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Nespresso ramps up subscription offering

Nespresso’s new concept store in Perth.

Nespresso is increasing its marketing and communications around a new coffee pod subscription service in Australia, after a successful soft launch in early May.

The move taps into the growing demand for convenience in everyday life, as consumers – conditioned by the Ubers and Netflixes of the world – expect more seamless transactions.

“We all live busy lives…not having to make the same decision over and over is helpful,” Loic Rethore, Nespresso’s head of Oceania, told Inside Retail.

The rise of subscriptions

Nespresso now offers three subscription plans based on the number of coffee pods customers use per day. Those who use around one pod per day pay $50 to receive 60 pods every two months, and those who use two pods per day pay $50 to receive 60 pods every month. A third plan costs $75 for 90 pods per month for those who use around three pods per day.

All plans include free delivery and a 10 per cent credit, so those who pay $50 every month actually receive $55 in credit that they can put towards coffee or accessories.

The service was designed to be flexible and easy to cancel, since customers don’t want to feel ‘locked in’ to subscription programs, Rethore said. And while it currently is online only, customers will be able to subscribe to the plans in Nespresso boutiques from Q3.

“We’re seeing a very nice uptake of the program, and we’re going to continue to ramp up the communications [around it],” Rethore said.

An Australian first

This is the first time the company has offered coffee pod subscriptions – it offers subscriptions for machines – and depending on the uptake over the next few months, it will consider rolling out the service to other markets around the world.

“We want to understand how it plays out, and what kind of uptake and additional sales we can expect [from the coffee pod subscription service],” Rethore said.

“We’re in the process of monitoring that now. We’ll be able to make forecasts in a few months,” he said.

Rethore noted that Nespresso often tests out new products and concepts in Australia.

“Australia is very special in terms of markets for Nespresso. It’s considered a mature and adventurous market in terms of coffee consumption. They’re early adopters,” he said.

New store concept

The company recently has been rolling out a new store concept in Australia, which focuses on education and experience. Customers can learn about the origin of Nespresso coffee, the company’s sustainability efforts and other information in dedicated areas, and staff are equipped with tablets and can process orders anywhere in the store – similar to an Apple store.

“It’s very pleasing to see that club members have reacted very well to this new concept. They’ve really embraced the new journey of storytelling,” Rethore said.

Seven stores currently feature the new concept, and Nespresso will continue to shift existing stores to the new concept as they come up for renovation.

“Overall, the business of the new stores is doing well,” Rethore said.

One metric he cited was the customer response to the coffee master classes that Nespresso is offering in the new concept stores.

“The master classes have been fully booked. We didn’t expect such a reaction. People are enjoying not only knowing more about our coffee, but also the experience.”

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