Saeed wrote this case analysis as a marketing course practice. The author does not intend to illustrate either effective or ineffective handling of a managerial situation.
Jill’s table is a small business located in London Ontario focused on kitchenware and specialty food. During the years, Jill Wilcox, the owner of the Jill’s Table has been known as a food expert. Also the store has established a brick-and-mortar environment providing its customers unique and face to face experience. Some customers made Jill’s Table a frequent destination. Jill has to decide whether she should invest on online store or not and if they choose to provide online shopping what kind of strategy she should choose?
Jill’s table may face two problems. The main challenge is whether they should develop an e-commerce strategy or operate solely as a bricks-and-mortar retailer. The secondary problem is that online market presence could jeopardize the established customer relationship, which is the most important key to Jill’s Table’s success. It will be difficult to translate the customer relationships and in-store experience to e-commerce. For answering these questions we will start by analyzing the current customer base then we will analyze the opportunities as well as the potential threats. As we will show later, there is a huge potential growth in using e-commerce platform that Jill’s Table should not ignore that opportunity easily. In Fisrt Step, Jill can use its current customers to create an online social media community and increase the online brand awareness. Then in Second Step Jill can focus more on online store and promoting products using different online marketing techniques.
Jill has made a solid local business and she needs to know how she can use their current publicity to gain online presence.
Customer Analysis by Category:
To discover untouched market, the current customer base would be act as a good army of marketing solders that can spread the world of Jill’s table on social media platforms or invite their friends to visit Jill’s table website. So here we will do a quick analysis on current customer bases:
Current Customers Segments:
This group consists of people aged 45 to 65, Mostly women (75% women, 25% men). They seek latest food items and they host dinner parties. There is a good chance that they would like to talk about their new food discoveries loudly among their friends. Also the dinner parties are the best place to spread the word of mouth about new ingredients they have found through the Jill’s table store and introduce the Jill’s table business and social media channel. This can lead more brand awareness for Jill’s table. They visit Jill’s table store regularly every week, so they can help a lot to make a buzz on internet and social media platforms about new product arrivals. Since this is the most loyal customer group it is predictable that company can engage them in social media channel easily and there is a good chance that they become loyal visitors to company website and contributors to the social media channel conversations.
They are aged between 35 to 45 years. They shop locally and are in favor of sustainability. Jill’s Table can get them engaged by store’s social media conversations if Jill’s table can put emphasis on organic ingredients and green foods and recipes. They also seek food knowledge so an online subscription to weekly or monthly free recipes would be interesting for this group. They also live in downtown and visit the store monthly, so they can help the online campaign by following and spreading words about store’s new arrivals on Internet or recommend them to their friends.
They are aged between 30 to 60 years old, equal number of men and women. They watch food network and they seek special ingredients for cooking. They can easily be involved with store’s online campaigns. They love foods and new ingredients so they will follow store’s online buzz about specialty foods and new ingredients.
This is the most diversified customer group consisting of people aged 45 to 80 years old and 40 percent women and 60 percent men. They buy gifts or food for other persons and they are seasonal customers. They will be attracted by seasonal kitchen or food promotions. For example Christmas gift promotions might be attractive for this group. Since corporate shoppers are part of this group it would be more convenient for them to do their gift shopping online and get those gift delivered to the corporate place.
Except the Holiday Shoppers, which they are not closely tied to the business and they are not as loyal as other groups, it looks like other three customer groups are fine with social media networks and creating online presence would engage them more with their favorite brand.
Market Segment Geography:
City of London, Ontario:
The city has a population of 366,151 according to the 2011 Canadian census. [Wikipedia] . The average age is 38.2 years which means there are potential customers who can be either from discoverers group or foodies. Also 82.0 percent of the population of London is European, which means the European food taste and hi quality food ingredients are welcome and known by this people.
Canada has a population of 33.4 million [2011 Canadian Census, Wikipedia] and it is world’s second large country by total area. Since Jill’s table was a local business in London, it doesn’t have a nationwide presence and there is no brand awareness country wide. 38.4 % of Canada population resides in province of Ontario and 23.6% in province of Quebec. It would be easier and cost effective if Jill’s Table starts brand presence in these two provinces because in overall more than 60% of country’s population lives there and it easier to focus and manage the target market. Also the shipping cost would be cheaper if company targets customers in those two regions.
Country average age is 39.9 which mean discoverers and foodies are two best groups to invest in.
Jill’s Table doesn’t have international presence. Mintel’s consumer research shows that people are increasingly realizing the value of investing a little more in a quality product, with 31% believing that for successful meals, good cookware is essential. Meanwhile, almost half (47%) believe that it is worth paying more for quality, while only 33% look for special offers and just 18% wait for the sales. [MarketReaserchworld] Kitchen and cookware market size is 11 billion dollar with 2.2% annual growth. [ibisworld]
So generally it looks like it is a huge growing market but at the same time they are big competitors targeting this market which will make it difficult for Jill’s table to find its way for international market.
William–Sonoma Is an American publicly traded consumer Retail Company that sells kitchen wares and home furnishings. It is one of the largest e-commerce retailers in the U.S., and one of the biggest multi-channel specialty retailers in the world. y 2009, Williams-Sonoma, Inc. was operating 610 stores with an annual revenue of over $3 billion. The brand has Canadian presence since 2001 when they opened their first Canadian branch in Toronto [wikipedia-w-sonoma].
For sure William-Sonoma is a strong competitor with big money to fund their online presence and launching the advertising campaign it would be hard to compete with them.
Amazon is an American electronic commerce and cloud computing company with headquarters in Seattle, Washington. It is the largest Internet-based retailer in the United States. With revenue of 107 billion dollars it is one of the main e-commerce players in the market. Amazon is offering wide variety of kitchen appliances and cookware’s. They are offering free shipping on some products.
Competing with e-commerce giants like amazon would be though. We can imagine two advantages for Jill’s Table over these big ecommerce stores: first Jill’s table can offer additional added value to online kitchenware shopping by providing extra merchandise usage information through the recipes. Second advantage would be to gather a high quality and hand pick selection of the kitchen wares so customer can be sure that these items are recommended by a food expert.
Big Retail stores like Canadian Tire and Walmart:
Big retail stores have good presence in Canadian market, although they sell all variety of kitchen and cook wares but their collections are not usually credited as a premium products.
Local grocery stores like Loblaw’s are also offering new food ingredients like wide variety of mushrooms. They have a good portion of special ingredients market.
Since the whole business has established and concentrated around the owner Jill Wilcox, it is very important to see whether she is ready and prepared to become an ecommerce successful manager or not. Jill is a food Expert who believes in “slow and steady” approach. Although the online platforms have very fast pace but like any other projects, one needs to be patient and put hard work to achieve success in ecommerce world which it looks like Jill has both attributes. She loves social connections either at store or at food conferences and shows. She can use this passion to establish a fan base on social media platforms and gather online followers. She can share her cooking experiences and knowledge through online channels like Instagram, Facebook, Pinterest or even blogs to keep and growth her brand presence in a bigger scale community.
She also believes that having loyal customer is key factor for her business which she can continue this attitude toward her online followers and fans.
|· Being expert in food and specialty foods
· Owner is very passionate for what she is doing
· Jill loves social connections with her clients
· Have loyal customers
· Being unique in City in term of the service offered
· Existing strong loyal customers can be used for expanding online presence
|· No prior experience in online marketing and e-commerce
· No huge capital to backup nationwide or international marketing campaigns
· No brand awareness outside of London
|· Enormous market potential ($11 billion)
· Growth of Social Media which can be useful to expand Jill’s Table online presence
· E-Commerce becoming more and more popular in people’s day to day life
· Untouched potential market for Jill’s Table
|· Switch to online marketing can distract the business from their current customer brick-and -mortar model
· Presence of premium kitchenware international competitor , William Sonoma with big money to back up its brand presence and marketing strategies
· Serious online competitors such as Amazon
Current Online presence:
Jill’s table has established the company store and they have switched to electronic newsletter to inform customers about new products.
From Exhibit 4, Jill’s twitter account has 440 followers, considering 360,000 person population of the city; Jill’s online presence is almost zero.
Evaluation of Alternatives
First Alternative would be to not go toward online and ecommerce presence, this will keep Jill’s more focused on her traditional bricks-and-mortar method and keep customers more satisfied and loyal. This also means that the stores marketing will have a clear, strong, and central strategy focusing on one type of consumer. There is also another risk involved in online presence. Some of the current customers are visiting store more frequently to know about new arrivals. If Jill’s Table increases its online presence they can check those new arrivals through the website and it will decrease the number of customers actually visiting the physical store. Having customers physically visiting the store is very good because employees can promote other product which customer might not aimed or aware of them. Also customers might not receive a good shopping experience as they could have one if they were shopping in physical store which may lead to more customer dissatisfaction.
However, it is an increasing consumer trend to shop online. This means that there is an untapped, international market Jill could be missing out on with no online market presence.
Second option would be to develop an e-commerce Strategy and discover untapped markets.
This would mean the Jill’s Table must develop an online store that is linked to the existing website. This would allow the company to reach a substantially higher amount of consumers, and in many different geographic regions. However, this new online presence could take away from the stores critical success factors if it is not implemented wisely, which are superior customer service and product knowledge.
In order for Jill’s table to reach its full potential, Jill Wilcox should develop an e-commerce strategy. This will require considerable time and dedication, but the change, if executed properly, could result in substantial profit growth. We would recommend Jill’s Table to first use its existing customer base to establish a minimum online fan based group then start promoting its products. Because of the low online brand awareness we would recommend Jill to put 80% of its resource and energy to create social media connection with online community to find and create a new market and 20% of the resources to build online store and related warehousing systems. Jill can choose a social media platform to create it is fan based community like Facebook, twitter or Pinterest but It is important to choose one of them and don’t make customers confused with multiple online platforms. Jill can share her free recipes through this social media channel to get more popularity. After she reached out a minimum online presence she can start promoting some of stores products. We would recommend Jill to focus more on Ontario and Quebec provinces customers, since they are most populated provinces closed by London. Also this will minimize the products shipping cost.
One of the main challenges for Jill would be to maintain her competitive advantage through exceptional customer service. She should put effort to create online product review system which people can express their opinion or review with each product and Company should be responsible to answer any complaints from customers. She should also be active in social media and answer individual questions.
Social Media Channel:
As a first step we recommend her to start to create an online campaign for posting healthy or specialty foods recipes for free. Food recipes is always can be better represented by a nice picture so we recommend those social media platforms which are better supporting photo and pictures like Facebook or Instagram.
For the first step of online presence, we recommend Jill to sell the special ingredients of its free online recipes like Italian vinegars and also the gift basket that can be shipped through the post couriers.
In second step let’s say after one or two years, when the social presence reached an acceptable level of popularity they can invest on a more sophisticated online store which sells the complete wide variety of kitchenware, tableware, and other store products.
Jill’s Table needs to be known as premium kitchenware brand, but going online will make the price comparison possible for online customers. So as a general rule, Jill’s table should cherry peak from stores products. Jill should only make those products available online which they are not on sale or available very cheaper by other online competitors. The shipping cost is also very important in customer final decisions to buy the products. It would be better to keep the high weight items only available for sales in store.
So the pricing strategy can be same as the one company is using for in store products as long as the product is not being promoted by any other competitor with a significant lower margin.
Company should provide in store pickup for London’s customers and shipping through courier for Canadian based customers. We recommend Jill’s Table to offer free shipping for some products or orders greater than a certain amount. For example tableware’s have good markup margins and due to their light weight their shipping cost is not too much, so they can be offered with a free shipping promotion. In another example if the customer order exceeds 100$ it means roughly company has 50% net profit which can cover a typical shipping cost of 20$. So we can offer free shipping on orders greater than 100 dollar.
In first stage of online campaign, we need to create more brand awareness to get more social likes and followers.
Discount Coupon for increasing online followers:
Give out discount coupon to customers who can invite at least ten friends to follow the Store’s Social Media campaign. This can boost the social media channel growth.
Free weekly food recipes:
This can be a great motivator for people to follow and like the store’s online campaign Create online contest: invite people to try Jill’s recipes and post picture from their food, and select one of them to be rewarded by store discount coupons. This will increase customer online involvement and engagement. It also increases the brand awareness customer’s loyalty.
YouTube 5 Minutes Videos:
Jill can make short cooking videos on YouTube, describing her weekly recipes while she is showing product banners in background (product placement) or using actual tools for making foods.
Kitchenware, cooking tools and Electrics Unboxing and review Videos:
Jill or other store staff can record a short 5 minutes video unboxing the sample products while describing the tool usage and its potential benefits while there is Jill’s Table banner in background or on button of screen. This can work as long term advertising content, since people will refer to this kind of review over next few years.
Online Cooking Courses:
Jill can make some of her cooking courses online, during these courses Jill can promote stores products.
Groupon group discount offer:
Jill’s table can work with groupon.com to prepare a group discount campaign for selling one or multiple of high markup products online. Then groupon will send marketing emails to their subscribed user and let them now they can buy those products with lower price than retail market. This can increase the sale volume instantly while it works as a free advertisement channel for Jill’s Table to improve the brand awareness nationwide. Table wares, Specialty foods and kitchen wares are good candidates for this promotion. As the case bowl which Jill has good markup can be a perfect candidate for high volume sales. This promotion can be started in parallel with increasing the social media presence and Jill doesn’t have to wait for brand to become more popular.
Jill’s table can send periodic weekly flyers with weekly on sale products to encourage their newsletter subscribers to buy new products.
Once online store is setup, Jill can use google AdWords CPC program (Cost per Click) to bring more traffic for the specialty ingredients and premium kitchen wares. Usually CPC cost is too high for bestseller products due the high online competition. So Jill should target a niche market with some special products which the competition is lower and the CPC cost is reasonable to bear with. This way Jill can achieve a better ROI results from its online ads campaign.
Usually the special products with high markup margins are good candidate for CPC advertisement. Jill’s Classes are good candidates for CPC program because the competition is low. Kitchen wares are also can be another good candidate for this program due to their market high demands.
Hero of the Month Program:
Jill’s Table can encourage their customer to use the ingredients or kitchenware tools they have bought from store to make food and send back a picture of that prepared food to participate in a monthly contest. The winner will get a discount coupon or free class admission pass. This will increase customer online involvement and increase online fan base community and royalty.
Most of the current Jill’s Customers are social media Savvy, Although there are big players in ecommerce market, but Jill has several advantages which she can use to make a successful online business case. First products on Amazon or Walmart are a mized collection, so consumers don’t know which one has better quality. While Jill’s collection is hand peaked and Jill by herself made sure they have premium quality. The other advantage is that Jill can bring more value to customers by introducing how they can use these equipment and specialty ingredients in making actual food which is very valuable. Considering her reputation she can make a good online brand presence.
For first the year we expect to see a significant growth in Jill’s social media channel followers.
Groupon campaign will increase the sales volume just right in the first year. This will bring more money for increasing online advertisements. After one or two year she would see sales increase in other sections like electrics.