Nespresso – selling consumer durables today

Nestle's Nespresso is such an interesting store for retailers and visual merchandising professionals in particular: a single product category of a new and fairly unfamiliar product, which has escaped from the kitchen section of a department store – where we might expect to find other similar merchandise – to have its very own store. How the store is laid out, and how it presents its product to the customer is so interesting! Let's take a closer look.

The store has two functions: to sell machines to new customers, and to sell those very expensive coffee capsules to a captive market. I'm certain supermarket chains worldwide are doing their best right now to work on ways of creating a generic version, which will undercut Nespresso. The minute they succeed, Nespresso will have to work very much harder in terms of product and service to succeed.

Meanwhile: how do you explain to a potential customer how Nespresso machines work? How do they decide which one they need?

The store on London's Regent Street is an example of the best of contemporary retailing: the coffee capsule section is designed to look like an upmarket bar with capsules in their appealing, muted-metallic aluminium foil packaging, neatly colour-blocked behind the counter. Purchasing coffee capsules is not just replenishing supplies as at the supermarket – the experience is akin to selecting a fine wine, but is the experience of buying a machine that is really interesting. The sales floor is divided into sections each with different types of machine, but here the clarity ends. A slow wander round one afternoon recently, left me no wiser as to which might be the perfect one for me – should I want a machine that will make not-quite-hot-enough coffee, at a more expensive rate than other coffee making methods.

The accessory section is clear enough: an array of espresso glasses, spoons, and capsules. Once the customer has bought a machine, the add-on merchandise is appealing. With espresso cups, glasses, etc., and the customer needs little help from the sales staff, but the inclusion of duplicated merchandise, a coffee machine, in each of these sections risks blurring the display until both sections seem only about selling machines.

The dedicated machine sections on nicely laid out shelves, are frankly, totally confusing! I understand that some machines have a heated milk option and some don't. I should confess we had one in my previous office – we rarely used it as washing it up in an office building without a kitchen, was so annoying (the ladies loo was not really designed for copious washing up). I understand they come in a variety of colours to match the customers' décor, but after that why buy a large white one instead of a small silver one? Both seem to make just one cup of coffee at a time – at least with a Gaggia machine the difference between one and two cups is obvious. The footprint of one is three times the size of another but for no apparent added benefit. These things may not be so important in some homes, but in many with small kitchens (especially new build), or office spaces (especially in Asia where real estate prices are horrible), space is at a premium.

Signage does list the features and benefits of the machines – but in the dullest fashion: does anyone read these things? The store relies heavily on sales staff to engage the customer and to explain the range. I really like this: people sell effectively to people, far better than display can ever do (see any Apple store for a perfect example of the truth of this), but this Nespresso store doesn't have enough salespeople: no-one approached me, nor several of the other potential customers who were wandering around the store looking at machines whilst I was there. There is a section where potential customers can make their own coffee. It was strangely deserted although the store was busy. I was reminded very much of the experimental phone booths that BT installed on London streets in the mid-1980s – a winged affair, with lots of glass (an internet search has failed to find any images). After a while they were withdrawn: apparently no one knew how to use them, so they remained unused. Customers have to be shown how to use something, otherwise, they fear damaging the machine, or worse, making themselves look stupid. Maybe super-clear instructions might help?

There is an excellent video section in the store – it even makes a coffee machine look reasonably exciting, although it is not instructional – all set against warm mid-toned wood panelling, a nice coffee-like choice for a store selling coffee machines. And the video wall by the coffee bar is excellent, running a classy-looking, slightly arty, series of images using kaleidoscope techniques all based on the coffee capsules.

Where Nespresso does score is with the coffee bar for tasting. The sales assistant was busy serving a queue during my visit. The lack of high stools did not encourage potential customers to linger over their coffee, and I wonder how many coffees are converted into sales as the poor assistant was so busy making coffee as a barista, there was no time for any sales discussion? Great idea, but would stools and dedicated sales staff to talk to customers help, too?

Last up, or perhaps first for the potential customer, are the windows. These break the rules of upmarket, international, designer-brand marketing: they have no merchandise in them. OK, the store was displaying a series of photographs related to coffee, but still windows help to sell merchandise – and are obviously part of the reason Nespresso has chosen to locate on Regent Street – so this really is a missed opportunity. Marks & Spencer had this pegged many years ago, when it instituted open-backed windows allowing customers to see into a store even when it was closed. Time-pressed today, we may not do so much window shopping as our previous generations, but still, Nash's terraces are a pleasure to look at and a draw for London's tourists, whether the stores are open or closed, and not to have product in the window is a 'missed trick'.  

Nespresso is in a similar developing market to Apple and other computer stores; Nokia with its stores focused, in some parts of the world (especially south and south-east Asia), very much on potential male customers; and all require retail solutions which make a one-product retailer look exciting, desirable, and a 'must-have,' as a key to success. Jo Malone, watch brands, and perfume stores such as Penhaligon's share similar problems: how to make the potential customer who is unfamiliar with your product feel they are welcome, to learn about the product, and decide they must have one? Nespresso is a fascinating case study. I'll be watching with interest – but until it makes a hot chocolate capsule (why don't they? I don't drink coffee), I'm not likely to become a customer.