Nespresso sells pre-packaged coffee in branded capsules for use in its single-serve espresso machines. The company has three elaborate boutiques in New Zealand, with a fourth to be opened before the end of this year. The current stores are located in Auckland, Wellington, Christchurch. It also sells its coffee capsules through an ecommerce store.
Guillaume Chesneau, Nespresso’s New Zealand country manager, says, “The pop-up boutiques will increase the accessibility of our coffee experience for club members who live in this fast-growing city.”
The ‘Nespresso Club’ is Nespresso’s in-house loyalty programme. It manages customers’ online purchases and also covers customer service.
“We receive great feedback from club members regarding their boutique experiences; however, we wanted to come up with a more innovative retail format that would help us test the demand in retail locations where we didn’t have a presence until now,” Chesneau says. “If they prove popular, we will consider opening other pop up boutiques in other locations in future.”
Nespresso has moved aggressively in the portioned coffee market by investing in every part of the value chain, from working with coffee farmers through to running a global retail network. Until 2012, patents ensured that only Nespresso-branded capsules could be used in its machines, but upon expiration, a coffee-capsule arms race has kicked off as independent companies seek to provide alternatives.
Kiwi entrepreneurs Jayden Klinac and Josh Cole secured the rights in 2013 to distribute pods by Nespresso competitor, the Ethical Coffee Company, in New Zealand. They trade as the Honest Coffee Company.
Nespresso has also come under fire for offering limited recycling options. In New Zealand, it requires consumers to return their empty aluminum capsules to its three boutiques so that it can collect and recycle them. The new pop-up will offer an additional recycling collection point.
The payoff from Nespresso’s tight control of its supply chain, says Chesneau, is a highly engaged and loyal customer base of club members. Penetration of the loyalty scheme was a factor in choosing the new pop-up’s location.
“Our Nespresso boutiques provide our club members with a premium coffee experience, where they can see, smell and taste our exceptional Grands Crus,” Chesneau says. “By expanding our footprint through the pop-up boutiques, we will be able to bring that experience to more people. We see it as a way to build club member loyalty, which has been critical to Nespresso’s success to date.”
The North Shore boutique will boast Nespresso’s famous Grand Cru wall, featuring the full range of 23 coffees. It will also offer complimentary coffee tastings.
Overseas, Nespresso’s ‘Cube’ vending machine in Barcelona International Airport found a way to deliver high-quality service with a small footprint in a premium location. We’re hoping for one of these next.