John Lewis poised to unveil ‘modernised brand purpose’

John Lewis chairman Sharon White kicks off a review of the brand purpose in a bid to gain a deeper understanding of the issues motivating customers.

John LewisWaitrose and John Lewis are set to unveil a modernised brand purpose next month, as they seek to better meet the rapidly changing demands of their customers.

John Lewis Partnership chairman Dame Sharon White, speaking today (17 September) at the announcement of the group’s results for the six months to 25 July, told Marketing Week that the review of group-wide purpose will go far beyond what to do about its ‘Never Knowing Undersold’ price promise – which the retailer is widely expected to abandon.

“This is about something much deeper that will be motivating to partners and also to customers, to make sure that we are the kind of business that they want to come to and buy from,” she said.

“We know that customers are looking to buy different things, differently, and that they are paying a lot of attention to are the values and services of the businesses they buy from. We are looking at that very carefully.”

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The results of the brand purpose review are set to be unveiled in mid-October. They are likely to focus on big issues of inequality, wellbeing and sustainability, said White: “From all of the customer research we have done and are doing these are really important parts of our proposition as a business.”

The work includes a review of the Never Knowingly Undersold promise, introduced in 1925, which White described as “really appropriate for the time”, but which now needs “modernising and refreshing”.

“We are also reviewing how our brand stands for great value for money and fairness, in blending with our quality standards,” she added.

The company is in the process of analysing its entire pricing strategy, and the message it delivers, in a bid to look holistically at what the John Lewis brand stands for.

Purpose is the absolute foundation stone of all our plans going forward.

Sharon White, John Lewis Partnership

Ongoing trial schemes, such as the John Lewis furniture rental service, rebates for returned clothing items and reductions in the use of plastic, are “already consistent with the direction of travel,” White added. “Purpose is the absolute foundation stone of all our plans going forward.”

Purpose is the first of five key areas being tackled in the John Lewis Partnership review, along with simplification of the way it operates, increasing its digital focus, broadening its financial services and growing partnerships with third parties that respect the John Lewis ethos.

Shift to online

The six month period covered by the group’s interim results has seen seismic changes to the way it does business, and to its balance sheet. For the first time since 1953, the group’s staff will not receive a bonus. Higher costs, including £580m of exceptional items, offset a slight overall rise in sales to result in a £55m loss over the six month period.

Changes to consumer behaviour have been striking. More than 60% of the group’s sales are now online – compared to 40% before the Covid-19 pandemic began.

John Lewis director of finance, Patrick Lewis, said the group had performed well in the circumstances, with sales up by 1% and profits broadly level with last year.

Waitrose saw like-for-like sales grow by 9.6% during the period, with online sales leaping by 133% as consumers stayed at home and ordered in. “Current weekly orders are at nearly triple the volume we were running at pre-pandemic,” Lewis said.

waitrose onlineWaitrose.com is now effectively a £1bn a year business, fulfilling the group’s three-year plan in a single year. The supermarket brand is already working to increase its capacity for deliveries by a further 50%, and from Monday it will reduce its minimum order threshold from £60 to £40 to broaden its appeal.

John Lewis saw sales fall by 9.7%, but online sales were again “exceptionally strong”, with 73% growth.

“Before the crisis we believed that shops contributed around £6 of every £10 spent online. We now think that figure is, on average, around £3,” White told John Lewis partners in a letter. The group has taken a £471m hit, on paper, from the reduced value of its property portfolio associated with that change.

John Lewis executive director Pippa Wicks said that the brand now has a significant opportunity to grow by bringing together its digital and physical capabilities to give customers the best of both worlds.

“This kind of multichannel approach is going to be a key part of out strategy going forward,” she said.

Before the crisis we believed that shops contributed around £6 of every £10 spent online. We now think that figure is, on average, around £3.

Sharon White, John Lewis Partnership

In particular, the department store group is offering digital versions of services such as home design and personal styling. Online beauty events are proving popular, said Wicks, with product and service innovation driven by new customer insights.

The furniture rental trial, operated with Fat Llama, saw all the available products rented out within 48 hours. The company is now exploring rental opportunities across the country.

Wicks said that reopened stores are currently trading at levels around 15% below pre-Covid levels, but that this is improving week by week. The group still plans to invest in physical stores, which it says customers value highly, but says that the new world order in retail requires the ability to change.

A number of John Lewis and Waitrose stores have or will close to reflect the changing retail landscape. The company has also applied for planning permission to convert some of its flagship store on London’s Oxford Street to other uses.

“We haven’t made any concrete plans, we just wanted to get the flexibility,” said White. “There may also be other places where we choose to do that.”

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