Wedding wish lists as customer retention strategy at Jelmoli Holding AG

01. July 2003



For over thirty years the department store Jelmoli Zürich has assisted engaged couples with the compilation and administration of their wedding wish lists. The shop-in-shop concept allows various brands to be represented at Jelmoli Zürich. As a result, a wide range brings with it a particular competitive advantage. Unlike wedding wish lists in many household goods stores, Jelmoli also sells designer furniture, holidays, entertainment electronics and sport equipment, etc..
This case study shows how an existing service provision can be supported by new technology to enhance customer benefit.


1. Jelmoli-Holding AG

Jelmoli Holding AG is a retail trade and service provision group, active in the business divisions of retail trade sales and retail trade property. The turnover of 1,079 million francs is distributed more or less half and half between the segments of retail trade sales and retail trade property. Of the 2,605 employees, however, over 90% are employed in retail trade sales.

  • The business division of retail trade sales is split into six independent subsidiary companies: the department store Jelmoli Zürich, Molino-Restaurants, Beach Mountain, Mode-Fundgruben, Portable Shop and Fust.
  • The business division of retail trade property rents property to other retail traders.

 

“Processes are only supported by the internet if the latter is aligned with the marketing objectives of Jelmoli,
if it brings added value to the customer and if it simplifies workflows for the department.”

(Uta Wille, Manager of E-Commerce and Database Marketing, Jelmoli Holding AG)

 


2. Centralised-decentralised organisation with clear task distribution

The supreme decision-taking panel for internet activities undertaken by Jelmoli Zürich is the E-Commerce management committee, on which the group chief and Uta Wille are in charge of aligning activities with the group-wide strategy and the managing director of Jelmoli Zürich and Brigitte Baumberger are in charge of alignment with Jelmoli company strategy. The panel signs off project budgets, plots milestones and serves as escalation instance.

Project management is in the hands of the group-wide service provision office for E-Commerce and database marketing. Under the directorship of Uta Wille, the department undertakes the following tasks:

  • It contributes e-commerce expertise to the project
  • It supplies project resources
  • It assures technical operation of applications
  • It manages external service providers

Brigitte Baumberger is responsible for projects within Jelmoli Zürich. She has the following tasks:

  • Looking after the Jelmoli Zürich website in terms of content
  • Responsibility for turnover generated from wedding wish lists and the gift service
  • Coordinating her activities with the departments within Jelmoli Zürich (marketing, purchasing, stock).
  • She raises awareness among the employees to the potential of the internet.

Brigitte Baumberger: “A generally understood language is a prerequisite for promoting acceptance of the project among employees. Integration of the employees was important for Jelmoli to ensure that wedding wish lists would not be perceived as mere cannibalisation of the bricks-and-mortar trade.”


3. Acquiring customers – retain customers

Wedding wish lists have been a customer-orientated service at Jelmoli for thiry years; not only does this service generate turnover, it attracts new customers, too. The aim at Jelmoli is to make wedding couples regular customers. Through the imminent wedding ceremony a high level of involvement is engendered on the customer side, which often leads to a great commitment to Jelmoli. The intensive contact during compilation of the wedding wish lists also fosters a close relationship.

The Jelmoli strategy is to gear all activities in the internet towards bringing customers into the department store. That is why, for example, the wedding wish lists can only be compiled on the spot at Jelmoli Zürich; this day is set up as an event for the engaged couple.


4. Enhancing customer benefit

The process of compiling and administrating wedding wish lists has not changed with the extension of the service to the internet (cf. figure 1). Customer benefit could be enhanced by means of various new facilities for customers:

Step 1, Selection of items: The engaged couple goes on arrival at Jelmoli to Customer Services where an employee informs them about the wedding list service and guides the couple through the department store. Then the couple selects the gifts. The Jelmoli employee enters the items into the back office system and if required takes a photograph of them with a digital camera.

Figure 1: Wedding wish lists process.
Figure 1: Wedding wish lists process.

Step 2, Designing the wedding wish list: Jelmoli posts the list and the images of the items in the internet. The couple can now match images with text themselves. With regard to larger gifts, Jelmoli can, on request by the couple, split the price. Then the wish list is released for the wedding guests. At the same time, Jelmoli prints the wish lists. Thus guests without an internet connection can also choose a gift. Benefit for the couple:

  • They can add their own individual design to wish lists with text and images.

Step 3, Ordering: The guests can order in the internet or using the printed wish list. Benefit for the couple:

  • Wedding preparations need not get underway quite so early, as the wish list does not need to be circulated among the guests one by one.
  • Guests can make their order in real time and locally.
  • Even guests in other countries can simply choose a gift and have it sent.

Step 4, Calling up the current status of the wish lists: The engaged couple can review the current status of the wish list at any time on the internet. Previously every 10 days Jelmoli sent a list by post with the current status of orders made by telephone. However, it could not be guaranteed that details were up-to-date when the list reached the customer. Benefit for the couple:

  • The couple has up-to-date information about the status of their wish list.

Step 5, fulfillment: Jelmoli manages the stock with the gifts on the wedding wish lists. After the wedding, a delivery date is arranged with the couple. The gifts are then delivered directly to the couple. Payment for gifts can be made by credit card or invoice.


5. Calculating economic efficiency

Extending the service to the internet had an immediate effect on turnover: the company succeeded in increasing turnover against the previous year by over 80%. In January and February 2003 the number of wish lists against the previous year actually doubled. The value per wish list has increased by 15%.

This earnings growth has to be balanced with the investment in the new wedding wish lists. Investment in the wedding wish lists in the internet has also changed the cost structure at Jelmoli:

Higher personnel costs:

  • Warehouse capacity was stretched to the limit due to the surge in orders. Jelmoli created a new position whose function is to take care of stockkeeping and goods dispatch.
  • The employees handling the wedding wish lists were trained for their new tasks: firstly, they were introduced to the new application to enable them to enter phoned orders into the internet application. In addition, the department was oriented more intensively towards direct sales.

Higher process costs:

  • Photographing the gifts and uploading the images incurred an increase in process costs for the wedding wish lists.

In addition to the increase in turnover, the other benefit categories further balance the increased costs:

  • Customer satisfaction: there is a high degree of satisfaction and acceptance among the wedding pairs. Almost all couples selected a wish list with an internet option. The new service was warmly received by the guests, too; over three quarters of the guests’ orders were made via the internet. A high level of customer satisfaction leads to retention of the couple to Jelmoli.
  • Process savings: process costs were reduced because Jelmoli no longer has to inform the couples by post of the current status.

6. Challenges

The greatest challenge at the moment lies in the operational running to continue to be able to cope with rising volumes into the future. It is only once the processes have been efficiently implemented that Jelmoli can step up promotion of the new wedding wish lists. To this end all wedding wish list processes are supported with marketing activities.

Jelmoli Zürich wishes to maintain its competitive advantage. The company continues to uphold the philosophy of staying close to traditional retail trade with new applications. Processes can only be supported by the internet if this is in line with the marketing objectives of Jelmoli, if it brings additional benefit to customers and/or simplifies workflows for the department.


7. Conculsion

The wedding wish lists on the internet are not a new business model, rather an existing service that has been mapped to a new technology in order to make it more attractive. The process was designed to resemble the existing one as closely as possible. Thus Jelmoli benefits from previous experiences and can deploy internet technology precisely where it provides customers with added value.


Owner/s of the solution

Jemoli Holding AG
Uta Wille, HOD E-Commerce and Database Marketing
Brigitte Baumberger, Manager of E-Commerce / Shop-in-Shop Jelmoli Zürich
Industry: Wholesale & retail trade
Company size: large-scale enterpriseJemoli Holding AG

Case study author/s

Pascal Sieber, Nicole Scheidegger, Thomas P. Aebersold
Sieber & Partners
Gerrit Taaks
Unic AG

01. July 2003
Scheidegger; N.; Sieber; P.: Organising E-Business III; Verlag Paul Haupt; Berne; Stuttgart; Vienna; 2003.

For this case study no attachments are available.
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