Coolblue is best known for its strong customer centricity. What enables the company to deliver a stellar experience?
Dutch electronics eCommerce webshop Coolblue took over the country by storm through its relentless deduction to customer satisfaction. This philosophy is ingrained across the entire company from its slogan ‘Everything for a smile”, to its nonnegotiable company culture. Coolblue has grown to become one of the largest ecommerce stores in the Netherlands, with no signs of slowing down. How did this small store with its roots in the outer neighborhoods of Rotterdam, grow out to be one of the leading online retail brands in the Netherlands?
Rapid growth at Coolblue
In August 2012, Coolblue was still a small digital player, but behind the scenes it had amassed over €100 million in annual revenue. The company opened its doors in 1999 as mp3man.nl. Operating from the founders’ attic, Pieter Zwart, Paul de Jong and Bart Kuijpers. They opened their second website PDAshop.nl in 2001.
Fast forward to 2012, the store operated 160 webshops, 4 brick and mortar stores and reached €114 million in revenue in 2011. A growth 20 percent the year prior. The company was home to a little over 300 employees, welcoming 180 of them in 2012 alone. Its growth was so rapid in fact, it had to move to a better location to ensure easy access to all of the staff, Zwart told website Marketing Facts.
Zwart explained the company was planning to open another 100 new webshops, noting that it could ride the digital wave from offline to online shopping. In order to cater to this ever expanding audience, it’s diversifying and optimizing its value proposition. By branching out into consumer niches such as tripods, first part of its digicamshop.nl domain, it’s trying to include different purchase moments. Separating them to create tailored offerings.
Despite branching out into over 200 webshops, Zwart noted they were still a long way away from capturing all products available. This large diversification isn’t without its drawbacks, he added. Not all shops had a strong business case, highlighting its body care and its domestic goods websites. Some shops perished as demand fell, such as ultra-mobile PC’s, which got replaced by tablets. Coolblue shut it down.
Culture first
In March 2017, Adformatie spoke with Pieter Zwart about the company philosophy. Zwart explained that its culture is deeply ingrained within the company, stretching across four axes, proudly described on its website, the first pillar of its operating culture. Clearly communicating the values of the organization wherever possible. At Coolblue there’s no room for fancy jargon or fancy titles.
Secondly, managers are the embodiment of strong leadership. Examples for the rest of the employees. Coolblue strictly safeguards its culture, ensuring that improper fits never make it through the door. Lastly, Zwart notes, culture is organic and should be optimized as time goes on. As the years progressed, Zwart is still laser focussed when it comes down to integrating and safeguarding the company culture wherever possible. Its marketing campaigns are home to all pillars of its culture. Induced with humor.
Coolblue tracks customers’ expectations
Coolblue has experienced rapid growth and has built a strong culture around customer satisfaction. But, the enabling factors have been mostly left unanswered in the general interviews we’ve covered up to now. In May 2018, trade magazine Customerfirst spoke with Pieter about how the company had won The Most Customer Friendly Company in the Netherlands two years in a row. Only company in the awards history was able to pull it off. Zwart explained that the essence of customer satisfaction is very methodical.
You have to constantly track the customer’s expectations, mapping what the customer is expecting and how they experienced it, he detailed. This is communicated to all layers of the company, down to the person who is responsible for collecting and packaging the products. Zwart highlights that when everything is aware of their contribution to delivering an excellent customer experience, magical things start to happen.
However, implementing such a robust system isn’t easy. Hence, only few are able to replicate it. Integrating strong customer centricity can be challenging within existing organizations. Business leaders should learn what shareholders are looking for. Customer satisfaction lives alongside the financial performance of the company, Zwart notes. This is where managers should start when looking to allocate resources to build customer satisfaction.
Furthermore, company culture needs to be re-imagined. Changing company culture however can be a daunting process. It requires radical change. Employees will have to be trained and convinced that this is the next chapter for the company. To successfully make this transition, customer behavior will have to be analyzed thoroughly. Zwart highlights this requires many feedback loops to understand how a strong customer experience can be delivered.
As with many things related to the customer experience and marketing, they don’t exist in a vacuum. While internal data can point toward optimizations, the expectations of customers are shaped by external factors. Zwart points toward delivery times. A decade ago, delivering a washing machine the next day was unimaginable. Today, he says, this has become the norm. This means logistical processes will have to be adjusted to meet customer’s demands.
Operational excellence lies at the heart of meeting the customers’ needs. However, while a company can strive to deliver operational excellence, no organization is immune to errors. Problems will slip through. These have to be handled accordingly. Coolblue agents are emphatic and serve as the first feedback loop for customer experience optimization. During these customer interactions, valuable information is collected. Coolblue learns where along the chain a problem arose for the customer, what the customer expected and how the situation could’ve been prevented.
Call mitigation
As customer service agents become more knowledgeable, Coolblue encourages them to grow and move within the company, ensuring that customer experiences find their way to all layers of the organization. Further reinforcing the culture of delivering a smooth customer service. This doesn’t mean that Coolblue is encouraging customers to pick up the phone of every minor incident. Zwart commented that the company is actively looking to reduce incoming calls.
He admitted that the call reduction has a negative connotation. However, these interactions are problems that could’ve been prevented. The questions that remain will become more complex. Despite this development, Zwart believes that chatbots will take over greater parts of customer interactions. Noting that every customer interaction is a dialogue. Dialogues that aren’t original over time, hence an opportunity for chatbots to step in and solve problems.
One of such call mitigation efforts has been the launch of its mobile app in August 2017. The dedicated Coolblue app allowed customers to order products, track them and view their purchase history. The app serves as an easy entry-point to what was already present on the website and will enjoy regular updates as times progresses.
Customer personalization
Simultaneously Coolblue has been working on customer personalization, helping to create a tailored experience for its customers. In May 2015, Emerce spoke with Coolblue CMO Wouter Blok, who previously worked as an advertising consultant at Google, and the steps the company has been taking to build its brand. The interview took place three years before Coolblue would take the step to unify its online webshops under one single brand umbrella.
Blok explained that purchases made at Coolblue fell into the high-interest category, meaning the customers need to be informed properly and guided through the selection process. Coolblue creates product videos that help explain and demonstrate the product. Adding that the company is constantly trying to better understand its customers to tailor its communication efforts and ensure all are aligned in order to be served at the right time.
Blok highlighted its customer satisfaction survey, the personal cards and separate, dedicated webshops. The marketing team is also in close contact with the different departments when running campaigns, ensuring that all teams are aligned, from its customer service representatives, its warehouse staff to the suppliers. This is a stark difference from the previous companies he added.
Customer personalization has been made possible through Google’s Cloud solutions, which enabled the company to accelerate analytics processing through real-time data streaming, helping to gain faster insights to meet customer needs. Coolblue BI Technical Lead, Robert Saxby, explained that the company was outgrowing its current BI infrastructure, with the team having to search for a solution that could handle the vast amounts of data that was coming in.
Coolblue had built its platform around an on-premises SQL Server, which used SSIS and Python for ETL, Hadoop on AWS and a server dedicated for R to run queries for the data science team. This complicated setup meant Coolblue was forced to run its data through multiple systems and transform into usable sets. The e-commerce store started a trial with Google BigQuery and Google Analytics Premium, which was implemented in cooperation with service partner Datatonic.
The systems were optimized through Cloud Dataflow to add additional data processing capacity, allowing for support for data-driven features, Google highlighted. Google Cloud meanwhile can run alongside adblockers, able to capture the necessary data to deliver a personalized shopping experience. A desire mentioned by Blok during the Emerce interview.
It’s easy to underestimate how valuable these systems are from an outside perspective. They are riddled in technicalities, but optimizing data streams allows for greater efficiency and error detection. It also enables business leaders to request the necessary data that enables them to drive growth or, within this article, find issues that deteriorate the customer experience. Later we will learn that through software and hardware optimization, the development team at Coolblue could rapidly improve its platform.
AI at Coolblue
Fast forward almost a decade later, Coolblue ventured into artificial intelligence. In November 2023, Coolblue launched its virtual AI-assistant Piet, which would be available till the 5th of December 2023. Customers could use the tool as a means to generate poems for their loved ones, which would accompany the gifts on the evening of Saint Nicholas. A popular festive period in the Netherlands. On launch day, 13,000 customers used the AI-assistant.
The launch of AI-assistant Piet was intended as a playful way to generate more awareness around the chatGPT hype. But we can frame this as an extension to Zwart’s firm belief that chatbots will handle more of the incoming customer requests over time. The temporary launch of chatbot Piet was an important learning experience for the team, serving as an important benchmark for further development.
Supply chain optimization
An important aspect that enables Coolblue to excel in delivering a reliable customer service, has been optimizing its supply chain operations. In September 2021, Coolblue partnered with hybrid warehouse automation solutions provider Inther Group to streamline its package returns operations. Both parties have expressed they would take an holistic approach. Coolblue deemed it necessary to re-evaluate its package turn operations after it experienced strong growth, leading to a surge in returns.
This put additional stress on its existing infrastructure. Hence, it reached out to Inther Group to optimize this segment of its supply chain. CEO at Inther Group, Martijn Herder, explained to Supply Chain Magazine, that through the unique holistic approach, Coolbue and Inther Group can deliver a unique approach which will see significant improvements in an otherwise chaotic process. Supply Chain Magazine detailed that returns can arrive at Coolblue for a multitude of reasons, each requiring a different processing approach.
Through Inther Group’s Conveyor solution, Coolblue will be able to automatically separate the incoming returns and assign them to the appropriate department for further processing. The approximately 100 sorting stations will be linked to a shuttle system that will distribute the packages throughout the warehouse. Supply Chain Magazine noted that the Inther Conveyor Equipment solution can handle large quantities of incoming returns thanks to its three size container options.
In April 2022, Coolblue acquired delivery management software company Plotwise. Plotwise has been a spin-off project from the Technical University of Delft, intended to optimize distribution flows. The software examines logistical patterns which are fed through an algorithm to optimize deliveries.
Coolblue intends to integrate Plotwise’s solution to expand and improve its bike delivery network. The existing network already takes up 90 percent of all large city deliveries. Through the undisclosed acquisition, Plotwise will receive new additional funds to accelerate its expansion across Belgium and Germany.
Platform development
Coolblue is a technology company at its core, connecting consumers with their purchase. All interlinked through a complex digital web. In August 2017, Emerce magazine spoke with head of development Anneke Keller and her department’s drive to optimize the buying experience. A core asset that enables Coolblue to streamline its processes, is having ownership of parts of the supply. They own their own warehouses, where its employees package the orders. Larger items are being delivered through its own trucks.
All these separate parts are connected by software and hardware that are developed inhouse. Keller points out that Coolblue is the outlier in the world of ecommerce when it comes down to owning its own supply chain. This operational framework allows internal teams to tinker with all parts of its logistical process, instead of being locked in by limitations from third party suppliers. A problem that many growing companies will run into as the complexity of their operations increases.
The, at the time, two hundred developers at Coolblue, were divided into separate scrum teams comprising around 8 to 10 employees. Keller says that the agile team collaboration framework Scrum forms the head of the development department. All software is developed in sprints with a strict two week deadline. As Coolblue owns its infrastructure, it can employ continuous deployment. All software that is deemed finished, is immediately released, she added.
Through continuous deployment, the development team can push multiple releases a day. By employing these frameworks its procurement teams can already use optimizations and toolings a week later. If procurement staff encounter issues, they can raise their concerns which can be solved during a two week sprint.
The enabling factor that allows teams to quickly cycle through new iterations and deploy new solutions quickly, is its company culture, Keller highlights. A repeating theme across all Coolblue communications. Employees are allowed to make mistakes. If they learn from their mistakes. We must however take this with a grain of salt, as few executives will admit their employees have been relieved of their duties after making mistakes.
Simplifying the buying experience
In June 2018, Coolblue announced perhaps one of its biggest leaps in improving the customer experience, bundling all its separate domains to its own main domain. During its founding years this seemed a logical step to expand into different product categories. Now, its over 300 separate webshops have become a multiheaded, tough to manage beast. The project took over two years, with Zwart already stated in 2016 that he wanted to declutter its online storefront.
Combining the separate domains would bring massive efficiencies to its internal organization. Development teams could now more easily automate processes and push for new features and optimizations. Employing a one-domain strategy would rid the company of the many constraints that come with a cluttered webshop landscape. Coolblue also deemed the timing right, as its brand had grown strong enough to withstand such a massive operation.
All the previous efforts and strong dedication to create a strong framework that enables strong customer service, resulted in the company becoming the most customer friendly organizations in the Netherlands in 2020, according to independent research from market researcher MarketResponse. The survey includes every major company, who cannot apply for the program nor can their customers vote for their favorite brands.
Misleading claims
Despite all the fanfare surrounding Coolblue’s relentless drive to deliver a smile to each customer’s face, it hasn’t been without its faults. Primarily in its marketing communications, where it was warned to stop using misleading promises. In May 2023, the self-regulatory organization of advertising in The Netherlands, The Stichting Reclame Code (SRC), warned Coolblue about its next day delivery claims, which were considered to be too absolute.
The SRC noted that Coolblue cannot always promise next day delivery, which can be caused by force majeure or due to holidays. Coolblue failed to communicate these potential shortcomings in the supply chain, giving the impression that the company will deliver a package no matter the circumstance. The SRC noted that this could lead to consumers picking Coolblue over competitors. A false claim, in the eyes of the regulatory body.
This is the first time the SRC had warned Coolblue regarding its dubious communication practices, urging the webshop to refrain from making such bold statements. The company failed to adhere to this recommendation, forcing the SRC to take decisive action, posting a public alert to consumers about the misleading claims.
The desire to please customers wherever possible, seeps through into high work pressure amongst employees. While the data on this issue is scarce to wholly backup, they exist, with remarks from employees ranging from doable to unable to take a break due to poor scheduling. During peak seasons, such as Black Friday, Head of Customer Service, Kay Dieke commented, that office staff works alongside its retail, warehouse and customer service employees to handle all incoming orders and questions.
Seamless integration
The founders of Coolblue always believed from the start that customer satisfaction should be deeply ingrained in the company culture. Its CEO Pieter Zwart keeps repeating the importance of culture at Coolblue and the foundational role it plays in delivering a strong customer experience. This belief seeps through into every aspect of the company.
Customers receive complete control over their orders through the dedicated mobile app, which is continuously expanded by its development team. Coolblue owns all its infrastructure, from the warehouse to the delivery, which might be the most important ingredient that enables the ecommerce store to deliver stellar customer service. It can optimize every aspect of the supply chain. Integrate software that smooths the order and sorting process.
While many companies will look to emulate Coolblue’s strategy, it won’t come easy. Little have the resources to own and operate their own warehouses. Employing a large team of customer service representatives is equally difficult. However, there are nuggets of wisdom to be found. May it be from enabling customers to track their order at any time or making the customer service department leading in problem detection.
