How John Lewis Is Harnessing the “Unavoidable Growth” of Digital

Like its rival Marks & Spencer, the upmarket UK department store John Lewis is experiencing a big lift in digital sales and traffic. This is no better illustrated than in the run-up to Christmas last year. Over the six weeks to December 31^st 2016, online sales accounted for 40% of the retailer’s total, with mobile sales up 80% over the period. Mobile, indeed, now accounts for 37% of all traffic to the John Lewis website.

To give some perspective on these figures, in-store sales were up just 0.8% in the Christmas lead-up, indicating that the vast majority of John Lewis’s customers now prefer online or click-and-collect options.

And where online sales are growing, so too is the retailer’s online impact – not least on social media. Over the years, one of the major milestones in the UK’s festive calendar has become the John Lewis Christmas advert – when these start to air, consumers know that the silly season is just around the corner.

But last year, John Lewis took the decision to premiere its ad on YouTube, as opposed to its usual home on the telly. In the past, the retailer has often created emotion-laden tearjerkers for its Christmas video advertising campaigns. But 2016 saw a departure from this tactic with a more “upbeat” campaign that told the story of Buster the Boxer (a family dog) enviously watching the local wildlife bounce around on a trampoline.

The video generated 53.5 million views across social media channels for the retailer over the Christmas period – figures that John Lewis Managing Director Andy Street believes to be of high value. “We had the most viewed Christmas campaign last year. Is that important? Yes. We need people to be talking about the John Lewis brand and associating us with thoughtful giving,” Street said in Marketing Week.

The “Unavoidable Growth” of Digital

Chairman of the John Lewis Partnership Charlie Mayfield admits that he hadn’t expected the retailer’s online sales to grow so significantly in 2016. However, the “unavoidable growth”, as he terms it, of John Lewis’s digital successes he says now makes investing in online infrastructure one of the biggest priorities going forward.

“There are now a lot more digital-only shoppers but they aren’t our focus,” he says. “The most valuable shoppers are the ones who shop across multiple channels as they tend to spend a lot of money with us. So while digital is a big focus, I wouldn’t say we’re a digital-first business, it’s more just waking up to the fact consumers now need multiple efficient options to access our brand.”

Part of this process has come in the form of increased investment in the retailer’s supply chain to support a “larger, faster and more convenient multichannel business.” This includes two brand new distribution centres at Magna Park, Milton Keynes, where most of its fashion and non-fashion deliveries are now handled. The benefits have not gone unnoticed. “This showed in the second half of the year, as the investments made enabled a strengthening performance with operating profit before exceptional items up 3.8%,” the retailer reports in an article for Internet Retailing in March this year.

John Lewis also focused on allowing “customers to combine convenient online shopping with visiting shops which provide inspiration and experiences.” This was enabled through the merging of its online platforms so that customers now have the same shopping experience no matter if they are purchasing from the retailer’s app, mobile or desktop site.

Investing in In-store Mobile Technology

Further enhancements to the customer experience are being made in John Lewis stores with the recent announcement of a £4 million investment being made to introduce mobile technology to staff in-store.

This comes in the form of a mobile app – designed and built by John Lewis’s in-house online team using feedback from store associates in its Cambridge outlet – which helps staff to answer customer questions about products and availability instantly when they visit a store. The app enables store representatives to see where stock is available across the John Lewis network of stores and in the Milton Keynes warehouse where orders are fulfilled. Staff can also use the app to place orders, and see product information and customer reviews.

The technology was put through its paces in the Cambridge store, where, during the busiest week of the trial, it was used with half of all online purchases made in the shop when the customer was assisted by a John Lewis Partner. Following the success of the trial, the app will be rolled out to 8,000 shop floor representatives this summer.

“As online and physical worlds increasingly come together, this initiative, which forms the foundation of our digital strategy for shops, will support our Partners in offering great customer service in a digital world,” said Craig Inglis, John Lewis’s customer director.

“During the trial in our Cambridge store, customer feedback was overwhelmingly positive. It consistently speeded up response times to customer queries as Partners didn’t need to leave the customer to find answers, or complete a purchase. This is just the beginning. We will keep adding to the Partner App in the future with new, innovative ways to help our customers.”

A Relentless Focus on Innovation

Despite Mayfield’s almost reluctant comment about the “unavoidable growth” of digital, John Lewis has nonetheless been one of the pioneers in bringing the online side of business into stores. It began, in fact, way back in 2008, when the retailer first installed touch screens in its bricks-and-mortar locations so customers could look up product information and check online availability. Earlier this year, John Lewis also introduced a self-check-in option at its collection desks in stores, enabling customers to punch their order number into an iPad while they are queuing to pick up an order, thusly reducing waiting times.

Digital may be “unavoidable”, but for John Lewis it seems that’s just as well, for whether it’s social media marketing, omnichannel, or mobile technology for staff, this is one retailer that’s firing on all cylinders as it strives to stay at the cutting edge of retail. The last word goes to Sir Charlie Mayfield.

“What has driven our performance is a relentless focus on developing products that are innovative and offer terrific quality and great value to customers. It is also a reflection of the strategic investment we have made over a long period now in building our ability to serve customers whenever and wherever they want to be served. When people come to shops they are looking for fantastic quality service. Commodity service is not good enough. What we have also done is increase convenience for customers generally with shops they can get to, and things like click-and-collect that have been hugely successful.”