Tuesday, 3 January 2023

RETROWURST: Tchibo January 2005


What tickles me about some of the Retrowurst articles that I unearth is the sheer sense of glee I evidently had in writing them. Take the following article, written in January 2005, when I was clearly in thrall to Tchibo, if not completely enchanted by the brand. “Starbucks meets Innovations!” - not my words, but that obviously captured my imagination regarding this strangely German institution. No wonder, perhaps - Tchibo at this stage was Germany’s third largest “internet retailer” (how quaint) after Amazon and Ebay. Why, I even believed that Tchibo were aiming at offering mass market trips to the moon.


To start the new year, I thought I’d write a piece on a familiar face on German high streets for 50 years, which has recently also found its feet in the UK (if you’ll excuse the mixed metaphor); Tchibo.


In a retail climate which seems beset by losses, redundancies or desperate attempts at ‘pile it high, sell it cheap and scream about it’, Tchibo is one of the few retailers that are actually doing reasonably well here, along with Aldi and Ikea. This does seem to have something to do with having a good concept and sticking to it but Tchibo’s concept does really seem quite weird at first glance. I saw it described as ‘Starbucks meets Innovations’ on a UK website and I think it really is an example of a concept that has evolved through mutation and adaptation to be successful. That is, it is a concept that would have been strangled at birth had anyone had the audacity to come up with such an idea in the post-war 1949 German version of a brainstorming.


Tchibo is currently a concern with 10,000 employees and 54,000 purchase outlets in Germany. As a retailer, it has 99% awareness in Germany. Tchibo sells not only coffee but also household goods, flowers, mobile phone services, insurance and holidays. You can buy goods and services from Tchibo via their shops, from store-in-store in the supermarket or bakery, via the magazine or mail order or over the internet. Their ambition is to offer the first mass market trips to the moon.


However, none of this happened overnight and one can quite understand the initial wariness of the Dutch, Brits or Poles when confronted with the full-blown Tchibo concept 2005. Tchibo had very a simple and one-dimensional concept at its birth- the company was established by Max Herz and Carl Tchilling-Hiryan in 1949 as a mail-order coffee company. The name Tchibo actually comes from a mix of the name Tchilling with the word for ‘bean’ in German, Bohnen.


The first Tchibo shop opened in Germany in 1955; what was unusual was that people could actually try the coffee before buying. Moving this to its next logical step, Tchibo set up mini-stores in bakeshops in 1963, where people could eat a roll or cake and enjoy a cup of coffee at the same time, not forgetting to buy a pack to take home with them. In the next decade, in 1972, the third ‘prong’ of Tchibo’s concept was introduced; the launch of weekly-changing consumer goods under the TCM brand name. The first goods offered were not a million miles away from coffee, being mainly kitchenware. However, Tchibo gradually branched out into other areas such as home textiles and fashions. By 1996 the mail-order arm was established and Tchibo made its first offers in the holidays and tourism category. In 1997 Tchibo went online and is now Germany’s third largest Internet retailer behind Ebay and Amazon. The late 90s and early 2000s saw Tchibo continuing its international expansion with the first shop opening in the UK in 2000.


Perhaps the biggest clue to Tchibo’s success is to look at its customers. With a consistent promise of change, ‘Jede Woche eine neue Welt’ or ‘A new experience every week’, Tchibo taps into and reconciles one of the biggest paradoxes in our lives- the need for stability and consistency and the need for change and newness. The result of this strategy means that many customers simply become Tchibo junkies. Tchibo is like a drug, complete with withdrawal symptoms if one ‘misses’ what’s on this week. According to the market research company Icon, 42% of Tchibo’s customers are ‘Tchibo lovers’ or the extreme loyal. Even Ikea with its cult following and over 30 years in Germany can only boast 23% of its customers being ‘Ikea lovers’, according to Icon. On a consumer forum recently, a 23-year-old woman and self-confessed Tchibo-junkie admitted to being so impressed with an ‘Italian eating’ week at Tchibo that she immediately wanted to buy the full range of products on offer. Finding this a bit embarrassing, she bought half of the items at one Tchibo shop in the morning and the remaining half in another branch that afternoon!


What factors have made Tchibo so successful, apart from the consistent inconsistency (!) of its product range? First and foremost, Tchibo is part of German history which imbues the brand with trustworthiness, loyalty and a feeling that ‘you can’t go wrong’. This history is reinforced by the logo and colour scheme of a steaming coffee bean in gold and dark blue which acts as a positive emotional anchor, literally sending a warming glow straight to many (23m households) German’s hearts. For many Germans, Tchibo’s advertising campaign from the 60s and 70s, featuring the same actor throughout on a quest for quality coffee on behalf of the people remains fresh in their minds.


Tchibo also has a role in making life easy for people. Arranging the consumer goods by themes rather than categories and offering only one choice per item (or, in the case of clothing, only one colour and a limited range of sizes) takes much of the time and uncertainty out of shopping. One assumes that Tchibo has done the work and research to select the best asparagus steamer; if camel is not my colour then I need look no further at the cashmere sweater on offer- take it or leave it; everything is simple. Another element to take it or leave it is ‘take it now’ as it is almost guaranteed not to be there next time I look; with the weekly turnover of offers and a new theme each week, Tchibo thrives on impulse purchase. Tchibo also has a pretty good knack of choosing themes and items that hit the tastes of the early majority. Tchibo send their scouts to ‘where it’s at’ - Tokyo for electronics, Milan for fashions or Canada for skiwear to check the pulse of the market. They are generally very good at gauging what’s about to be hot for the middle-market; some classic successes in Germany are the asparagus steamer, which appears every two years and one-offs like the ‘Jan-Ulrich bike’; a specialist bicycle for only €399 which led to mass-hysteria in the Tchibo stores. Of course there are flops too; in Autumn 2003, Tchibo tried to sell 1000 special-edition Fiat Stilos but this went down like a cup of cold coffee. A flop on a similar scale was a planned ‘Concert Event of the year- The three Divas’, featuring Whitney Houston, Natalie Cole and Dionne Warwick. Instead of the 200000 planned, the audience was a mere 45000.


The factor that perhaps best encapsulates Tchibo’s success is another paradox. Despite their size (and it is well-known that they now hold a majority stake in Beiersdorf and have their eyes set on ownership, although this is played down in public), Tchibo still gives the German public the impression of a small, local concern. This impression is partly derived from the ubiquity on the one hand but small size on the other of their outlets and from the limited at any point in time but rapidly changing product range. Tchibo are well-aware that others are hot on their heels with their own version of some of these success elements; Aldi for one have started ‘theming’ their weekly offers, be it ‘riding’ or ‘back to school’ and Aldi products are even more reasonably priced than Tchibo, although there is never a cup of coffee thrown in!


Eighteen years later, Tchibo still operate on the “simultaneous need for consistency and novelty” principle, but in my eyes they need to dial up the “novelty” part of that. Too many others have latched onto the same formula. While I guess they haven’t actually drowned in the great digital transformation wave, I do feel Tchibo is stagnating, stuck in the doldrums, which is apparent from the sales figures which have declined since the glory days of the early 2000s. 

Every week, with reliable tedium, there’s a “new” world of loungewear, or yogawear, or mindfulness wear, all in drab shades of dirty rose, dull green and faded apricot. Even the promise of a loungesuit with cashmere for €208.95 isn’t tempting. 

Come on, Tchibo - where are those dreams of the moon? Or are you just past it.

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