Nespresso is a success story that should not be missing from any top list of product and business model innovations. With excellent taste, exclusive style and experience, the Swiss company has managed to sell its coffee many times over, far from any price war. About providers have already tried to copy it.
Customer need for "sustainability
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Nespresso created a truly transformative experience for its customers in recent years. In the article below, Olivier explains the Nespresso success by implementing the digital transformation in its business model. Like many industries, the coffee industry has changed over the last years. Nespresso was founded in , is present in more than sixty-four countries, employs 12, people, has annual revenue of four billion dollars, more than boutiques in premier locations, five million Facebook fans, and , unique online customers every day. Since they sold close to 28 billion aluminum capsules. Nespresso transformed coffee from a simple product to a sophisticated coffee drinking experience by enabling personalized and engaging connections, blending the physical with the digital to act as one. The company wants to deliver the perfect coffee experience, while you take your time to enjoy the moment. Yet consumer pleasure is why we do it. When you order capsules, they are delivered within two days to your front door.
Much to the chagrin of my many fiends who are coffee aficionados, I am an unashamed Nespresso fan. But I despair at the company's disjointed, disconnected and dizzyingly confusing web presence that in turn makes for a poor omni-channel experience. Failure to solve for this is hurting the company, not least in lost opportunities to connect with its fans, allowing competitors a near open field upon which to plant their brands. Returning to Europe from the US provided a great opportunity to revisit coffee choices. For years a Nespresso fan and having accumulated an assortment of machines, I'd managed to fork lift my much beloved Maestria from Spain to the UK in hand luggage. I know - don't go there. But I was increasingly disappointed with the machine and specifically its milk foaming capabilities. In fact, the one thing that lets down all Nespresso branded machines is milk foaming which I have consistently found to be sub par and well below barista expectations.
Remember Me. Predicated on the idea that anyone can make the perfect espresso just like those served in the best Italian cafes, in , Nespresso created and dominated an entirely new coffee category, the gourmet single-cup coffee market. The product consists of high quality, individually-portioned coffee in aluminum capsules for use in specially-designed machines, sold at household appliance retailers and the Nespresso shop See Figure 1a and 1b below. Nestle tried to maintain its grip on the capsule market through the use of its numerous patents and legal action against some of its rivals, but had little success. As a result of these changes, the Nespresso brand has been losing global market share, by volume, to competitors. Nespresso controlled Furthermore, Nespresso, and Nestle overall, have been increasingly looking for ways to innovate and digitalize the company. Through its incorporation of technology, it has been able to focus even more on the experience aspect of its products and in recent years, Nespresso has created a transformative experience for its customers. Overall, they have enabled simple digital transactions, drove personalization and customization across channels, leveraged digital media to craft and deliver is brand, and blended digital and physical channels for a meaningful experience.