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Shopping as an experience

Interview with Franco Savastano, CEO Jelmoli and President of the Bahnhofstrasse Association

Linda Herzog spoke with Franco Savastano.

Mr Savastano, which megatrends of this change in the retail sector are most affected by Jelmoli?

Franco Savastano: Digitalization and online trading are, of course, huge topics. In my opinion, just as important is the topic of experience. People want to experience something and the cities are moving closer and closer together. We are in competition with Milan or London, where the shopping experience is great and where you can fly for little money. Studies show that two-thirds of foreign purchases are experiential purchases. And in these cities you can also shop on Sundays without any problems, for example after a visit to a museum. This is less possible in Zurich and as a result we are of course penalized and we feel it.

How do you generally assess the development of Bahnhofstrasse as a shopping destination?

I think the Bahnhofstrasse is still very important, as international rankings show. On a length of 1.3 km you will find a very high density of luxury products. In addition, there are chocolate shops and cafes where you can sit outside. Of course, there is sometimes criticism that there are too many watch shops. But the watch industry is one of the most important industries in Switzerland. In the 1920s, there was criticism that there were too many chappellerie - i.e. hat shops - so there were always such phases. Criticism is part of the development.

How do you assess the location of Jelmoli as a department store on Bahnhofstrasse?

According to a study by Crédit Suisse, Jelmoli is the number one in terms of customer frequency on Bahnhofstrasse due to our bridging function. On the one hand, we are in a relatively neuralgic place with high frequencies and at the same time we are positioned very high-quality. And also as far as the products are concerned, we connect virtually the entire Bahnhofstrasse under one roof: We sell both Red Bull and a fine Chateau Petrus. So we have both, we are almost the Bahnhofstrasse in small.


How do you think the retail landscape in Downtown Zurich will change in the next 20 years?

I think the stores will certainly become more flexible and there will be new concepts. A shop can be a shop during the day and a club in the evening. I can imagine that such mixed concepts can become meeting places. And I believe that mixed concepts are also an opportunity for the side streets to be able to implement a concept there with a lower rent.

Do you see the food and snack departments as areas that will become even more dominant in the future because they can offer the customer an experience?

Absolute. With an estimated 2500 restaurants in Zurich, we have a very great affinity for food. That's where we pick up the customers. We have a total of nine restaurants in the house: For example, the concept "Bad Hunter" – completely natural vegetables, hardly salted – but also a very well made kebab, homemade pasta, a Japanese restaurant, a French Fauchon café... We also offer cheese in Switzerland's first cheese humidor. The department thus represents a large city under one roof. In addition to Globus, Coop and Migros, who are all three world champions in food, our chance was to create an experience.

Do you think that shopping behaviour in general will move in the direction of more freshness and quality?

 Yes, absolutely. I believe that a sustainable way of thinking about quality is in the DNA of the Swiss. I see our great opportunity in the fact that people want to know again where a food comes from. Then they are also willing to eat one less fillet and pay a little more for it. We also do not carry out a sale more than twice a year. This is a point in which the retail trade is currently reacting extremely wrongly. This comes from a "stinginess is cool" mentality from Germany or even worse, the "Black Friday" sale in the USA. Switzerland has never distinguished itself through price, but always through quality. We also no longer offer goods reduced to seventy percent. This is not fair to those in production, because they have to sell their goods far too cheaply. Our answer to the online giants like Zalando or Amazon is: If we want to survive, we simply have to offer much better products and much better services. This means that companies have to completely reorganize themselves. I think the trade has just been doing too well for a while. Now we have to react.

And how do you invest in the quality of services?

Three aspects are central to us here: On the one hand, we try to have a sales team in every department that fits in there: In the running shoes department, for example, there are people who do triathlon on the side, so they can give you great advice. In addition, it needs a good age mix among the sales staff. Most stores hire too many young, inexperienced staff for cost reasons. We have hired fifteen people in our fifty plus program who are between fifty and sixty-five years old. The third important aspect is training. We invest a lot of money in training, team coaching, individual coaching, organizational workshops and also offer discounted language courses.

You are in regular contact with the City Council of Zurich: What are the central issues that you bring to the attention of the City Council?

On the one hand, the parking spaces are of course a perennial favorite. Another important topic is Sunday sales – something the city council doesn't necessarily like to hear. When it comes to Sunday, arguments are always made with family and Sunday rest, but let's be honest:  a church hardly has any customers on Sundays. In addition, there are now many different religions and ways of life in Switzerland, so that Sunday has taken on a different significance. In addition, the employee is often portrayed in the discussion as the punished. There are many couples who have to feed a family in pairs. And these can save on care if one parent goes to work more on weekends. If two or three large houses were allowed to open on Sundays, we would not only serve customers, but also create more jobs. What people no longer want is to shop or drive to work during peak hours and thus have the stress. People want to be more relaxed and unfortunately these are the ones who then switch to online.

Is there a location in Zurich that could become a competitor similar to online retail for you due to the various district upgrades that have taken place?

Of course, there is competition when a district develops and then, for example, there is a good grocery store just around the corner. But I think this is a competition in a positive sense. It is likely that shops for daily needs with a certain convenience character will be created in these quarters rather than for products such as watches and jewelry.

Is there an aspect of this change in commerce that we haven't talked about yet, but that is significant to you?

Well, I think it's very good and valuable that the city is doing such a project. However, I think it would be important to look at other aspects of the topic. I almost can't hear the word digitization anymore! Not because we don't deal with it, we have a whole team that does just that. But we must not forget one thing: man is made to be with people. I believe that our mission is to create such a meeting place by making the city attractive. The question must be: How are the people in our city doing and what need do you have? And if people feel the need to be a little more relaxed, then we have to do something about it and release some of the stress and pressure that prevails in many parts of society today. 

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