It’s difficult to describe how most feel about John Lewis. I don’t mean their gorgeous stores or brilliant staff; I’m talking about their very different business model of employee ownership.
Well, with pre-tax profits up 28% to £110m for the six months to July 31 they’re the envy of the high street this autumn. John Lewis online is their single biggest outlet (larger than their flagship store in Oxford St.) and it was up 36%!
Many put this growth down to their price matching policy of never knowingly undersold. Dixons hit them hard on prices last autumn and they struck back with their own marketing campaigns.
The most interesting thing about this policy is that John Lewis have only recently changed tact and taken it online when it only applied in store previously.
A) This really reflects the pricing problems facing retailers today;
B) It shows they are incredibly serious about online growth.
Of course the bigger question is whether these constant price reductions are forcing retailers to a race to the bottom? Are consumers being educated to wait for sales? How do you communicate your added value with branded products at reduced prices?
Following their best Christmas to date, the very on-form John Lewis was recently voted Britain’s best shop by Verdict and its 6,000 shoppers. Let’s be honest, what’s not to like? The stores are upmarket but unpretentious. They’ve a quality product offering and peerless customer service.
John Lewis is different from normal retailers. They’re known as a bell-wether for high street trading, not because they mimic other retailers but because they report sales figures weekly as opposed to the normal quarterly results from the likes of Tesco and M&S. They are incredibly transparent; a throwback to being a ‘partnership’, owned by its 69,000 employees partners. This transparency and an old fashioned willingness to ‘serve’ clearly run through this business.
Although, that said, the latest ForeSee Christmas E-Retail Satisfaction Index tells a slightly different story of their online offering. In this brief but excellent study of the top 40 retailers (according to traffic), Amazon trump John Lewis as clear overall winners.
JL did come out on top when looking at the multichannel category, ahead of Boots and HMV. Most surprisingly of the pure plays (Internet only retailers) ASOS rank seventh, behind QVC and M&M Direct.
Regardless, both polls show JL is getting it very right where its customers are concerned. If I were Andrea O’Donnell, JL’s Commercial Director, I’d be very pleased but a little puzzled as to how a cold pure play like Amazon could best me when customers can’t even speak to an individual, let alone be impressed by one. Email updates obviously go a long way.
Plenty has been said about Dixons’ comparison ads lately. They’re a blatant come-on aimed squarely at John Lewis, Harrods and Selfridges. They invite consumers to research with their competitors and then convert to Dixons for stronger pricing.
This is primarily a drive for Dixons’ website, with their retail sites only operating at airports. The strapline is, Dixons.co.uk: the last place you want to go.
These are more ‘designed’ than the comparison ads seen from the supermarkets. By using rivals’ fonts and colour pallet, they’re well and truly ‘up yours’ ads.
Having seen them for a while, I still can’t fully decide if they’re touting an honest and clever reflection of modern shopping habits or even pushing a wee bit of a class divide.
Either way, I think they’re a bellwether of what to expect from copywriters this winter, where ads will be thin on superlatives and hard on competitors. The Christmas run-up is getting all in your face – don’t skirt around with clever copy, get down to brass tacks and call your competitor out. Just look at Tesco and Asda for more evidence.
By day, Nick Fluck is a director of Tredz, a bicycle retailer with a strong web presence. By night, Nick can be found moonlighting on Digitally Minded, waxing un-lyrically about marketing, business, new media, technology and innovation. This semi-personal, part-professional blog is a collection of Nick’s weekly(ish) ramblings as the wannabe business partner/love child of Seth Godin Want to know more?
Plenty has been said about Dixons’ comparison ads lately. They’re a blatant come-on aimed squarely at John Lewis, Harrods and Selfridges. They invite consumers to research with their competitors and then convert to Dixons for stronger pricing.