Nespresso’s Direct-to-Consumer Strategy: A Mixed Bag of Coffee

While Nespresso machines are for sale at a wide range of retailers, the company limits the distribution of its coffee and espresso capsules to its own stores and web site (and Amazon, but often with a mark-up). This means an above-average proportion of Nespresso owners interact directly with the brand. Many brands would love to have this type of control over the customer experience and the ability to make sure customers see the product the way it was intended.

I hope, at least in cities where there’s a Nespresso Boutique, many of these customers are experiencing the brand in-person. The retail/restaurant spaces are very well done, if skewing toward an older customer with their design. The process of purchasing capsules is gracious, helpful and fairly seamless. Samples are proffered, information provided, signs and pricing clear and checkout easy. Because Nespresso is one of the retailers continuing to invest in front-line people even if traffic has fallen off, someone’s always available to answer questions. I’ve never seen a line. In Soho, the Upper East Side and Beverly Hills, the attached restaurants are high-quality and on-brand.

Nespresso has a significant opportunity to extend such a positive physical experience to a better digital one. The web site interface and functionality is poor, mobile-optimized web is nonexistent and the app (which is relevant for this type of category and purchase frequency) doesn’t add value. Auto-replenishment seems like an obvious addition and the 200-capsule (~$150) threshold for free shipping is high. Orders for fewer than 50 capsules won’t be shipped at all. At least there’s a way, once you find it, to review previous purchases to inform new ones.

Because interaction with Nespresso is nearly required for machine owners who need to buy capsules, the brand is fortunate to have data on its customers that brands that rely on third parties can only dream of. I don’t get the sense that they use it for any type of e-mail segmentation or CRM. But even at a mass level, Nespresso could be doing so much more to be a content hub for coffee devotees. This applies to the site, e-mail strategy and in-store events.