John Lewis’s new retail strategy, even more digital

retail strategy

British retailer the John Lewis Partnership will accelerate the expansion of its online business, diversify beyond retail strategy and seek more partnerships as it aims to recover profitability, it said …

Detailing a five-year plan to grow the employee-owned department stores and Waitrose supermarket group, Chairman Sharon White said she was targeting profit of £400m by year five.

The Covid-19 pandemic has hammered Britain’s retail sector, leaving gaping holes on the country’s main shopping streets and costing tens of thousands of jobs. The crisis has forced retailers to re-think their business models. 

The partnership will spend £1 billion to grow its online business and improve its stores, and is targeting efficiency savings of £300m a year by 2022. 

Its plan will see the department stores business become a 60-70% online retailer by 2025 from 40% before the crisis. 

It will diversify into product rental and resale, private rented and social housing and expand its savings and insurance offer. 

John Lewis will retain its “Never Knowingly Undersold” price pledge, though it may be modified next year. 

HOW JOHN LEWIS PLANS TO GET CLOSER TO ONLINE CUSTOMERS

Sixty per cent of John Lewis & Partners’ sales are now online, following the shift in customer behaviour brought by the Covid-19 pandemic. By 2025, the retailer expects that up to 70% of its sales will be online. The department store, ranked Elite in RXUK Top500 research, will invest further in virtual services such as personal styling, home design and the John Lewis virtual Christmas shop, as it looks to reinvent its in-store services for an online audience.

John Lewis, which now has 42 shops after deciding not to reopen eight from Covid-19 lockdown, is expanding its click and collect locations well beyond its own footprint through branches of Waitrose, third party retailers – such as pick-ups through 505 branches of the Co-op – and collection points, with the aim of reaching 1,000 sites. Shoppers will be able to buy as well as pick up products at them, as the retailer focuses on how people now want to buy from it.

It also wants to get to know its customers better through data analytics and new loyalty plans. Its Never Knowingly Undersold promise is in place until a new pledge can be made next year, following customer research.

Waitrose’s delivery capacity will grow to over 250,000 orders a week, up from 55,000 before the pandemic, and to attract more customers it plans more partnerships like its recent trial with Deliveroo. 

“We’ve seen five years of change in the past five months and Waitrose and John Lewis have responded with great agility”, Sharon White said.

“Our plan means the John Lewis Partnership will thrive for the next century, as it has the last,” she added.

Last month the partnership reported a first half loss of £635m after writing down the value of its department stores by £470m.

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