Nespresso using promotions and new coffee flavours to encourage sales

Nespresso Oceania has reaffirmed its commitment to offering
incentives rather than discounting to attract consumers, despite the
intense competition being provided by mass channel, private label
capsule coffee systems.

Speaking with Appliance Retailer, commercial manager John Ciaglia
said Nespresso remains a luxury lifestyle coffee brand that will
continue to use promotions but will do its best to keep the conversation
off prices.

“We remain confident that our innovative and attractive machines and
accessories, our highest quality coffee and personalised services will
continue to attract new customers to the brand,” he said. “However,
promotions remain important sales and marketing tools for us as we
compete in Australia’s dynamic and fast-paced domestic appliance
industry.

“While we continue to see strong price-based competition amongst
retailers, our focus is on incentives that reinforce our total consumer
offering.”

After many years of near-unchecked dominance in this booming coffee
machine sub-category, Nespresso found itself confronted with some
serious competition. In addition to Electrolux’s partnership with
Lavazza, which is quite similar to Nespresso’s partnerships with
De’Longhi and Breville — both combine famous coffee heritage with strong
and respected appliance brands — there has been a flood of new capsule
coffee machines systems introduced from the major supermarket brands,
such as Woolworths’ Caffitaly brand and Aldi’s Expressi device.

Nespresso traditionally conducts cashbacks on its machine range in
the lead-up to peak selling periods like Mother’s Day and Christmas. In
order to keep the momentum going during ‘regular’ times of the year, the
Swiss company is offering a cup and saucer gift-with-purchase during September and October. Ciaglia is confident that the appeal of
these accessories will keep potential customers’ from being swayed by
cheaper rivals.

“As Australia’s appreciation and understanding of high quality Grand
Cru coffees grows, so too has the demand for our premium coffee
accessories. Today, coffee is celebrated in much the same as wine.

“It has long been recognised that a well-designed glass enhances the
wine tasting experience and we’re seeing coffee connoisseurs begin to
understand that this experience also extends to coffee tastings.”

On the subject of upcoming release activity, Ciaglia said that after
introducing the new Inissia and Lattissima Pro ranges to the market
during the first half, there are no plans to introduce a third machine
range in 2014. That doesn’t mean the team is taking a coffee break,
however, with the focus now firmly on coffee blends and flavours.
Ciaglia confirmed that there will be several new releases to keep
existing customers happy and encourage new ones to make their first
purchase.

“Coffee is at the heart of what we do and for the second half of the year our focus will be just that. Last week, we introduced a new limited edition coffee, Cubanía,
inspired by Cuba’s iconic coffee traditions and Club Members throughout
the country have been visiting our Boutiques to sample it.

“Next month we will release a very precious, rare and short-run
Special Reserve coffee. Then, just before Christmas, we will launch the
highly anticipated Variations that our Club Members voted for in June of
this year.”

Variations is the name given to Nespresso flavours that incorporate a particular aroma or non-coffee flavour infusion. In the past, there have been raspberry, chocolate and caramel Variations.

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