Do you remember when the best part of waking up was hearing the sound of the dripping and percolating Mr. Coffee coffeemaker preparing for the blissful moment of Folgers in your cup? For many coffee drinkers today, this is just a faint memory of their parents coffee habits in the 1980’s and 90’s. At that time, coffee was a bipolar product: regular or decaf. In a restaurant, brown handle pot or orange handle pot. The masses did not have daily choices to make between fair trade, organic, single origin blends, lattes, cappuccinos and macchiatos. The kind of coffee you drank then did not do much at all to reflect on your personal identity.
This was the world we lived in before George Clooney came and educated us on the boutiquification of coffee.
Boutiquification, as a process, entails fostering your product’s indispensability by reconfiguring it to the experiential parameters of a fashion boutique. What characterizes a fashion boutique? In short, an exclusive retail location, collections, stories, and community. Nespresso, the most boutiquified of coffee brands meets all criteria.
One central ingredient to boutiquification is location. Nespresso’s boutiquification, for instance, began in one of the most exclusive retail contexts imaginable: above the clouds in first-class aircraft cabins. After that, Nespresso marketers approached department stores for a store-in-store concept. When Galleries Lafayette in Paris first hosted a Nespresso store, Nespresso machine sales went up from 50 to 700 per year. Nespresso’s in-store success, in turn, provided the basis for the launch of its retail stores. Today, more than 200 thriving Nespresso stores exist all over the world in cities such as Toronto, London, Milan, and Paris.
Like tourism, fashion is a seasonal business. Boutiquification therefore also requires marketers to rethink their offering through the lens of seasonality. In Nespresso’s case, it not only entailed creating an entire portfolio of coffee flavors but also regular updates through seasonal brews and limited edition capsules. Each capsule is designed like a dress. It has its own color and identity. It introduces another concept known from the world of fashion: the need to make a statement through choice. Above all, however, it has its own…
Stories certainly entertain. But they are also a way for consumers to showcase cultural capital. Imagine a boring Friday night dinner at your friend’s house. What better way to demonstrate your coffee connoisseurship than educating your friends on the important differences between “Arpeggio” and “Livanto.” These are not simply coffee capsules anymore but rather identity stories – each offering a distinct origin narrative.
Lastly, boutiquification requires the creation of an exclusive community. Not all patrons are equal. Community fosters in-group/out-group dynamics. Membership has its benefits and being an outsider fosters aspirational dynamics. In Nespresso’s case, all customer management is handled through the Nespresso Club. Members carry this badge of honor on their key chains. But what does it take to join? Buying the machine of course…
Anjali Bhogal, Arohi Shah, Cristin Fagone are MBA Students in the new Customer Experience Design course at the Schulich School of Business at York University.