Topic | Objective | Progress of objectives 2017 |
Progress of objectives 2016 |
Progress of objectives 2015 |
---|---|---|---|---|
Dialogue with customers |
We constantly engage in dialogue with customers in stores and social medial channels. We conduct surveys on customer satisfaction and brand and utilise customer views in the development of our responsibility work. |
Listening to our customers and utilising feedback are key factors in Kesko’s strategy when it comes to improving customer experience. We offer our customers an easy-to-use digital feedback channel Hymy. Some one million customer contacts happen through Hymy each year. We are testing Kylä, a new type of customer community, to get our customers proactively involved in the development of our operations and services. Read more: Stakeholder perspective. In the spring of 2017, we conducted a qualitative study concerning K Group’s competitive advantage and strong corporate responsibility to find out what responsible and reliable operations of a trading sector company mean to Finnish consumers. We used the findings to further develop our operations. |
||
Consultation services to customers |
We offer our customers multi-channel information on our products and services. |
In September, K-Rauta launched in Finland the Remonttineuvonta renovation consultation service, an example of a multichannel advice service for customers. K Consumer Service responds to consumer feedback concerning the own brand products (Pirkka, K-Menu, Euro Shopper) and own imports of the grocery trade division. In 2017, K Consumer Service gave 22,218 responses. Our key customer communication channels are K Group’s social media channels and Pirkka Media, which comprises Pirkka magazine and the digital channels Pirkka.fi and Pirkka’s Facebook, Twitter and Instagram. Pirkka magazine has a readership of 1.7 million (Kansallinen Mediatutkimus, a national media survey, autumn 2016 / spring 2017). |
||
Welfare |
We offer products and services that promote health and wellbeing. |
In 2017, we began work to build a new health and wellbeing store chain Hehku together with the pharmaceutical distributor Oriola. Our goal is to establish a chain of 100 Hehku stores and an online store. If legislation changes, we will expand the business to also include the sale of pharmaceuticals. The first Hehku stores opened in January-February 2018. We joined the National Nutrition Council of Finland’s nutrition commitment by making a vegetable commitment, which encourages K-food store customers to increase their use of vegetables through the following actions, which extend to year 2020: |
||
We help our customers make sustainable choices. |
In accordance with our plastics policy, we create operating models that prevent plastics from ending up in water bodies and elsewhere in the environment. We strive to increase awareness of the environmental impacts of plastic waste through active communications in customer channels and at our stores. In 2017, we removed environmentally harmful microbeads from all our own brand cosmetic products. During 2018, microplastics will also be removed from all our own brand detergents. The Pirkka ESSI circular economy bags were introduced to K-food stores' shopping bag selections at the start of 2017. The bags are made of over 90% recycled materials, around half of which is plastic packaging separately collected from households. In 2017, we took part in the second Ham Trick campaign, where roasted ham fat is used to produce renewable diesel. K-Citymarkets collected fat from 117,000 households, i.e. 81% of the total fat collected in the campaign. We introduced two products in 2017 that reduce the environmental load on the Baltic Sea: the Pirkka fish patty, which is made from Baltic bream, and the Pirkka Parhaat Benella Rainbow Trout, which is farmed in Finland with feed made from Baltic herring and sprat from the Baltic Sea. |
|||
Digital services |
We offer the best digital services to K Group customers in all divisions. |
We utilise artificial intelligence for product and content recommendations in our services, and are improving the customer experience in our digital services. New features in the K-Ruoka mobile application include product information and food purchases via online store. We opened an entirely redesigned online food store and new online stores for Onninen and K-Rauta in Finland. In the car trade, the Caara.fi service was complemented with a new Caara Go service, where you can obtain a car for temporary use, be it a month or a year, for a monthly fee agreed upon beforehand. We launched Student K-Plussa, a loyalty programme for higher education and university level students that offers e.g. a 5% rebate on purchases at K-food stores. Some 20,000 students joined the programme over the first few months. In the autumn of 2017, we began a collaboration with the global online store operator Alibaba to sell Finnish food brands in China. We export Finnish food brands and our own Pirkka products to the growing Chinese market. |
||
Management by information |
Each K-store is customised to meet its local customer demand by utilising customer data. |
We created three new applications for all K-food stores, which support store management by information. New tools combined with our existing customer data-based application that supports store-specific business ideas clearly improve the ability to run stores based on customer insight and data. The number of users for new tools aimed at store management by information has tripled within a year. |
||
Using marketing based on customer data, we offer our customers the best customer experience in the trading sector. |
We continued the systematic development of K Group’s marketing through marketing process automation and increased investments in the development and utilisation of marketing technologies. Our objective is to utilise customer data better in our marketing so we can offer our customers a better, more personalised customer experience. In 2016, our own team of experts initiated programmatic targeted marketing using customer data, and nearly half of all digital marketing is now programmatic marketing. |
|||
Additional services in connection to stores |
We want to offer our customers a convenient shopping experience. GRI 203-1 |
We offer our customers the chance to recycle packaging plastics in 173 RINKI eco take-back points located at K-store premises. To increase shopping convenience, self-service checkouts are available for customers at hundreds of K-food stores. |
Kesko operates in the grocery trade, the building and technical trade, and the car trade. In 2017, Kesko had approximately 1,800 stores engaged in chain operations in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Poland, Belarus and Russia. On 16 February 2018, we announced we would discontinue our building and home improvement trade operations in Russia.
Kesko’s principal business model in the Finnish market is the chain business model, in which independent K-retailers run retail stores in Kesko's chains. Retailer operations accounted for 43% of Kesko’s net sales in 2017. At the end of 2017, Kesko had over 1,100 independent K-retailer entrepreneurs as partners. Kesko and K-retailers form K Group, whose retail sales (pro forma) totalled around €13 billion (VAT 0%) in 2017. K Group employs around 42,000 people.
Outside Finland, Kesko mainly engages in own retailing and B2B trade. B2B trade accounted for 35% of Kesko’s net sales in 2017. Kesko’s own retailing accounted for 22% of net sales.
Kesko hosts a comprehensive K-food store network in Finland, and there are K-food stores in most Finnish municipalities. K-food stores are visited by around 1.2 million customers every day.
Especially outside growth centres, retail stores can offer community services which may otherwise be scarcely available. In 2017, the following services were located in connection with K-food stores:
The store site network is a strategic competitive factor for K Group. In 2017, Kesko’s total capital expenditure in store sites amounted to €256 million (2016: €217 million). Kesko’s most significant recent store site project is the new shopping centre, Easton Helsinki, in Itäkeskus, Eastern Helsinki. The capital expenditure is valued at €100 million, with an employment impact of approximately 250 person-years for a period of two years. Easton Helsinki was opened in October 2017 and it offers people in the region the best and most versatile food selections both in the physical store as well as online. Easton is a forerunner in combining digital and physical channels and services. The new shopping centre and its occupants provide employment to some 300 people.
In addition to statutory waste recycling obligations, K-stores provide the following recycling services:
Waste statistics are presented under 306-2 Waste.
Kesko’s community investments are presented under Society in the Responsibility programme.
The K-responsibility concept is used to tell customers about the store's good deeds and to help them make healthy and sustainable choices easily. The K-responsibility concept is in use in K-food stores and K-Rauta stores.
Customers' needs and consumption behaviour change greatly as new electronic services and, particularly, mobile services become increasingly widespread. Kesko's key strategic objective is to serve customers in all of its divisions by using the opportunities provided by mobile services, online services and digital marketing.
Kesko Product Research Unit's laboratory monitors the safety and quality of groceries and home and speciality goods sold by K-food stores and K-Citymarket hypermarkets.
In addition to the laboratory, the Product Research Unit includes a test kitchen and K-Consumer Service. The test kitchen's duties include sensory evaluations of products and the testing of their cooking properties. The consumer service provides information on Pirkka products: customers can give feedback on products and ask about various aspects of our products, such as product origins, ingredients, their suitability for different kinds of users and instructions for use and preparation.
The home economics teachers in Kesko's grocery trade's marketing unit develop and test hundreds of new food recipes annually. The recipes in the K-ruoka.fi service include the nutritional content of each dish to make it easier for people to make choices.
In the building and home improvement store operations, the assessment of a store's operational responsibility comprises the store's annual self-assessment, the criteria defined in the store's quality system and a responsibility audit performed by an external party on a specified sample. The auditor reports the results to the store and to Kesko. Food store operations utilise the Hymy quality review system.
The service level, recognition level and images of Kesko's chains are regularly monitored in brand surveys targeted at consumers in all product lines. The same practice is applied to the K-Plussa customer loyalty programme and the grocery trade's own-brand products. Store-level customer satisfaction is measured by customer satisfaction surveys and the mystery shopping method in food stores and building and home improvement stores.
Customer health and safety | Kesko Group - Own-brand products and own imports |
Product and service information | Kesko Group - Own-brand products and own imports |
Marketing communications | Kesko Group |
Compliance | Kesko Group |