Kraen Østergård Nielsen, chief technology officer with Coop Denmark, tells Paul Skeldon about the retailer’s innovative approach to understanding its customers
The words “Understanding the customer” ring in every retailer’s ears, as store chains grapple with changing consumer habits and how to adapt to them. Yet few go as far as sending their staff to live with their customers.
But this is the radical approach adopted by Denmark’s largest retailer of consumer goods, Coop Denmark, which sent its chief technology officer, Kraen Østergård Nielsen, to live with a family of Coop customers in Denmark
Nielsen lived, shopped and cooked with a local family, together with an anthropologist, and used the experience to talk about the daily problems and challenges the family faced as consumers when trying to use all the technology available to them in online and mobile retailing.
Nielsen was just one Coop Denmark staffer to go native. In order to better understand their customers, many staff spent time living with 28 different families in the suburbs of Denmark. “It’s been claimed by others that this type of research was quite revolutionary, but to us it was common sense,” says Nielsen. “To understand our customers, we have to talk to them and see what their lives are like.”
Following his time spent living with the family, Nielsen has a new understanding of their customers and the technology required to engage with them today. “We relate to our customers in a very different way now, they’re not only numbers on a spreadsheet,” he says.
A bigger picture
As well as the retailer’s unusually direct and immersive method of customer research, it also employed advanced software to understand customers’ product preferences, purchasing histories, preferred channels and how they interact with different promotions, to form a complete picture.
Those customers that took part in the live-in research expressed a requirement for relevance and convenience. Nielsen stresses that convenience very much drives the decisions behind the company’s innovations, providing customers with various options to browse Coop’s stores, receive promotions and pay.
A key outcome of the research was Coop Denmark’s mobile loyalty app, which was launched across the entire chain of 1,200 stores in October 2016. The app has enabled the retailer to provide fulfilment, convenience and personalisation at every touchpoint, in order to meet their customers’ fast-changing requirements. The app has steadily grown in popularity, enticing customers with inspirational recipes and cookery videos.
Out of the 1.7m members of Coop Denmark, those who have downloaded the app receive 25 tailored offers and the freedom to pick five bespoke offers, and can use the app’s mobile payment functionality to pay at the register, and see their bonuses grow in real-time.
Built around technology company Omnico’s software solution, omniEngage, the Coop-developed app enables real-time customer bonus point calculations and personalised promotional activity. Discounts are delivered direct to the customer via the mobile solution, which is hosted in the Omnico Cloud.
While many retailers offer a variety of discounted items and promotions, Coop Denmark has taken this one step further by ensuring each of its loyalty schemes is as personalised and localised as possible.
“We use historical purchase data to understand what we need to provide to our customers that is both personal to them and localised to their store,” says Nielsen. “Our store managers, for example, take photos of local produce like fresh strawberries hand-picked from local farmers, and share this directly in the app and on social media with their customers. Shoppers are guaranteed that produce hasn’t been shipped for miles and they build a relationship with their local store manager.”
Linking the real and virtual worlds
The research also revealed how important a seamless experience is to customers, with a need to combine the in-store experience with what is available through the app. To address this, Coop Denmark created an online and offline platform across the entire shopping journey; from choosing recipes, purchasing within the store and gaining loyalty points and rewards, to watching cookery videos at home. The app currently has 8,000 recipes available for customers to browse and view.
This promising start has also encouraged the grocer to trial a mobile self-scan app in seven stores, linking to bonus wallets, promotions and credit/debit functionality. “We are trying to help our customers through their purchase journey; from choosing a recipe, to cooking with fresh, local ingredients,” says Nielsen.
The self-scan app allows payment via an e-wallet and again uses Omnico’s omniBasket software to enable payment at the till via the customer’s device, which is linked directly to the customer’s dividend, bonus wallet, or credit/debit card.
The solution enables customers to scan a product once, then skip the till queue by paying automatically through their device. Electronic e-receipts are then available to the customer in near-real time within the app. “We are very excited and confident in the mobile payment app. It’s a more realistic version of Amazon Go, as it provides the same core benefits, but at much lower costs,” Nielsen states.
To understand future technology trends and test the latest gadgets, Coop Denmark has set up a 100% mobile self-scanning store-of-the-future concept in its head office.
“It’s where we can test funky stuff like robots in stores, to see if they’re compatible with our vision,” explains Nielsen, however, he stresses that the grocer doesn’t innovate for the sake of innovation. “It’s exciting to see cool tech, but what is the customer thinking and what are their real-life problems? Do they need this cool tech to shop better? We don’t focus so much on the gadgets, but more on the customer experience.”
Nielsen reinforces this by explaining that they tackle each customer friction point along the shopping journey to ensure a seamless experience. “The focus is on solving the customer’s problems for them, and ensuring that the customer is always at the centre of their technology, so that it makes the lives they live – without us living with them – much easier,” he says.
