Jelmoli is the leading department store in the centre of Zurich. Its high-quality products and the expert advice and first-class service provided by its staff ensure that its customers enjoy an exclusive shopping experience. Founded in 1883, Jelmoli is Switzerland’s oldest department store. It has always been in Swiss ownership. Beyond its traditional activity of selling top international brands, Jelmoli is also breaking new ground in the fields of entertainment and gastronomy.
Integrated value generation
Its iconic Bahnhofstrasse location and the unique identity it has forged for itself over the decades are essential features of the House of Brands, as Jelmoli calls itself. This well-established department store offers its customers a remarkable lifestyle experience. The sheer range of products it sells make it a small city within the city. Both on stage and off, the emphasis at Jelmoli is on first-class service provided by excellently trained staff. The company is also investing in digitalisation and continues to develop its omni-channel strategy. The idea here is to offer its customers as much freedom as they want. Purchases, deliveries and returns can be carried out online or in store, with every conceivable permutation being supported. Articles purchased in store can be sent to customers at home and goods bought online can be returned to the store. Thanks to the click and collect service, customers can order goods at any time of the day or night and collect them from Jelmoli seven days a week.
Jelmoli’s gastronomy offering continues to develop as quality food at reasonable prices becomes ever more popular. While it prepares many of its offerings itself, Jelmoli also works with carefully selected partners. The gastronomy area of the store can be hired for private events even after the store itself has closed for the night. These Jelmoli events can be complemented by a range of exclusive experiences, ranging from food tastings, to style advice to backstage tours. These encounters provide positive points of contact to the House of Brands – even for people who had never visited the department store before.
Synergies with Swiss Prime Site
The reliable tenant relationship between Jelmoli and Swiss Prime Site Immobilien is a genuine win-win arrangement. Jelmoli benefits from stable rental terms and secure tenancy for the long term, while Swiss Prime Site Immobilien is able to generate a good level of steady rental income and benefit from the capital appreciation on the building – thanks also in part to the continuing investments being made in it.
Being part of the same group as a department store is a significant advantage to Swiss Prime Site Immobilien when it comes to identifying retail trends at an early stage. The experience gained at Jelmoli helps Swiss Prime Site Immobilien to recognise shifts in the retail landscape and to determine what requirements properties need to fulfil in order to accommodate them. Swiss Prime Site Immobilien, Jelmoli and Wincasa share the costs of employing one person as a trend and innovation scout for the retail sector. This person’s job is to detect market trends and interpret them for the benefit of all three parties. In this way, Jelmoli can incorporate global retail trends into its strategy, while Wincasa and Swiss Prime Site Immobilien also both profit from these insights in their respective roles in property management and real estate estate investment.
Business opportunities and business risks
Factors such as competition, digitalisation, increased transparency and changes in consumer behaviour have a significant effect on the retail sector. Jelmoli is focusing particular attention on digitalisation, which is constantly challenging the balance between online shopping and bricks-and-mortar retail. The unrelenting pace of social media is another key factor, which can influence customer perceptions of brands and products in the blink of an eye. Jelmoli employs a number of strategies to ensure that it remains advantageously positioned in this changing environment. Product ranges are constantly being reviewed, refined and calibrated to current market trends.
To remain competitive, Jelmoli needs to structure its costs as efficiently as possible. The present scale of its operations, however, makes it difficult to streamline costs much further. The attractive design of the building and the high quality of service it delivers are both essential to Jelmoli and the brands it represents. The planned expansion which will begin at Zurich Airport from 2020 will create synergies which will generate an enhanced ratio of revenues to fixed costs, thus further strengthening the Jelmoli brand.
In 2017, Jelmoli generated CHF 153 million in operating income from its retail activities and its various service offerings. The quality of its services – which is regularly subjected to mystery shopping tests and is constantly being enhanced – made for high levels of customer satisfaction, which are clearly reflected in its net promoter score surveys, with 96% of customers saying they would recommend Jelmoli to others. The guest relations desk Jelmoli maintains in Zurich, the only one of its kind in Switzerland, provides the company with additional direct feedback from customers.
The corporate values which Jelmoli has maintained over many years are integral to the company’s DNA. The 623 employees working for Jelmoli fully espouse these principles, as do the 400 or so staff working for its third-party tenants. Employee surveys are regularly carried out to monitor job satisfaction levels (for more details of this, see the «Attractive working environment» section on pages 79 ff.).
Maintaining good relationships with its neighbours is particularly important to Jelmoli. By operating its department store at a first-class location on Zurich’s renowned Bahnhofstrasse, Jelmoli enhances the value of its environment. Conversely, of course, it is very dependent on efficient transport links and a minimum of restrictions to them. Jelmoli is a member of the Bahnhofstrasse Association, whose aim is to maintain the Bahnhofstrasse as an attractive retail thoroughfare. The association is also reponsible for Lucy, the famous Bahnhofstrasse Christmas illuminations. As a member of the nationwide Swiss Retail Federation, Jemoli works to further the interests of the retail sector. The company is also a founding member of the IGDS (Intercontinental Group of Department Stores) established in 1947. This enables it to maintain a close dialogue with other leading department stores across the globe.
An exclusive partner for customers and tenants
Its customers are Jelmoli’s most important stakeholders. The company offers them a comprehensive range of high-quality services. Should they have any questions or concerns, customers can visit the guest relations desk close to the entrance area. The mystery-shopping tests Jelmoli carries out enable it to identify opportunities for improving the customer experience. These insights are reflected in its staff training programmes.
Thanks to its collaboration with exclusive brands, Jelmoli is always in a position to offer its customers a curated range of products which meet the highest standards of quality and aesthetic appeal. Furthermore, the company always strives to be perceived by its key brands as a high-revenue partner with an excellent image. Innovation and exclusivity enable Jelmoli to define a clear identity of its own, while its carefully selected product range helps it to differentiate itself from its rivals.
Jelmoli’s tenants, who occupy roughly half its overall retail floorspace, are another important stakeholder group. By holding regular meetings with them and discussing issues such as profitability and product-declaration requirements for sensitive items such as fur, Jelmoli is able to identify appropriate initiatives to improve its performance. Sales staff also receive specific training from the companies whose products they sell.
Differentiation and innovation drive business success
In 2017, Jelmoli focused its attention on differentiating itself more markedly from its competitors, developing innovative services and sharpening its own brand and company profile. The purpose of this differentiation strategy is to move the company away from the middle market segment and to develop a premium profile with a clear focus on profitability rather than revenue maximisation. One benefit of this approach is that it should significantly reduce the number of clearance sales, which not only eat into margins but also undermine the credibility of its pricing policies and adversely affect perceptions of the quality of its merchandise. Rather than offering high-quality products at implausibly reasonable prices, Jelmoli now places greater emphasis on promotion campaigns to acquaint its customers with new products. Particular mention should be made here of its range of clothes for men, which has been expanded to include five attractive new high-end brands.
Digitalisation enables Jelmoli to develop innovative business models which create new experiences for its customers. Keeping abreast of these various initiatives and making efficient use of the potential of every part of the company will remain a key challenge for Jelmoli in the years ahead. In 2017, Jelmoli joined forces with the Swiss Post Office to test a delivery robot. During these tests, the robot delivered 170 individual orders and covered an overall distance of 375 kilometres. This experiment provided Jelmoli with valuable insights for the future development of its distribution capabilities.
Compliance and social commitment
Product declarations foster transparency
For Jelmoli, providing its customers with appropriate product declarations and comprehensive information on everything they buy are fundamental prerequisites for business success. If its products have adverse effects on its customers, this can significantly undermine Jelmoli’s reputation and directly impact its financial performance. The plethora of information now available, particularly on social media, has created a highly transparent world, in which inadequate products or services can rapidly attract public attention.
Articles subject to declaration requirements include food, body-care products and household equipment. Typically, these declarations must provide details of a product’s country of origin, the substances it contains and its composition, as well as details of how to use it, dispose of it or recycle it. Jelmoli’s purchasing and sales departments constantly review these requirements. Jelmoli is working with the Zurich animal protection association to implement the statutory declaration requirements relating to fur products with decisive thoroughness. Jelmoli sees the duty to provide comprehensive product descriptions as resting primarily with manufacturers and suppliers. Where declarations are incomplete or implausible, Jelmoli does everything in its power either to obtain the missing information or, in the case of sensitive products, to take appropriate preventive measures. As a last resort, the company is prepared to consider cancelling its supply contracts.
Personal data security guaranteed at all times
Through the operation of its J-Card customer card programme, Jelmoli collates data on the purchasing preferences of more than 250 000 of its customers. These insights help the company to make continuous improvements to its product ranges. To warrant the trust that its customers place in it by using their cards, Jelmoli has established a comprehensive range of security measures, which minimise the risk of data being lost. Data security requirements are defined by Loyalty, the company’s VISA partners and its customer relationship management department. Data security within Jelmoli itself is constantly being monitored. No complaints relating to data security were made in 2017.
A shared point of reference and a significant economic factor for Zurich’s city centre
Jelmoli attracts large numbers of people to downtown Zurich. Customers, passers-by and people working nearby all benefit from the attractive opportunities it offers for shopping and eating out. Neighbouring businesses also benefit from the magnetic effect the department store exerts and the large customer footfall it generates. Thanks to its location in the middle of the Bahnhofstrasse, Jelmoli is also an ideal place for people to meet, providing a valuable link between the upper and lower end of Zurich’s best-known thoroughfare.
As part of its commitment to the society it serves, Jelmoli has been contributing to the costs of Zurich’s so-called Märlitram (in English, «fairy tale tram»), a specially decorated heritage tram which offers children free city-centre round trips at Christmas time. At Christmas, Jelmoli also organises baking courses for children and sells a cuddly toy, donating the proceeds – suitably augmented by a contribution from the company – to a charitable organisation. In 2017, this money was given to the Make a Wish Foundation.
Sustainable investments and services
Far-sighted initiatives from which customers benefit
Primary responsibility for the products Jelmoli sells lies with the companies which manufacture and supply them. Notwithstanding this, Jelmoli carries out spot checks on its merchandise and systematically removes any items which do not meet its standards from its product range. Quality control is particularly stringent in its food department, where several checks are carried out every day. The requirements laid down by the food hygiene inspectorate are systematically implemented. Thanks to these measures, Jelmoli is able to keep the risk of merchandise jeopardising the health or safety of its customers to a minimum.
Jelmoli places enormous emphasis on the health and safety of its customers. The design of the building itself and the quality of the products sold in it both reflect these priorities. As part of the systematic evaluation of its store, in 2017 Jelmoli invested in a new ventilation system. In the years ahead, it will continue to improve the building. Responsibility for security at Jelmoli does not rest solely with its six internally trained paramedics and the security staff on each floor. It is also borne by all other members of Jelmoli’s staff, all of whom have been familiarised with the company’s security concept. In 2017, a total of two evacuation exercises were carried out, both of which were highly successful. Two further such exercises are planned for 2018.
Focusing on sustainability throughout every supply chain
Jelmoli’s product range encompasses some two million articles from over 1 000 different brands. In 2017, the company’s purchases totalled some CHF 75 million. Many of these items are fashion, beauty, sport and food products. Jelmoli’s food-purchasing policies are primarily focused on ecological considerations, while its purchases of textiles and products for use in the home are mainly guided by its social priorities. This latter policy reflects the fact that working conditions in textile-producing countries are often harsh or unsafe. That being said, Jelmoli’s position in the upper segment of the market does mean that, particularly in the field of textiles, it is acquainted not only with its European suppliers but also with their manufacturers. In 2017, this enabled the company to harmonise and streamline its purchasing negotiations and to take sustainability and ethical considerations into account in its final supplier selection. All suppliers are now routinely questioned on their partnerships with the relevant NGOs and their sustainability and ethics policies. Jelmoli also systematically stipulates what sustainability labels each brand can use.
Protecting the environment
Energy and emissions
As planned, Jelmoli switched to LED lighting between January and March 2017. This initiative reduced the power consumed by the company’s lighting installations by more than 60%, thus achieving annual electricity savings of some 1 200 MWh each year. The project, which received CHF 400 000 in subsidies from the Swiss Confederation, will enable the company to make a substantial and enduring reduction in its electricity costs. An additional benefit of this initiative was that lighting quality and product presentation were both improved.
Cutting food waste
By implementing a new food-waste concept, Jelmoli was able to reduce the amount of food it had to throw away in 2017. The new approach partly relies on the fact that the company’s own restaurants can use ingredients from the Jelmoli FOOD MARKET as long as they are in perfect condition. This not only helps to reduce the amount of food thrown away, it also helps to cut costs. Moreover, the new concept provides a welcome challenge to the creativity of Jelmoli’s cooks and the versatility of their cuisine. Between 7.00 and 7.30 pm, the new Too Good To Go app enables interested parties to place orders at reduced prices for a variety of dishes which would otherwise have to be thrown away at closing time.
Reducing and recycling waste
Jelmoli strives to use as few natural resources as possible. One way of achieving this is by reducing waste and recycling any waste which is generated as usefully as possible. In 2017, Jelmoli redesigned its waste-management concept. As part of this initiative, the logistics department was tasked with analysing all recoverable substances and waste products generated by the company in its operations, and all processes supporting those operations, with a view to streamlining and optimising procedures wherever possible. The resulting 2017 waste-management concept is in line with current recovery, recycling and waste-disposal practices. In the years ahead, it will constantly be revised to meet new requirements as they arise.
In order to make the packaging used in its department store more sustainable, in 2017 Jelmoli carried out an internal analysis to determine the feasibility of introducing environmentally friendly carrier bags. The results are now being evaluated and the initial insights thus generated will be assessed in 2018.
Attractive working environment
Being there for its employees
Providing its employees with a positive working environment is an important priority for Jelmoli. The company places particular emphasis on open dialogue to help it achieve that goal. Twice a year, representatives of the Jelmoli staff association, who are elected by the employees, meet with two members of the company’s executive board to discuss issues of particular concern to Jelmoli’s staff. The executive board also directly addresses the employees on a regular basis through a series of information meetings. In 2017, a special app was developed for all Jelmoli employees enabling them to access news and information about the company rapidly and easily on their smartphones. This ensures that all employees share the same level of knowledge of matters affecting Jelmoli.
In order to maintain a positive working atmosphere, Jelmoli provides meal vouchers to staff members who work until 8 pm. Other such initiatives include group breakfasts for all staff before the department store opens for its special Christmas Sunday shopping days in December. Another important component of the attractive working conditions Jelmoli offers its employees is the fact that both full-time and part-time employees receive company pensions in excess of the statutory minimum. One objective of this policy is to help to achieve a steady reduction in staff fluctuation rates. Should circumstances make this necessary, employees can anonymously discuss any grievances they may have by calling the integrity line. Staff members encountering difficulties in their private lives can receive free advice from a specialised counselling firm. Jelmoli employees are not subject to any collective employment contracts. Mutual appreciation, ability to accept criticism and personal commitment are the key values the company seeks to foster among staff in their dealings with others. Jelmoli also sets great store by having a diverse workforce which reflects the heterogeneity of its clientele. In 2017, Jelmoli’s staff encompassed employees from 40 different nations and all age groups. No cases of discrimination were recorded in 2017.
Prevention enhances safety
Besides ensuring that its customers remain safe, Jelmoli also makes the health and safety of its own staff a key priority. Accordingly, the company has formulated a set of health-and-safety-at-work directives whose observance is regularly monitored by the City of Zurich’s employment inspectorate, most recently in 2016. Jelmoli has defined a set of internal directives to complement and lend further substance to the rules and regulations generally applied in the retail sector.
In order to keep their workplaces safe and afford better protection to their health, Jelmoli organises training courses to raise its employees’ awareness of the behavioural aspects of safety at work. Should they so wish, Jelmoli staff members can receive free flu vaccinations. Responsiblity or emloyee safety rests with line management.
Furthering employee development and raising service-quality levels
For Jelmoli, the best way of reaching the high service-quality levels it strives to achieve and retaining employees over the long term is to further their personal development. For new hires, the development process already begins with their Welcome Day, during which Jelmoli’s core values and working philosophy are explained. All staff members then attend a number of basic training courses, while retail staff also in service delivery and quality assurance. The company’s leadership courses are designed as a series of modules taught over a period of one year. Jelmoli supports its employees’ individual development by allowing them to attend language courses and other continuing education programmes. In 2017, Jelmoli invested 1.06% of its overall salary budget in the continuing training and education of its staff. Individual employees’ continuing development and training objectives are defined during their annual performance appraisals.
Talented young staff participate in a two-year development programme overseen by a mentor. This involves their assuming responsibility for performing tasks beneficial to Jelmoli. One such example is the Generation Y project, which analyses the purchasing patterns of people born between 1980 and 2000. The company also offers its promising young employees the opportunity of participating in talent development programmes organised by the IGDS retail association. Conversely, the Jelmoli 50+ programme is specially designed to hire older employees in order to match the heterogeneity of its customer base. This initiative helps the company to recruit sales staff combining many years of experience with a wealth of knowledge and a willingness to go the extra mile in serving their customers. Experience has shown that these attributes are very greatly appreciated by Jelmoli’s customers.