“The secret of change Is to focus all of your energy, not on fighting the old, but on building the new.” This mantra was the essence of Nespresso’s journey of implementing next-day in 80% of their markets. Davide Costella, Supply Chain Project Manager at the HQ in Lausanne, and Thomas Vander Putten, responsible for delivery services in Belgium, spoke about the path towards next-day delivery during the eTail delivery event in Amsterdam: “Even in a big company like ours, you cannot walk into the room and say: Tomorrow, we do next-day delivery!”
Nespresso, part of the Nestlé Group, is headquartered in Lausanne. With Georgy Clooney as an iconic brand ambassador since 2005, the company has grown immensely throughout the past years, now boasting over 12,000 employees, more than 450 boutiques worldwide and 24-hour a day customer service via telephone. However, large shares of Nespresso- orders happen online. Until recently, Nespresso promised a 48-hour maximum delivery, priding itself on the website in ‘delivering 99% of all orders on time’. But in 2014, the company embarked on a major change: offering next-day delivery throughout the entire network.
Davide Costella, who supported 8 markets to manage this transformation, outlines the first steps: “We started an operational diagnostic. How can we reach the goal of next-day delivery with the current operation? We started collecting data about our clients, our sellers, and our warehouse performance. We then ran a what-if-simulation and started challenging our existing network. Part of this was removing inefficiencies in other departments outside of Supply Chain. This can be challenging because you need to step outside of your own boundaries and show other departments that there is room for improvement.” In order to tackle this change management, Costella stresses the importance of raising awareness, give transparency and making the goals clear to all the parties involved.
‘Co-creating with your couriers`
Next to reducing order integration times, the partnerships with carriers have to be adapted to the new needs. Vander Putten: “First, when we presented our list with needs, the carriers were concerned, as for instance opening distribution centres on Sundays would lead to extra costs.” However, Nespresso managed to show its partners the mutual benefits of adopting a more flexible delivery process. The service provider can attract more or different clients, and extra services such as the selection of a certain delivery day by the customer significantly reduces unsuccessful delivery attempts. Co-creating a new system with the couriers in the end led to benefits for both parties.
Evening deliveries more popular than free coffee
In Belgium, evening deliveries are less standard than in the Netherlands. Still, explains Vander Putten, customer research showed a big demand amongst Nespresso clients. However, when the service was implemented, only 18-20% accepted this new option. Subsequently, Nespresso launched a proactive communication campaign, which did not create a peak, but raised acceptance to a stable level of 35%. “The campaign was more successful in terms of conversion than any email campaign involving free coffee,” says Vander Putten.
Secret of success
A journey to implement such change in an organization is not easy- it takes time and energy, admit both men. So what is the secret ingredient for success? According to Davide Costella, a key factor is transparency and ensuring all parties understand what their contribution is in making the customers happier: “Nespresso is ready and committed more than ever to implement this very challenging and fascinating journey in the remaining markets.”
Photo credits: Nespresso media library