How Nespresso is revamping its stores to market itself as a premium coffee brand

“We, first and foremost, are a coffee brand,” said Jessica Padula, Nespresso’s vp of marketing. She joined the Modern Retail Podcast and spoke about the brand’s growth plans in the U.S.

Nespresso has had retail locations for years. But the brand — best known for its pod-based coffee brewing system — has always tinkered with the model, testing out new markets and concepts while sunsetting others. According to Padula, the focus of Nespresso’s new retail projects is to showcase the brand’s coffee prowess.

“You want to go a level deeper,” she said.

For example, some locations have begun offering master classes to teach customers about the origin of some coffees. The hope is to make the coffee and its quality top of mind, according to Padula. “Sometimes, since the machine is what you lead with, that often gets in the way,” she said.

With this, Nespresso is testing out new types of retail concepts and looking into new locations. This includes updates to major markets.

“Newness in New York is definitely coming,” Padula said.

Here are a few highlights from the conversation, which have been lightly edited for clarity.

Focusing on growing purchase intent
“We are still in household penetration build mode. We are really solid in terms of awareness. We’ve hit the metrics we needed to over the first five or so years… But then, of course, as you hit sort of your thresholds on awareness, you’re needing to look further down the purchase journey and [say], ‘OK, but what’s going to kind of hold us back from making our sales goals?’ Or, ‘What do we need to unlock in order to get to that growth trajectory?’ And that’s really been more in that mid-funnel consideration [area] — are customers familiar with not just, of course, accepting that we are the best, most premium, luxurious, great tasting, consistent [coffee brand], but, like, what’s going to really drive [them] to make that purchase? Not just the one-time machine purchase, but keep coming back to us. And that’s really where we’ve been focused.”

How the retail stores have evolved
“We do a lot of really interesting things at the boutique. First of all, we’ve always offered free samples. Come in and taste our coffee because, of course, tasting is believing. But you want to go a level deeper with customers. They’re not just coming in for a free shot of espresso and leaving, ideally, right? They’re learning something about the brand in service of this consideration and purchase intent. So we started doing master classes, which are really fun and different — and they’re educational. They’re [about] how might you learn a little bit more about who an espresso is, how we source our coffee. We want to be known — and we are truly a coffee brand — but sometimes, since the machine is what you lead with, that often gets in the way. And so: How might the boutiques actually reestablish that we, first and foremost, are a coffee brand?”

The near-term focuses
“Newness in New York is definitely coming. We’ve got a really thorough plan to ensure that we can take care of those customers from our Soho boutique, but also be a really meaningful retail destination in New York City for local, international, domestic travelers. I really think Nespresso wants to — and should be — on your list, if you’re coming to New York, of cool places to go. So that’s our vision and intention. And I mean [expect] more in the cold coffee space. How can we make cold coffee [and] travel be ownable for Nespresso? it’s really something we’re very good at, and people don’t know it really yet. And so [the focuses are to be] more connected to retail, connected to broader marketing, how cold coffee can truly become part of our core brand DNA.”