How did Nespresso, despite being rather pricey and positioned at once as a luxury aspirational brand and at the same time as a convenient online commodity, still manage to return positive results to its stake holders in spite of the global recession?
In 1970, Nestlé’s Research and Development department invented the Nespresso capsule-based coffee pressurized coffee extraction system for consistent high-quality coffee brewing on a per cup basis. The first patent applications were filed in 1976 after considerable R&D and after further R&D the system was launched commercially in 1988. Since its launch, the system has experienced 25 % annual growth and there are now 1.6 million active affiliated Nespresso Club members.
In a world in which fidelity and convenience are the key metrics to the success or failure of a product, it would appear the obvious financial success of the Nespresso system can be attributed to both. With coffee consumption now moving from the business locale to that of the home, the Nespresso coffee machine sits proudly amongst polished steel gadgets in the kitchen. Whilst coffee elitists might prefer pulling their own espresso from a bulky semi-automatic machine, the urban dwelling coffee drinker on the go requires less fuss but just as much java. Key here is that Nespresso ticks both boxes, it reduces brewing time and produces a decent espresso which ought to rival that of most automatic coffee machines. At a purely functional level then it does just enough to service the needs of its consumers with little fuss.
At an emotive level the Nespresso brand is positioned as a luxury convenience brand, with George Clooney as an ambassadorial figure adorning much of Nespresso's above the line marketing - a clear indication that the focus on positioning Nespresso as aspirational brand. Nespresso's communication suggest that it is sophisticated and charming (I shall assume like Clooney), able to pick the ambitious up and comer up from a hard day at work and just a little too expensive for the common man to indulge in.
Guillaume Le Cunff, International Marketing and Strategy Director, Nestlé Nespresso SA, commented: “George Clooney is more than just a renowned actor, he’s an extraordinary film professional who is well recognised; loved; and respected all around the world. We think his values of excellence and perfection in his work are very much aligned with our own values. The combination of our perfectly portioned Grand Cru coffees; our smart, stylish coffee machines; and our exclusive and personalised service produces only the highest-quality premium portioned coffee. When blended together, these three elements have the ability to offer moments of pure pleasure and indulgence—to make an ordinary moment truly extraordinary. An extraordinary man and an extraordinary coffee—that’s what makes the combination of Mr. Clooney and Nespresso such a powerful campaign.”
Despite a strong emphasis on luxury and convenience, the Nespresso's capsule system relies on a self-service distribution system i.e. customers can order their Nespresso capsules online or alternatively have to go to approved Nespresso dealers. In effect the control of the distribution channel serves, best illustrated by the size of the Nespresso Club, as a means of acquiring demographic, and psychographic data on Nespresso's market. Imagine, you're craving coffee and decide that going to a shopping mall to pick up your Nespresso capsules is just a pain in the ass - instead you decide that you'd rather order a months supply of Nespresso capsules from the Nespresso homepage. In order to do so you're going to have to part with a little information, your contact details, location and your product selection in order to acquire your fix. Following that you've not only registered for a mere contact sheet for further marketing you've been invited into an exclusive club of like minded Nespresso consumers and you've been offered the opportunity to connect with brand Nespresso via multiple online touchpoints e.g. Twitter or Facebook. With a focused data collection point Nespresso can offer you relevant products to try, can identify weak points in their distribution network and can deliver location based marketing which isn't intrusive but instead rather helpful.
Nespresso hasn't merely sold you a coffee they've shipped you a key component of your daily routine and a key marker of your social persona. You don't have the time to pull your own espresso, but you don't have the courage to drink instant. You don't have space for a semi-automatic coffee-behemoth in your loft apartment but you like it like that because yours is a Manhattan inspired aesthetic focused on clean lines and functional-minimalism. You're on the move so there's no time for shopping malls, but the information age allows you to connect with like minded consumers and hunt for and gather supplies concurrently.
Nespresso's strategic shift toward giving consumers what they want, rather than what the brand presumes they ought to have, in a manner which oozes sophistication, has all the charm of boutique - store service all delivered from afar - where in my opinion sales people ought to be.
Find out more about where to buy your Nespresso machine, or acquire your refill Nespresso capsules from http://www.nespresso.co.za
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