How Nespresso transformed from a product-centric business to an AI-driven service platform – and which business model innovation factors made it succeed

Purpose This real impact article focuses on the interplay between business model innovation and artificial intelligence (AI) in the coffee industry. We explored Nespresso's omnichannel customer engagement as a key case study on AI-enabled platform service model. Drawing on secondary data on customer experience with AI-based solutions, this study shows the business model and key innovation factors of Nespresso. The study focuses on customer service experience and omnichannel engagement rather than the capsule and machine business revenue stream. Design/methodology/approach This research conducts a single-case study of Nespresso service application scenarios, based on publicly available data from the Nespresso website, reports, partner websites and academic literature. We explored how Nespresso and its parent company, Nestlé, structured their business model, as well as five use case scenarios for an omnichannel customer engagement strategy. Findings The omnichannel experience case of Nespresso represents a fundamental way of companies to transform from classical business models toward an AI-enabled omnichannel service ecosystem. In particular, this case, based on its digital platform and high-end physical boutiques, represents a strategic competitive advantage, enabling a shift from product-centric to service-platform innovation. Originality/value Omnichannel engagement enabled by AI technologies at Nespresso is a case of real impact of business model innovation for scholars and practitioners. This paper contributes to the literature by showing AI-enabled business model innovation for competitive advantage in the coffee industry, which currently faces high competition. To keep pace, companies like Nespresso should structure their business models to generate new revenue streams from omnichannel customer engagement.