At Tchibo, the combining of premium coffee with the retail purchase experience is an art form that’s been cultivated for more than half a century. It’s also become a concept that’s enabled the brand to extend its scope and reach far beyond its humble beginnings.
Tchibo was founded in Hamburg, Germany, in 1949 (the same year that the Federal Republic of Germany was founded) by two German businessmen, Carl Tchilling-Hiryan and Max Herz. Upon deriving its name from the blending of the words Tchilling and “bohnen”—the latter being the German word for beans—Tchibo set up its own roasting facility in the Hamburg district of Hoheluft and established itself as a mail order company that specialized in freshly roasted coffee beans.
After a few years, Tchibo developed a reputation for providing top class products and service. By 1955, it was also seen as something of an innovator when it opened its first shop complete with a coffee tasting bar next to its roasting plant.
More outlets quickly followed, and by the early 1960’s, Tchibo was blazing the trail with the “shop-in-shop” concept, having opened up a series of mini-stores in bakeries and cake shops. In 1963 it revolutionized the German coffee market when it became the first retailer to offer mild coffee to the general public.
By the 1970’s, Tchibo had established a reputable domestic brand known for quality products and customer service. It was therefore a logical step to extend its brand strength by augmenting its portfolio of coffee with a range of high quality consumer goods that it could sell under the Tchibo name.
While it may have seemed illogical at the time, Tchibo regularly refreshed its product line under the auspices of “a new experience every week.” This bold concept has stayed with Tchibo to this day. And as the brand has grown, so too has its inventory.
Following the 1970’s, Tchibo resisted the temptation to unleash its brand and retailing style on the UK and the US, and instead focused on Poland, Hungary, Slovakia, and Russia. In fact, when Tchibo became one of the first adopters of the e-Commerce concept and started selling both coffee and consumer goods over the Web in 1997, its efforts went largely unnoticed by everyone—especially in the West—except for its traditional stakeholders.
Time, as they say, changes everything. At the turn of the millennium Tchibo opened its first UK shop in London before teaming up with two of the country’s major supermarket chains, Sainsbury's and Somerfield, thus developing a presence nationwide. As a result, Tchibo now both fascinates and bemuses a consumer demographic that on the one hand looks to embrace Europe’s café society, while on the other fiercely retains its national identity by refusing to adopt the European Union’s network of currency.
Perhaps many would argue that Tchibo should have followed another German retailer, Aldi, which penetrated the UK market sooner. According to a number of Internet shopping review boards such as Ciao and Dooyoo, many of Tchibo’s UK consumers are still struggling with just exactly what it is that the brand actually stands for.
Maybe things would be different if the Brits were aware that the popular lotion Nivea was actually a Tchibo owned brand, or perhaps if the company had directed a bit more of the US$ 860 million it spent on advertising in 2006 towards British shores. Notwithstanding these points, Tchibo now has around 40,000 outlets in Germany and is the country's second-largest provider of consumer goods; so, it's unlikely that the company's brand awareness strategy is a problem.
To further illustrate Tchibo's brand strength, the behemoth has a finger in almost every conceivable pie, from the provision of personal pensions to the supply of mobile phone plans. It also offers a cast iron three-year guarantee on its goods, and sells at a range of price-points that scare most mainstream retailers.
The business is web savvy too, and uses Tchibo.com to engage would-be shoppers with a range of contemporary and country focused sites that allow customers to buy online. It’s also registered its affiliate programs with Zanox and Affiliate Future in order to drive more traffic to its portals and build its market share.
Put all of this together in an environment that’s kept fresh, thanks to a perpetually revolving product range and passion for service, and it’s as plain as the froth on your latte that Tchibo is in for the long haul.
In Germany it seems as if there is no end to what the Tchibo brand can achieve. However, in the more conservative markets such as the UK, the emphasis remains on establishing the Tchibo brand. This is a challenge in a demographic that has historically been averse to the greater European culture. If the business is successful, however, then the next stop could well be on the other side of the Atlantic—and who knows what the average American and a certain Seattle-based coffee company would possibly make of that.