Never knowingly under-digital – John Lewis Partnership's post-COVID vision starts to take shape
Never knowingly under-digital – John Lewis Partnership’s post-COVID vision starts to take shape
Fri, 07/31/2020 – 02:15
- The John Lewis Partnership is a UK retail icon that’s thinking long and hard about what it needs to do to evolve for a post-COVID world.
What retail will look like in a post-pandemic era is a question that all major retailers are – or should be – currently asking themselves. As lockdowns lift and store fronts re-open, there are significant questions to be addressed about how physical stores can operate safely, whether customers will feel inclined to come back in-store and even whether there’s a need for real world outlets beyond being click-and-collect pick-up points.
UK retail institution John Lewis Partnership, owner of John Lewis department stores and grocery chain Waitrose. has been conducting its own strategic review of operations and considering what shape the company will take.
The first fruit of that review emerged yesterday in a letter to staff from CEO Sharon White, in which she envisages a digital first future. Specifically the expectation is that John Lewis will become a 60% online retailer, up from 40% at present, while Waitrose will rise from 5% to over 20%.
This will mean re-considering the role of the traditional shop, says White:
As customers increasingly shop online, we will become digital first. We have ‘catch-up’ investments to make in johnlewis.com. Shops will always be crucial to the brand, but they will be in support of online.
Over the next five years we expect to rebalance our shop estate so that we have in the right space int he right locations where people want to shop….We want to get more experimental with store formats. Shops will showcase our brilliant products – displaying great design with more space given over to experiences that cannot be found anywhere else.
In two months time, Waitrose loses its online delivery partnership with Ocado, unfortunate timing perhaps just as the online grocery delivery business is soaring. White insists the moment has been prepared for, saying that Waitrose will increase delivery slots to 250,000 a week, up from 60,000 pre-COVID.
She also intriguingly alludes to looking into other delivery options, but provides no more detail:
Outside of their regular grocery shop, we also know that our customers are spending a lot on food delivery services. We see significant scope for us to grow in this area, and are actively exploring early opportunities.
It could just be co-incidental timing, but her comments come less than a day after Amazon announced a significant upping of the stakes with its Amazon Fresh grocery delivery service, announcing that Prime customers in London and parts of the South East of England will be able to have free same day food delivery if they spend more than £40. Rival providers, including Ocado, charge a fee that varies according to the time of day of the delivery, while same day ordering and delivery is not the norm.
The free delivery option will be expanded out over the coming months, with Birmingham, Manchester and Edinburgh likely to be next in line. The service will also look to expand its range through partnerships. Amazon Fresh carries products from Morrisons, Whole Foods Market, and Booths, as well as smaller specialist suppliers. It does not – and has no plans to – offer ranges from Tesco, Sainsbury’s or ASDA.
No mention is been made either way of Waitrose. A tie-up between it and Amazon could be very useful as Ocado switches allegiance to Marks & Spencer (M&S). Waitrose higher end customer demographic could provide a useful leverage for Amazon Fresh at that end of the market , provide a relatively captive audience and put additional pressure on M&S as it finally gets its own online delivery service working at scale.
Inside the store
Given that there is still a role for stores, what will be interesting will be to see what a post-pandemic John Lewis shop looks like. There have already been examples of other retailers looking to digital tech to create a safer way of shopping, such as French icon Galeries Lafayette’s plan to use Augmented Reality to provide remote shoppers with access to the store.
John Lewis has its own plans to offer a virtual personal shopping service using Zoom. Customers book a free 30 minute appointment, provide details of what they’re looking for and are then ‘shown around’ the department store by an in-shop adviser. Purchases can be ordered online and then collected from the store or delivered to home.
Steven Hand, John Lewis Head of Customer Experience, says the initiative is intended to provide a virtual extension of in-store customer service:
The lockdown has changed customer habits, but customer service remains as important as ever…What our Partners offer in our shops is impartial expertise and advice and this pilot means we can offer that again to customers all over the UK who cannot get to our shops.
Behind the scenes, there’s also a lot of tech upgrading going on. The firm is working on a centralised data platform built on Google Cloud which will consolidate customer data across both John Lewis and Waitrose.
It also plans to outsource parts of its IT function offering “specialist IT application services” to Capgemini. Forming part of John Lewis’ Technology and Change function, Capgemini will support core operational IT application services used across its technology estate, including supply chain, finance and personnel systems as well as core enabling services like integration.
It’s a move that follows an earlier decision to offload IT infrastructure services, including cloud hosting, to Wipro to help expand the retailers digital services capabilities. As part of the deal, John Lewis will transfer 244 of its non-customer facing staff to Wipro in November.
Mike Sackman, John Lewis Partnership CIO, said outsourcing will make the Partnership better equipped to deliver on future strategy:
Consumer behaviour is changing and in a post-COVID-19 world we need to be more agile, adapting more quickly to change. Wipro will support us in the delivery of that ambition, ensuring that we always have access to up-to-date technologies and specialist expertise.
As for Capgemini, it’s a similar story:
Capgemini will provide the Partnership with the necessary thought leadership and change support to allow us to further develop our customer propositions.
John Lewis is a UK retail icon, dating back over a century. It’s been a regular fixture on the tech vendor events circuit for decades, wheeled out as a prime example of best practice in customer service and support. But as COVID has made brutally clear, all icons are vulnerable and we’ve seen that time and again across the retail landscape over the past few months, the pandemic adding more pressure to a sector already in disruptive turmoil.
The first fruits of the John Lewis Partnership’s strategic review are interesting enough in their general statement of direction, albeit also pretty predictable, although there are some novel thoughts around what to do with unwanted real estate. But there’s precious little meat on the bones in terms of detail on how to deliver on this new digital destiny.
That’s OK for now. This is very much a work-in-progress. But there will need to be more tangible action points coming out in the near future. As an employee-owned Partnership, the brand reckons to have more time to play a long game on transformation, but as White concludes in her communication:
We need a transformation in the business and the action we take over the next nine to eighteen months will be crucial. I am very conscious that a strategy…is just another piece of paper. It is how we deliver on the plan and the commitment from all Partners that will make the difference.
Image credit – John Lewis Partnership