How Caffè Nero is building customer relationships through mobile

It's been a year since Caffè Nero launched its mobile payments and loyalty app, and it says the technology has boosted customer engagement levels over the last 12 months, helping drive sales and consumer retention.

Simplicity and convenience were the key goals for the UK coffee chain when it planned how the app would look and function. There was also a desire to produce an app that was unique to the business, not a white-labelled version of another organisation’s technology.

That has been achieved through a partnership with Yoyo Wallet, which brought the mobile app to life in April 2017 as a way of digitising the hospitality brand’s long-running paper-based stamp card.

Before the app was launched, the only thing the organisation could clearly track about its target market was how frequently customers were entering the store via Wi-Fi monitoring. There was nothing else the business could confidently say it knew about customers, which stemmed the flow of targeted communications.

Now, thanks to an embedded transaction API, customer basket data can be accessed and analysed by the brand, revealing what users are buying and when. Yoyo says with these tokenised payments shopper data is kept secure, but Caffè Nero’s access to the information means it can run promotions to support a certain store, segment of customers, or an individual product.

James Flett, partnerships manager at Caffè Nero, who was on stage at this year’s RBTE to inform event delegates about the project, said: “This is the first time that we’ve had access to basket-level information – we can now identify, recognise and have a relationship with the customer.

“We’ve been overwhelmed by the positive reviews we’ve had from our customers. We’re trying to get closer to our customers and build better and longer-term relationships. The only way we can do that as a brand is if we can connect with the customer and recognise them at the point of sale (PoS).”

He added: “Brands who don’t do that and continue to treat their customers anonymously will continue to fall behind.”

Targeted advertising via mobile

Audience members at RBTE heard how the company’s access to new data points has been put into practice. At one stage, Caffè Nero targeted its customers with an offer to visit a store and drink an iced latte, and the campaign resulted in a 215% increase in shoppers who bought an iced drink and a 63% jump in average transaction value for those who had an iced drink in their basket.

Over the course of the year the app has attracted 350,000 registered users and processed more than 3.6 million transactions. It awarded over 5.7 million loyalty stamps to customers at the PoS in that time, too.

Flett explained that the app was built with a “customer experience-first” approach, whereby the team addressed the needs of the user first before “working back to the technology”. He said, for some customers, the app has reduced the pain associated with paper loyalty cards being lost or mistakenly ending up in the washing machine after being left in trouser pockets.

One year on...

  • 350,000 registered users
  • 3.6 million mobile transactions
  • 5.7 million digital loyalty stamps

Digital cracker

Last Christmas, the coffee chain ran a Christmas cracker-themed campaign via the app, with users given a ‘digital cracker’ loyalty point every time they made a purchase which would contain anything from a cheesy joke to a gift voucher for a third-party retailer. The brand reported a 13% increase in average customer spend as a result of the initiative, and it allowed customers to engage with the company outside the four walls of its stores.

Flett said there is work to do to convince all customers to change their behaviour and switch from paper-based app to the digital wallet, but there are ways the brand will be working on this challenge in the months ahead.

“What we need to do is try and show the value exchange,” he explained.

“At the moment it is very much about simplicity and convenience. Our regular users love the app. It’s about getting them to become advocates but also to show the greater value that they can get via the app. Rather than saying ‘you might get a cracker’, [we can make available] rewards and benefits through the app."