21 July 2023
Coop Denmark – Nudging the Consumer Towards More Climate-friendly Purchases
I love when I discover a company actively leveraging its knowledge of its customers to meet their needs better, contribute to a better world AND improve the bottom line! This is what Denmark’s Coop has been doing, and there is a lot that other retailers can emulate here.
Each and every week some 5 million Danes shop in the 1000 plus Coop DK stores. They control a third of the grocery market and they have set out to use their clout both with customers and suppliers to make Denmark more sustainable. Coop DK’s research says “74 percent of customers have told us they wish to have more guidance towards climate-friendly shopping choices,” and Coop DK have set out to meet this wish.
In 2020 they launched their free carbon footprint app that allows shoppers to track their carbon footprint when shopping. By signing up for the app and using their membership card at checkout shoppers can see, on the app, the carbon footprint of each individual item purchased. The app will also make suggestions (such as using potatoes instead of rice as the carbon footprint of potatoes is 4 times less than that of rice). The app also allows shoppers to compare their footprint with the average customers. Coop DK has generously made the workings of the app available to other retailers free of charge.
They have not let their laurels rest there. Working with behavioural science experts Krukow Behavioural Design, Coop DK have been testing store concepts that help to nudge consumers to make more sustainable decisions as they are shopping. In a test store they have created a ‘climate journey’ with low carbon food choices in the early part of the store visit and ending with higher carbon food choices. They have placed clearly labeled low carbon foot alternatives near popular products such as bananas, and more than two thousand of the most climate friendly products in each product category are clearly highlighted. In total Coop DK and Krukow designed 94 different behavioral interventions.
This wasn’t just about helping the customer make more climate friendly choices – it was also about the bottom line as in many cases lower-carbon food choices are actually higher-margin products. Coop DK give the example that carrots have a higher contribution margin than beef; as does chicken.
Coop DK’s Head of Climate Jonas Engberg presented the results of this store test at a recent Sustainable Brands conference in Minneapolis. The results are very encouraging. After 6 months six months they had achieved a 14% reduction in the overall climate impact of shopping choices. They were selling 50% more salad, had seen a reduction in red meat sales as well as the 67% reduction in food waste. And …. they have done this profitably – with the test store turnover, profit and earnings improving during the test.
There was a massive increase in customer awareness with 65% of customers saying that they were being effectively guided to climate friendly food choice versus 7% before the test. The staff were also trained and became passionate and well-informed advocates of more climate positive changes.
Coop DK are now working on scaling this learning.
It’s not just their customers they are targeting. They have recognized the considerable climate impact of the supply chain stemming from the production of the foods they sell, and have set out to tackle this. They have recently released a new set of climate related requirements for all its major food suppliers. They are the first grocery company in Denmark to have their climate action plan approved by the international science based targets initiative (SBTi) .
COOP DK are certainly a retailer to watch.