Becoming a member-centric lifecycle brand: The Co-op's omni-channel transformation

Transformational change aimed at putting the focus back on members and delivering omni-channel products and services is bringing Australian university retailer, The Co-op, back from the brink and generating a series of new business opportunities.

Speaking at the Customer 360 Symposium, The Co-op’s chief commercial officer, Greg Smith, took attendees through the organisation’s three-year journey to date from single-channel and no-profit book retailer, to a “member-centric lifecycle brand” and omni-channel retailer.

Smith said when he started at the now 57-year old co-operative, it maintained a not-for-profit mentality and had lost sight of its vision to generate profits that could be put back into reducing the cost of education for university students across Australia.

In addition, while the organisation had 1.8 million members and is growing at a rate of 100,000 per year, it had no CRM system and hadn’t previously engaged with members via email communications, Smith said.

“Yet we are business that’s all about relationship – students, publisher, stakeholders, and so on,” he said. “The whole reason the business exists is to give back through scholarships and discounts.

“We had been very good at selling textbooks; we were a logistics business. Twice a year we had a massive influx in sales that we catered for. But we weren’t good at customer service at all. We didn’t know how to embrace that relationship and convert post-purchase. At the same time, competitive forces have been coming at us from all directions. We were on a burning platform.

“We also had a limited amount of money left and time. We had to rediscover our customer value proposition and refocus on our customers.”

Read more: The Co-op’s Greg Smith shares his transformation plans

One of the biggest changes that had to occur to make its omni-channel transformation a reality was around staffing, Smith explained. The average tenure of employees at The Co-op was more than 22 years.

“We’re not a not-for-profit but our thinking was, so we’d attracted people like that to the business,” he commented. In some cases, the organisation had to hasten that cultural change and “help some passengers off the bus”, Smith said. Those who wanted to stay have embraced the new strategy and fast-paced change successfully and are “reborn”, he said.

“If you don’t get the right people on-board, transformation is a very difficult thing to do,” Smith said. “What we had to do as a leadership team is go around to every store and embrace them to be part of that journey.”

The Co-op also introduced the ‘FISH!’ motivational methodology to encourage employees to foster the right customer-led behaviours, a program that is particularly vital given the group’s large casual workforce, Smith said.

External partners including Digital Alchemy and First Click have joined the team as well, each bringing in new technologies, processes and skillsets, Smith said.

Customer listening and information discovery exercises have also taken centre stage at The Co-op. One of these identified that students still wanted to talk to staff over the phone, prompting the launch of the retailer’s first call centre last year.

Accessing textbooks digitally is another must for students, so The Co-op introduced ebooks and is planning to launch a new digital network offering powered by an elearning platform, Smith said. This registration-based social app will operate across all types of connected devices and allow users to interact digitally with peers, access course and study guidelines and enhanced content, and share notes and feedback from lecturers.

In addition, The Co-op is building relationships with several big brands to stock products and services to extend the customer lifecycle. To do this, the retailer is capturing and tapping into a wider range of member data and is now predicting what students need based on their reading and behavioural habits, Smith said.

Read more: Omni-channel retail core to customer experience for Aussie brands

One such offering is Comoney, a student-oriented financial product launched in partnership with ME Bank. The Co-op will also shortly launch Comobile mobile phone services based on the Telstra network.

Another emerging initiative is the launch of STA travel shopfronts inside The Co-op stores, which drives traffic and engagement, Smith said. The Co-Op has also introduced five cafes into its stores so far. Each purchase is recorded on a student’s membership card and in the CRM, with that information then used to drive more personalised, trigger-based offerings to members.

Smith said The Co-Op will shortly launched geographic targeting as well using proximity technologies to further tailor communications. All of this has been supported by new branding and updated shopfronts and website design.

“It’s about having a customer-led culture,” Smith said. “We are blindly commercial but also incredibly social.”

Smith said the journey hasn’t been without difficulties and failures. One failure was the launch of a click-and-collect service via QR codes in-store. There are plenty of steps ahead too, he said, such as bringing in a Net Promoter Score system to better understand The Co-op’s customer engagement efforts.

“But we are happier, healthier, our staff are happy and our customers are getting happier,” Smith added.

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