Johannesburg - German roasted coffee retailer Tchibo breaks all the rules and does it all wrong, yet it has built itself up into a €4 billion (R37 billion) business, with 1 300 stores across Europe.
After all, what the retailer aims to do, wait for it, is decrease turnover every five to 10 years.
Tchibo Holdings chief executive Dieter Ammer told the Consumer Goods Council of SA yesterday that scarcity of sought-after stock was a sure-fire way to stimulate demand and strengthen the brand.
But the retailer and supplier does not run out of the coffee beans that it started selling in 1949, rather it is the themes of non-food items, from telescopes to toilet seats, that the company cuts back on once or twice a decade.
The mass-market retailer lures customers through the 28 million cups of fresh coffee it sells a day, but the secret of its success lies in its ability to spin non-food wares.
Non-food stock is sold in weekly themes of no more than 30 products, which can vary from back to school to mountain biking.
Every week of the year any unsold stock is shipped out and stock for the new theme arrives.
Ammer said Tchibo's secret was that it surprised customers every week, and drove customers to buy on impulse while they sipped on their coffees.
When the novelty retailer introduced telescopes four years ago, it sold 18 000 during that week's theme, twice as many as sold in speciality stores over the entire year in Germany.
"You can't get what you want at Tchibo, so the brand has to pull customers in," said Ammer.
But he said the unique strategy was stumbled across by accident. Knick-knack "gifts" were included in the beans it sold eventually leading to a free Italian cookbook in 1973.
A German court ruled that this was an uncompetitive practice and so Tchibo simply sold the cookbooks. They sold out in a week.
Ammer said the key to its success was its ability to immediately take advantage of this fate, which he said was often a deciding factor in a successful business.
He said the company was "very vulnerable" because of the numerous global suppliers it used to bring in the new products every week.
Outgoing Pick 'n Pay Stores chief executive Sean Summers oozed enthusiasm for the business, which he said must be one of the most sophisticated supply chain systems in the world.
While most big retailers are reliant on the top technology firms in the US and Europe for their supply chain systems, Tchibo mostly develops its own.
For most retailers, unsold stock is the biggest enemy and they will do almost anything to get rid of it, even for very little money if they have to.
But Summers said Tchibo reversed the supply chain, sending unsold stock back to the warehouse until they dreamed up a new way to put it back on the shop floor.