LONDON, UK – Caffè Nero has just launched its first customer app, upgraded its product range and moved into FMCG coffee sales, via Ocado – but it’s not about to bite off more than it can chew, says head of marketing Marcus Denison-Smith.
The new app, developed by Yoyo, offers a digital alternative to the stamp-based loyalty card, along with (optional) mobile payment, and flags up offers and new products – but that’s it, for the minute.
That means that, unlike its American rival Starbucks, Nero will not be letting you order ahead on your phone and have your coffee ready and waiting when you arrive in store.
Despite the potential of such a function to bump up sales, there are a number of reasons for this – not just the struggle of staff to keep up with demand that Starbucks has seen.
“We’ve certainly considered it,” says Denison-Smith. “But in terms of our operational style, it doesn’t lend itself. We don’t have someone standing on a machine constantly making coffee.”
This is actually key to how the brand positions itself apart from its two larger rivals, Costa and Starbucks.
“One of the things that is a slightly hidden but part of our experience is that when you come into a Nero, it’s always a one-to-one service,” he says. “The barista that takes your order also makes your drink and takes your money.
“People don’t notice and it’s never something we would shout about, but it creates a much more personal experience – that barista will then remember you and your drink, and if you come in two or three times they’re very quick to learn what you like. And you don’t have that conveyer belt feeling.”
It is indicative of the approach to marketing by former ad man Denison-Smith, who joined Nero in 2015 after 12 years with Iris Worldwide, the last three as managing partners.
The brand’s priorities, he says, are the level of service, the authentically Italian cues of its 650 stores, and the quality of the products.
That includes the coffee, of course. Though everyone has their own preferences, Caffè Nero has been named as the best of the major brands by the likes of Which?, and it is now aiming to utilise that reputation by launching its coffee into retail, initially on Ocado.
“Our brand is very much at the moment a retail experience – and the only other thing was the loyalty card,” says Dennison-Smith.
“That was the biggest bit of brand equity we had outside the stores. But now we think people should be able to drink the same quality of coffee they do in the stores at home.”
But while the coffee has always been the first priority, there was a sense, he says, that other products were not pulling their weight in terms of giving customers a reason to return.
To rectify that, Caffè Nero has rebuilt the food menu and has just launched a new range of iced drinks, designed with far less sugar than before to satisfy changing demands. The ingredients being used have improved; all the chocolate is now Belgian, for example, and the mangoes are alphonso, considered a superior variety.
“Everyone’s really proud of the brand, of the coffee, but people have been probably less proud of the other products we serve,” says Denison-Smith. “That’s the journey we’re on: how can these guys sell a slice of cake with the same vigour as they would talk about a flat white?”
All these moves are aimed at the long tail of occasional customers, he says. “Our task is not necessarily about recruiting a load of new customers, but trying to be more meaningful to those customers that come to us less frequently. They haven’t necessarily got into a habit of coming to one particular place – so how do we try to create that habit?”
He won’t be doing that with large-scale advertising, though – or by trying to create a big, obtrusive brand personality. While rival Costa received a lot of attention last year for taking a high-octane approach to its messaging, Denison-Smith agrees Nero isn’t a “shouty” brand.
“I don’t think we’d ever be bold and brash,” he says. “It just wouldn’t be very authentic, would it? I don’t think that’s the experience you get when you come in here. We’ve got a really simple brand purpose, which is making a positive impact on someone’s day.”
Denison-Smith faces a limited budget, but says he is ramping up online content with a strong focus on the world of coffee and the story of the brand. “We haven’t even begun to tell the story as well as we could have done,” he says.
“That story has to be about our product at the heart of it. We don’t need to embellish that by trying to be something we’re not.”
Lacking the resources to splurge on marketing is a healthy situation to be in, he adds: “I certainly think it’s good discipline to do the best job you can with the smallest amount of money – it challenges you to be really focused on what’s going to make a big difference, and what you’re really good at.”
Simon Gwynn
