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Annual report 2013

For the benefit of customers

Kesko and K-stores want to make customers’ lives easier, providing them with high-quality services and products that promote wellbeing and offer guidance on how they should be used.

The fast development of digital services enables customers to shop and receive goods via many channels irrespective of time and place. The customer can choose whether to shop for groceries in a retail store or online, whether to fill the shopping basket in a store, pick up the items from a store yard on the way home or have them delivered directly to the home in the evening.

K-food stores’ own online stores use the click&collect service and/or home deliveries. At the end of February 2015, K-food stores had 14 online stores for groceries. The objective is to have 40 more K-food stores providing the service over the course of 2015.

The click&collect service was introduced in building and home improvement stores in 2014. Over the course of 2015, the service will be extended to include B2B customers and home deliveries.

Read more about food stores’ and building and home improvement stores’ click&collect service.

Both price and quality are important

The drop in purchasing power is reflected in consumers’ choices and price competition is intense in all product lines. In Finland, price competition in food retailing increased in late 2014 and early 2015.

In its 2014 study on Finnish grocery buyers, TNS Gallup asked customers what is the most important selection criterion for them when choosing where to shop. The research showed that the wishes of Finnish consumers are not only related to low prices of individual products. According to the study, the most important factors are location, ease of access to the store and ease of navigation within the store. Customers think that food should be both low-priced and high-quality. Based on this message from consumers, the K-Group has permanently reduced the prices of 400 products.

In early 2015, Kesko commented that price competition must not have an adverse effect on the quality of Finnish food or the vitality of Finnish food production and industry. The K-Group aims to ensure the wellbeing of the entire food chain and take responsibility for food from field to fork.

In February 2015, Kesko and K-stores launched a campaign to provide healthy, high-quality meals developed and tested by specialists that will feed a family of four for less than 10 euros. More corresponding discussion about the price and quality of food will be seen over the course of 2015.

Healthy living through proper food and physical exercise

Promoting healthy living and eating habits and physical exercise are key focuses for the K-Group's food and sports stores.

The nutritional contents of about 5,400 recipes on K-ruoka.fi’s recipe service have been calculated to help customers in their choices. In 2014, home economics teachers of the K-test kitchen developed more than 400 new recipes, which were published on K-ruoka.fi, in the Pirkka magazine and on the K-RuokaPirkka leaflet.

K-food stores have been training K-food specialists − experts in nutrition and special diets − for five years. By the end of 2014, a total of 765 employees had completed this training.

In the development of the K-Group’s own brands, special attention is paid to the healthiness of the products. In recent years, sugar, saturated fat and salt have been reduced from Pirkka products that contained high levels of them. This has been done for nearly 160 Pirkka products. The health aspects of new Pirkka products are taken into account already at the product development stage.

The first customer programme entitled Keveämpi arki (Lighter on weekdays) was available on the K-ruoka.fi website at the beginning of January 2015. The programme consisted of recipes and tips for nine days to promote healthy life and wellbeing. The success exceeded all expectations and more than 22,000 customers registered for the programme.

In Intersport's Sport to the People concept, sport has something for everyone, regardless of age and level of interest. At least twice a year, every Intersport store organises a physical activity event, the aim of which is to promote a healthy lifestyle and encourage customers to be physically active.

Read more: Salad bars are popular

High-quality own brands

Kesko’s own Pirkka range combines high quality and low prices. Finnish products are always preferred when selecting items to add to the range, provided that the product meets the quality and price criteria. At the end of 2014, there were 2,324 products in the Pirkka range.

K-Menu, the K-food stores’ new own brand, which was launched in spring 2014, is priced to be the most affordable brand in the market. At the end of 2014, there were 99 K-Menu products.

The Cello family of more than 2,000 products is a versatile product range for interior decoration and home improvement purposes and is sold by K-rauta and Rautia stores. Other own brands include PROF and FXA. 

 

Did you know?

Digital technology makes it possible to provide services wherever customers need them. In February 2015, K-market Neulamuikku opened an online store for the people working in the Technopolis business park in Kuopio. The customer can place an order on the online store and a Post vehicle will bring the items to the entrance hall of the building before the end of the working day.
 

Information about products for customers

Consumers are interested in the origins and properties of the products they buy. Openness in the production chain is important, so that consumers can rely on product contents and package labelling.

Kesko Food’s Consumer Service offers customers many kinds of information: in addition to giving feedback on products, customers ask about product origins, ingredients, their suitability for different users, and instructions for use and cooking. Customers can contact the Consumer Service to inquire about the country of origin of any ingredient of any Pirkka product. In 2014, the Consumer Service was contacted more than 20,900 times.

Information about good products and responsible actions is given in stores and marketing with the help of the K-responsibility concept and its slogan ‘Let’s do good. Together.’ The aim is to help and encourage customers to make responsible choices. The K-responsibility concept used by K-food stores was adopted by the K-Group’s building and home improvement stores in Finland during 2014.

Read more about responsibility in building and home improvement stores.

During 2014, Kesko Food had an extensive modification of the package labelling of its own brand products based on the EU Regulation on the provision of food information to consumers. In the future, packaging will provide consumers with more information on products’ nutrition content, ingredients and possible allergens, for instance. Changes will continue until spring 2015, when the transition period of the EU regulation laying down rules for the indication of country of origin for certain meats will end.

More individual marketing

The K-Group’s customer loyalty programme, K-Plussa, provides K-Plussa customers with benefits from more than 3,000 places of purchase and over 40 partners. K-Plussa operates at three levels: the customer gets both store-specific and chain-specific benefits as well as joint benefits of the K-Plussa network. More than 3.6 million people in more than 2.3 million households have a K-Plussa card.

The use of customer information and the chains’ customer programmes play a key role in the business planning of Kesko and K-stores. The aim is to improve customer satisfaction and increase sales.

In 2014, Kesko introduced a new campaign management tool, for targeted and individual customer communications. The aim is to gradually launch personalised customer relationship marketing more extensively in the K-Group.

Targeted marketing with the help of customer information will increase. Personalised marketing based on the customers’ shopping history provides customers with benefits that are more suitable for each individual. After shopping, customers may, for example, receive service messages, customer inquiries or individual offers via the channel they have chosen.

To receive individually tailored benefits, the customer must give permission for e-mail marketing and a product-specific review of purchases, and the customer must have shopped at the store in question. Individual and personalised benefits have been well received by customers.


ADDRESS: ONLINE STORES MAKE EVERYDAY LIFE EASIER FOR FAMILIES

 

"I mainly buy clothes and shoes online, both for children and myself. The major reason I shop online is the ease of the process. I can take a look at the selection wherever and whenever I choose and it is easy to compare prices between different stores. The goods are delivered to my local post office, store or home, all of which are good options for me.

I think a good online store is intuitive, informative and active. It is easy to use and provides all the information that customers may need on products, deliveries and prices. The selection and special offers change often, the store listens to its customers and is fast to react to their wishes. Free deliveries and returns are also a plus: they make it easy to try a new store.

In my opinion, customer-oriented marketing is a good thing. I don’t want to receive email advertising that does not concern me. Instead, I welcome targeted messages with products and special offers intended just for me.”

Anna Kurikka lives in Jollas, Helsinki, with her husband and children aged 2 and 5 years.

 

 

CASE: SOCIAL MEDIA HAS AN IMPACT

 

For Kesko, social media provides new opportunities for interaction with consumers. In the spring of 2014, a popular subject on social media was whether, for environmental reasons, retail stores could give up offering thin plastic bags at checkouts. Kesko Food also received feedback from dozens of customers.

The issue was considered from various angles. How would it affect customer service if bags were no longer offered? And how would the decreased use of small bags affect the amount of plastic waste?

”We decided to decrease the active offering of small bags. We want to serve customers well, so we still have bags available at the end of the checkout lines,” says Timo Jäske, Kesko Food’s Sustainability Manager.

Kesko Food estimates that this could reduce the amount of plastic waste generated by about one fifth. In the trading sector, plastic waste is generated during various operations. Kesko Food has done years of work to reduce the amount of plastic waste and achieved good results.