John Lewis boss: Marketing is absolutely fundamental to our success

Earlier today (2 January), John Lewis reported a 6.9 per cent increase in sales over the festive period to a record £734m.

Gains were driven by a 22.6 per cent increase in online sales with sales from its website accounting for almost a third (31.8 per cent) of its total income in the build up to Christmas.

Andy Street, managing director of John Lewis told Marketing Week its marketing activity has played a key role in its success.

“Festive success hasn’t come from one particular thing this year, it is really the accumulation of many things over a number of years. We have been following pretty ruthlessly the omnichannel bricks and clicks strategy and building the brand and marketing has been a part of that.”

He adds: “Marketing itself doesn’t bring the success but it is an absolutely fundamental part of our success because it helps pull everything together.”

Street says the nationwide rollout of its loyalty scheme in October has also helped. Its loyalty card can be used in its stores and online to earn rewards such as free tea and cake in its restaurants, entry into prize draws and other personalised incentives.

Street adds: “It has (take-up of the card) got off to an extremely good start. We set ourselves a target for the number signing up to it and we have surpassed that rapidly. The share of trade taken on our card has also exceeded expectations.

“It is early days but the signs are very encouraging. What our customers seem to be saying is we appreciate the inclusion in a special club. It’s more sophisticated than points and prizes it’s about being valued as something special.”

John Lewis looks set to outperform rivals over the festive period. Analysts have warned that many on the high street struggled over the festive period because of the level of discounting and its impact on profit margins. Debenhams issued a profit warning earlier this week blaming “unprecedented” promotional activity.

Street says he is “comfortable” with its margins over the festive period and also trumpeted its decision to hold off its sale until 27 December. He does, however, question reports of deeper discounting by rivals in the final days before Christmas.

“The level of discounting [across the high street] has been overplayed. It was about the same as last year. We matched competitors’ prices through [price match guarantee] Never Knowingly Undersold but held off our own clearance sale until 27 December.

“If you’re product is right then the price will sustain itself until then.”

Street confirmed plans to increase its retail estate from 40 to 65 over the next ten years and double the size of its business. It also intends to achieve a 50/50 online/offline sales split over the same period.