers all over the world to whom we can always ask questions, so they can always tell us I'm not happy, I was in the store, it was not good and everything. We have shoppers like everyone else, like every brand, I think. When people come out of a store, we ask them at that moment, on the spot, how it went. So, we can act very quickly, because we really have our hands on the jar, we can really rectify each time there is something wrong. The customer connection with the brand is great. We can do a million things.
Gaëlle Helsmoortel: And so, the costumer’s voice, the moment the customer has bought, you call him on the phone or you send him an email to ask him what he spent?
Julie Saverys: We ask them if they're okay with it. From that panel, yeah, so we call them, we ask them, but they're also very proactive. So, a lot of it is they're always going to be very responsive. They're always going to tell you if there's something wrong, they're going to tell you that too so it's in the good and in the bad.
Gaëlle Helsmoortel: You have like a panel, I don't know if you can tell, but it's a big panel, because it has to be by country, so yeah, it's amazing.
Julie Saverys: Yeah, by country or by age range, by gender, that you can filter all that, that's great.
Gaëlle Helsmoortel: That's great. I think it's interesting what you were saying at the beginning when I said that your categories were also more lifestyle. Because indeed, between 20 and 30 years old, we can have older habits and vice versa. And you, how do you do this lifestyle category?
Julie Saverys: Targeting? Marketing segmentation? Every brand is different, you have to have your typical consumer in mind and we did a market research for a year in 5 or 6 major markets. And then we really try to understand the whole consumer, that is, not just Nespresso, it's hidden. If he drinks bean, soluble, whatever. To understand what makes the consumer tick. Is it the sociability, is it the ritual? There are a lot of lifestyle questions. What do you do when you brew coffee. It's really about understanding the consumer as a whole. In relation to that, we try to find similarities. We're going to try to have groups, for example, a group called "ritual lovers", these are people who like coffee for the coffee and everything that surrounds it. But they don't go out and buy new things, they're pretty traditional in their approach to coffee, but they love coffee. But just ritual lovers, that tells you what he's like. We have another one that's very exploratory, he's someone who in his soul loves to change, move, travel in every sense of the word and see all these different segments or segments to really try to meet their expectations.
Gaëlle Helsmoortel: Yes, I see it every day when I am sure ... when I make my order, there are always new things. I do not know what category I am. Also, always the blue lungo. So there, all the novelties, I take them every time.
Julie Saverys: There you go, you are the famous explorer!
Gaëlle Helsmoortel: Well, I'm not in the panel, I confirm. And you may have mentioned it a little bit when you said that you hoped that physical stores would always be part of the ecosystem, if I may say so, of Nespresso. But how do you personally see the future of physical stores in general? And of course, Nespresso in particular? What is your vision on these subjects?
Julie Saverys: I think it will continue to exist. I think it will, I think it will. We've already seen it with Covid, as soon as the stores reopened, there were lines, people were happy to come back. Where I think it will evolve is that a store, more and more, cannot be transactional. A boutique, for me, must really be the heart of the brand and offer much more than just the products, it's a real boon. More and more stores are designed in this sense. That's why we have private rooms, where people are invited to tasting evenings to be more intimate or to really talk, exchange and have a different experience. The transactional part has to be rational. It must always be there of course, but there are also a lot of places or self-service where you just take the coffee you want and you leave, you pay directly. So, it's as efficient as possible. To answer your question, for me, yes the stores will stay, but we have to be able to offer much more, much stronger than what we can do online.
Gaëlle Helsmoortel: Yes, I agree. And don't take away the physical stores because I really want to go shopping,
Julie Saverys: An example that I find extraordinary in the field of coffee of course, I am biased. I don't know if you ever get a chance to do that, is to go to a Starbucks Roastery. It's magical what they do.
Gaëlle Helsmoortel: I know Starbucks, but not the Roastery.
Julie Saverys: There's not many in the world, but it's amazing. We have one that's in Vienna, but Starbucks has more than we do and obviously we're complementary, we're not going to sell the same thing but maybe it's more us, since they started before us. But when you go to the Nespresso store today, you go in, there is a roaster, so you can if you want smell the coffee. There are 3-dose things, there are things for the aromas? You see the coffee that's produced. When you really see Starbucks, it goes further than us, there's a kind of industrial line where you see the roasted coffee, then you can follow the whole thing. And then you have a kind of bar, like at Nespresso, where you can taste all kinds of things that you wouldn't taste elsewhere. For example, ice cream with caffeine. There are coffees that you've never seen in your life, there are coffees that have won awards that you'll never be able to see in a store. There's a capsule, but what is it? It's very small. You can give the consumer a really unique experience. Extraordinary examples, so I hope that Nespresso will also have the courage to go all the way because it's fabulous. It takes courage to go for it.
Gaëlle Helsmoortel: Well, for the moment, you have always been daring because that's what's important too. It's to know how to question yourself and indeed, to have this courage and this audacity. And maybe to finish, what advice would you give to anyone who listens to us? Today, it's a real subject. We say to ourselves, physical stores, online stores. Do I keep both? How do I make the two cohabit? In a very simple way. What advice would you give them?
Julie Saverys: One thing we picked up with the Covid, which may have sped things up, is that people are looking for an experience. It only remembers the experience somewhere. So, actually, what we need in the world is that. You have to, when they come home, they have to get your product and you have to make them dream, you have to have the time for them, you have to listen and you have to offer that moment of escapism. As soon as someone goes shopping, they want to dream, they want to treat themselves. It's totally fine at that point, you absolutely have to try to make them dream and I think that's what you have to do and once they have that first fantastic experience, that's when you've earned a consumer for life. For me, that's what it's all about, making people dream and being available. The work on the side, it's hard to say, well it sounds weird to say but it should be secondary.
Gaëlle Helsmoortel: Yes, but there, I agree with you, being secondary and above all, as you say, must be efficient and I think that's what I understand when you say secondary because I think that today, going to a physical store, standing in line and seeing one of the people who work in a store that, at that moment, it's something else, it's frustrating. And then you think well well, it would be faster on the internet. But I agree with you with the sharing of experience and making people live an experience, I think that's key. And there's one more thing I'd like to ask, because I think you'll have done ... everyone will be jealous of what you said about knowing all your clients. Because obviously, that's the richness that it is to have known your customer and that the customer accepts that the brand shares information with him and he sends him a newsletter or something. We know it's important, but how do you do it? That's the subsidiary question, how do you get them all to agree to give you their data, their contact information and to be known by you? Do you have a special secret to do that?
Julie Saverys: It's not successful every time, but I think you have to be very respectful, i.e. make sure that there are not too many newsletters, that you don't bombard them with things, that you don't give them things that they don't need to know. Especially not sending 2 emails about the new machine. It's a silly example but it's really about being respectful to that person and being very, very humble, very happy and proud that that person is giving access to metric waves so that it's used to good effect. For example, we'll send a gift, we try to make things pretty personal in quotes. For anniversaries, for the 50+ years of Nespresso, I'm pretty sure, I can't speak for the whole world, I don't know how each country does it but we try to celebrate that. We try to say to people when the machine is getting old, come to Nespresso, you will get your next machine for free. Really trying to make it a benefit in a very respectful way. And that's what's most important, respect and unity in relation to what the consumer is giving us.
Gaëlle Helsmoortel: That's a wonderful conclusion I find, this respect for the consumer. Presumably, they give it back to you. So, there you go, Julie, thank you very much for sharing these best practices secrets with us. And thank you personally, thank you for this moment because it was a really nice discussion and interview. Thank you very much. See you soon!
Julie Saverys: See you soon!
Gaëlle Helsmoortel: Thank you all for watching this new episode of Dgenious, Let's Talk Retail. The full transcript of this interview is now available on our website dgenious.com in French, but also in English. And I'm also putting the direct link to the transcript in the bio of this episode. I look forward to seeing you in two weeks for a new theme and a new guest of Dgenious, Let's Talk Retail and until then to develop your business, Ciao.
I'm Gaëlle Helsmoortel, CEO of dgenious. I work every day with my team to enable retailers to boost their performance through quick and easy access to their data.
With Let's talk retail, I welcome my guests around specific and varied themes that will offer listeners the opportunity to take action in their own business immediately.
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