Kemofarmacija d.d. drives more profitable online sales

Boosting sales and customer spend with advanced analytics and targeted marketing campaigns

Published on 12-Dec-2012

"With WebSphere running on the robust and powerful IBM Power 720 server, we have successfully maximized the revenue-generating potential of our web presence." - Zoran Lemut, CIO, Kemofarmacija d.d.

Customer:
Kemofarmacija d.d.

Industry:
Wholesale Distribution & Services, Healthcare

Deployment country:
Slovenia

Solution:
Smarter Computing

IBM Business Partner:
MZR d.o.o

Overview

Kemofarmacija d.d. is a leading wholesaler of medical and healthcare products and devices in Slovenia. The company is part of the Celesio Group, a leading international service provider for the pharmaceutical and healthcare markets. With a range of over 16,000 products, including medicine, medical devices and supplies, nutritional and cosmetic products and chemicals, Kemofarmacija receives more than 500 sales orders daily and 120,000 sales orders annually.

Business need:
With competitors successfully transacting more of their business through the web, Kemofarmacija wanted to increase customer spend per visit by creating more targeted advertisements and promotions.

Solution:
Using IBM® WebSphere® Commerce, the company built a powerful e-commerce platform, called Nova Elona, that provides insight into customer behavior, enabling the creation of tailored marketing campaigns.

Benefits:
Increased online sales to 90 percent of total, and market share to 42 percent. Boosted average customer spend by running timely promotions customized to each customer segment and purchase history.

Case Study

Kemofarmacija d.d. is a leading wholesaler of medical and healthcare products and devices in Slovenia. The company is part of the Celesio Group, a leading international service provider for the pharmaceutical and healthcare markets.

With a range of over 16,000 products, including medicine, medical devices and supplies, nutritional and cosmetic products and chemicals, Kemofarmacija receives more than 500 sales orders daily and 120,000 sales orders annually.

Maximizing online marketing opportunities

Kemofarmacija recognized that it was not fully exploiting the potential of its internet sales channel. While more and more customers were opting to make their purchases online, the company found that it was being overtaken by competitors when it came to web-driven sales.

Zoran Lemut, CIO of Kemofarmacija d.d., explains: “Market needs had evolved, but our website had not changed with them. It wasn’t easy enough for customers to navigate our website, and we were not maximizing opportunities for cross-selling or more targeted online marketing.”

Kemofarmacija realized that it could drive more profitable sales by creating tailored website advertisements and promotions, offering customers the products they wanted at the right time. The company first needed to gain greater insight into its online customer base, so that it could enhance its website to better meet customer needs.

Developing a powerful e-commerce system

Kemofarmacija partnered with IBM Premier Business Partner MZR d.o.o. to design and build a custom e-commerce solution, Nova Elona, which is based on the IBM WebSphere Commerce Enterprise platform.

The Nova Elona solution integrates IBM WebSphere Commerce Enterprise software with the company’s existing content management and ERP systems, offering advanced functionalities such as special offers, management of sales activities and customer segmentation.

The Kemofarmacija website currently offers products from around 500 suppliers to more than 1,000 customers, including pharmacies, hospitals, veterinary clinics and specialized medical retailers. The company is now in the process of extending Nova Elona to include an e-purchase system, which will automate the collection and processing of online sales orders.

Solid Power Systems platform

Nova Elona is hosted on an IBM Power® 720 Express server, with the IBM i operating system providing the exceptional levels of security and business resiliency that Kemofarmacija needs to guarantee consistently high service levels for its mission-critical e-commerce system.

“We are a long-term user of the Power Systems™ platform, and have always been impressed by the system’s stability and performance,” says Lemut. “The IBM Power 720 Express gives us all the performance we need in a compact, cost-effective and highly reliable server. There is also a clear upgrade path, so we can be sure that the solution will grow in line with our requirements. When you combine all of this with IBM’s continued investment in the platform, it gives us great confidence for the future.”

By choosing to run IBM WebSphere Commerce Enterprise on the IBM Power 720 Express, Kemofarmacija can take full advantage of its existing investment in and knowledge of the Power Systems platform. The company is also maximizing the potential for creating even greater business efficiency by leveraging a single Power Systems server to run the new solution alongside its other core business applications.

More effective marketing campaigns

IBM WebSphere Commerce enables Kemofarmacija’s marketing team to deliver highly personalized marketing campaigns and advertisements via the Nova Elona solution. With the WebSphere software, users can fine-tune online shopping flows and electronic marketing messages, without intervention from IT.

The solution provides information on customer behavior and the distribution of sales over different customer segments and sales channels—online, telephone orders and direct sales. It also provides powerful analytical tools for measuring the effectiveness of each marketing initiative.

Based on these insights, marketing teams can promote specific products for strategic time periods and fine-tune the forecast for marketing campaigns. Tailored marketing ads are automatically displayed for the appropriate customer segment.

Increasing online sales

Kemofarmacija can offer a personalized online shopping experience, automatically promoting different ad spots to different customer segments. This capability has significantly increased the amount of sales orders placed through the company’s web portal, and the average customer spend per visit.

“We are now able to offer online promotions and display ads that accurately reflect the products that customers are most likely to be interested in purchasing,” notes Lemut. “As a result, we have experienced a 30 percent increase in online sales order lines, so that more than 90 percent of our sales order lines now come through our web portal. We have also been able to improve cross-sales by presenting more targeted product recommendations, thereby encouraging customers to buy more during every visit.”

The increase in online sales orders has also enabled Kemofarmacija to transfer a number of staff from its call centres into higher-value areas, such as field sales and marketing.

Gaining an edge on the competition

With IBM WebSphere Commerce boosting online sales, Kemofarmacija estimates that it has captured 42 percent of the market, giving it the largest market share in Slovenia.

Zoran Lemut concludes, “With WebSphere running on the robust and powerful IBM Power 720 server, we have successfully maximized the revenue-generating potential of our web presence.”

For more information

To learn more about IBM Power servers, contact your IBM sales representative or IBM Business Partner, or visit us at: ibm.com/power

To learn more about IBM WebSphere Commerce Enterprise, contact your IBM sales representative or IBM Business Partner, or visit us at: ibm.com/software/genservers/commerce/wcbe

Products and services used

IBM products and services that were used in this case study.

Hardware:
Power 720 Express, Power Systems running i

Operating system:
IBM i

Legal Information

© Copyright IBM Corporation 2012 IBM Corporation Systems and Technology Group Route 100 Somers, NY 10589 Produced in the United States of America December 2012 IBM, the IBM logo, ibm.com, Global Technology Services, Power, Power Systems, and WebSphere are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. It is the user’s responsibility to evaluate and verify the operation of any other products or programs with IBM products and programs. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. POC03123-USEN-00