JOHN Lewis Report -2 - 70 PDF

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Words By Ellie Sharpe

JOHN LEWIS !

Shop!Report!

Background to the Retailer John!Lewis!is!a!chain!of! upscale!department!stores! operating!throughout!Great! Britain;!retailing!clothes,! cosmetics,!homeFware!and! electrical!goods.!John!Lewis! opened!it’s!Girst!store!in!1864! in!Oxford!Street!London!(Our& History!2014).! The!chain!is!owned!by!the! John!Lewis!Partnership!who! also!own!Waitrose! Supermarket!and!is!Britain’s! biggest!and!oldest!example!of! worker!coFownership.!Since! 1929!the!company!has!been!a! proGitF!sharing!democracy,! where!every!permanent! member!of!staff!is!a!partner! beneGiting!from!the!success! of!the!business.!All! permanent!staff!at!John! Lewis!are!Partners!in!the! business!and!the!Partnership! now!has!over!90,000! Partners!who!share!in!it’s! proGits.!John!Lewis!is!now!the! largest!department!store! retailer!in!the!UK,!with!43! John!Lewis!shops!(31! department!stores,!10!John! Lewis!at!Home!and!shops!at! St!Pancras!International!and! Heathrow!Terminal!2)!and!a! growing!online!business! JohnLewis.com&(About us, 2014)

!! The!John!Lewis!Partnership's!reputation!is!founded! on!the!uniqueness!of!it’s!ownership!structure!and! commercial!success!and!has!been!built!upon!it’s!core! principle!'Never!Knowingly!Undersold'.!This!unique! promise!to!customer’s!is!at!the!heart!of!the!business! and!states!that!‘the!price!of!any!item!sold!will!always! be!as!low!as!the!lowest!price!in!the!neighbourhood’.! It!has!continuously!been!it’s!slogan!for!over!75!years! and!has!added!to!the!strong!brand!image!that!John! Lewis!now!possess.!!! (Never&Knowingly&&Undersold2014).&

Current Trading Financial Information John!Lewis!is!a!leading!department!store!but!is! renowned!for!being!stronger!in!homeFware!than! fashion.!!The!Ginancial!Gigures!from!the!previous!year! end!!(January!2014)!demonstrate!this.!Sales!at!John! Lewis’s!were!£3.3!billion!of!which!clothing!was!only! £0.7!billion.!John!Lewis’s!operating!proGit!was! £226.1!million!which!was!up!(+4.3%)!from!the! previous!year!end!in!January!2013.!!In!2013/14,!! !!!!! likeFforFlike!sales!growth!slowed!a!little!to!6.4%,! which!! ! ! ! ! !

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Words By Ellie Sharpe

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was!!still!far!better!than!almost!all!other!! retailers.!The!main!driver!was!electricals,!up!! 15%,!which!inevitably!overshadowed!strong! growth!elsewhere.!Fashion!sales!were!up!5%.! ProGits!were!helped!by!further!expansion!of! the!Kin!range!and!continued!success!of!the! Alice!Temperley!range.!&(Mintel&2014).! The!Girst!half!of!2014!saw!further!strong! progress.!Fashion!increased!by!9.1%,!with! online!fashion!sales!growth!particularly! strong!at!33.9%.!!In!response!to!the!continued! success!of!John!Lewis’s!ownFbrand!offer,!it! recently!launched!it’s!Girst!John!Lewis!&!Co.! men's!formalwear!collection.!(John Lewis Partnership plc Interim results for the half year ended 26 July 2014, 2014) Success!has!continued!throughout!the!year!! and!John!Lewis!recorded!weekly!sales!! of!£108.8m!for!the!week!of!November!18,!! breaking!the!£100m!barrier!for!!the!!Girst!! time!this!year.!This!matches!the!2013!record!! for!!the!earliest!week!to!have!reached!!the! £100m!milestone.!Online!sales!!also!increased! by!!15%!compared!with!last!year.!(Hounslea, 2014)!! All!the!current!Ginancial!

information!suggests!that!John!Lewis!is!a! far!stronger!department!store!now!!than! during!the!recession!a!few!years!ago.!

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Words By Ellie Sharpe

Retail Strategies John!Lewis!rely!heavily!on!‘Never!knowingly!undersold’!the!slogan!that!lies!at!the!heart!of!the! business!and!is!a!key!retail!strategy!which!the!business!implements.!John!Lewis’s!strategy!is! to!set!highly!competitive!prices!for!all!products,!with!a!‘dedicated’!team!regularly!checking! them!against!other!high!street!competitors.!John!Lewis!guarantee!that!if!it!Ginds!a!national! high!street!competitor!offering!a!better!nationwide!price!for!the!same!individual!product,! sold!with!the!same!service!conditions,!it!will!lower!the!price!to!match!in!all!shops!and!on!the! website,!which!also!includes!when!a!competitor!is!having!a!sale.!! (Never&Knowingly&Undersold&information&lea@let&collected&at&store,&2014)&& In!terms!of!communication!retail!strategies,!John!Lewis!has!prominent!TV!advertisements! especially!at!Christmas.!Last!years!Christmas! advertisement!took!second!place!in!YouTube’s!most! viewed!advertisements!of!2013.!The!campaign!built! Christmas Adverts ! on!the!theme!of!previous!years!by!staying!clear!of! product!and!price!messages,!engaging!with! consumers!on!an!emotional!level,!instead!by!focusing! on!the!joy!of!giving.!This!has!proved!successful.!& (Burke, 2014)

!John!Lewis!use!several!retail!channels!in!order!to!sell!

products,!these!include!bricks!and!mortar!shops!and! an!online!website.!!Online!business!now!represents! 30%!of!sales.!John!Lewis!calculates!that!64%!of!sales! involve!both!online!and!inFstore,!while!only!20%!now! come!just!from!inFstore.!The!company!also!now!has! an!advantage!in!being!able!to!offer!a!‘clickFandFcollect! service’!from!Waitrose!stores!and!has!just!opened!a! “click!and!commute”!outlet!in!St!Pancras.!!Click!and! collect!at!John!Lewis,!now!exceeds!50%!of!online! orders,!as!of!August!2014.!(Mintel,&2014)&!

Market Level

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John!Lewis!department!stores!currently!operate!in! the!upper!mass!market.!Thanks!to!it’s!strength!in! electrical’s!and!development!of!it’s!clothing!business,! John!Lewis!has!been!attracting!younger!customers! and!it’s!customer!base!is!now!younger!than!average.!!! Looking!at!clothing,!the!average!age!of!John!Lewis’s! inFstore!customer!is!40,!while!it’s!online!customer!is! 35.!The!department!store’s!focus!on!providing!more! fashionFled!clothing!is!likely!to!have!led!to!the!near! doubling!in!25F34FyearFolds!shopping!with!the! retailer!in!the!last!year,!with!almost!two!in!ten!of!this! age!group!now!buying!clothes!from!the!department! store!compared!with!one!in!ten!the!previous!year.! John!Lewis!introduced!the!‘Kin’!ownFlabel!lifestyle! clothing!brand!in!February!2013.!It!is!designed!to!be! worn!by!a!wide!age!group!spanning!men,!women! and!children.!The!range!includes!staple!pieces!in! simple!contemporary!styles.!Research!on!levels!of! satisfaction!with!department!stores!shows!that! while!John!Lewis!outperforms!the!leading!four! department!stores!on!almost!every!measure!it!falls! down!in!the!fashionable!clothing!range!criteria.!This! suggests!that!many!still!view!the!retailer’s!fashion! offer!as!conservative!despite!the!success!of!the!! 3

Somerset!by!Alice!Temperley!designer! collaboration!(See!Figures!1F3).!(Mintel&2014)

Words By Ellie Sharpe

Figure!1!

John!Lewis!caters!for!the!afGluent!and! aspirational!middle!classes,!those!for!whom! higher!bills!may!not!bite!so!much!as!for!those!on! a!lower!income.!"It!is!a!very!focused! proposition,"!says!Nick!Gladding,!a!retail!analyst! at!Verdict.!"It!has!a!very!clear!idea!of!who!it’s! core!customer!base!is."! It’s!strong!brand!identity!is!one!reason!John! Lewis!has!rarely!felt!the!need!to!advertise!on! television!as!it’s!customers!remain!loyal.!! (Attwood, 2007)!

Market and Retailer Analysis John!Lewis,!has!cemented!it’s!status!as!MiddleF England's!favourite!shopping!destination!with! record!sales.!"John!Lewis!has!deGinitely!replaced! M&S!as!the!darling!of!the!British!High!Street,"! according!to!retail!analyst!Neil!Saunders!of! Conlumino.!"M&S!is!still!the!more!predominant!–! it!has!more!stores!and!more!shoppers!–!but! when!you!look!at!new!routes!to!market!like! online!and!mobile!John!Lewis!is!light!years! ahead."!In!the!past!John!Lewis!was!unfavourably! compared!with!the!civil!service.!It!was!slow!to! adapt!to!changing!shopping!habits!such!as!late! night!shopping,!Sunday!trading!and!even! accepting!credit!cards.!However!it!did!not!make! the!same!mistake!with!the!internet.!Both!chains! have!invested!heavily!in!the!website!and!the!click! and!collect!services!that!many!timeFpressed! customers!now!take!for!granted.!(Wood, 2014)!

Figure!2

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John!Lewis!is!also!set!to!extend!it’s!ecommerce! lead!in!2014!as!the!UK’s!online!department!store! market!frontrunner!and!is!in!a!prime!position!to! capitalise!on!consumers’!growing!spend.!With! such!strong!investments,!Verdict!now!forecasts! that!John!Lewis’s!share!of!the!online!department! store!market!will!reach!41.0%!in!2014,!15.2! percentage!points!higher!than!M&S!and!27.0! percentage!points!higher!than!Debenhams.!John! Lewis’s!sales!growth!and!market!share! supremacy!are!boosted!by!it’s!strong!online! electrical,!homeward!and!furniture!propositions! rather!than!it’s!fashion!department.!It!targets!a! wider!customer!base!which!enables!it!to!be!a! destination!across!many!product!categories!–! whilst!it’s!rivals!place!more!focus!on!clothing,! limiting!their!reach.!However!John!Lewis!is! aiming!to!increase!market!share!of!it’s!fashion! department!by!trying!to!lower!it’s!target!age! range!of!consumers!through!the!introduction!of! the!new!collections!aiming!to!attract!a!younger! shopper!than!it’s!current!30F50FyearFold! demographic.!This!is!to!avoid!being!left!with! only!an!ageing!customer!base.!!(Fioriti, 2014)&

Figure!3!

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Words By Ellie Sharpe

Corporate Social Responsibility John!Lewis!values!corporate!social!responsibility!(CSR)!and!strongly!and!believes!that!it! ‘complements!social,!ethical!and!environmental!principles!with!sound!business!practice!for! sustainable,!commercial!success’!At!the!John!Lewis!Partnership!success!is!measured!through! the!ability!to!sustain!and!enhance!it’s!position!both!as!an!outstanding!retailer!and!a!thriving! example!of!employee!ownership.""John!Lewis!uses!its!business!structure!as!a!partnership!to! enhance!its!CSR.!In!2013!John!Lewis!Partners!spent!more!than!60,000!hours!a!year! volunteering!in!communities,!and!has!also!been!working!hard!to!promote!the!beneGits!of!

Sourcing In!terms!of!sourcing! John!Lewis!state!that! ‘in!sourcing!our! products!responsibly,! we!follow!robust! policies!and! procedures,!and! maintain!honest! relationships!with!our! suppliers.!For!many! years,!we!have!helped! suppliers!to!build! sustainable!businesses! –!commercially,! ethically!and! environmentally!–!and! provide!longFterm,! satisfying!employment.’!!! John!Lewis!also!have!a! sourcing!Code!of! Practice!which!sets!out! the!Partnership's! expectations!of! suppliers,!so!they!can! work!together!to!make! realistic,!long!term! improvements.!!John! Lewis’s!Responsible! Sourcing!Code!of! Practice!covers!the! following!areas:!pay,! working!hours,! working!conditions,! health!and!safety,!child! labour,!forced!labour,! employee! representation,! equality!of!treatment,! environment,!animal! welfare! !(Responsible&sourcing,! 2014)

employee!ownership.!This!year!84,700,!Partners!received! a!bonus!of!17!per!cent,!equivalent!to!nearly!9!weeks’!pay,! which!has!which!has!contributed!to!John!Lewis!being! awarded!‘Most!Attractive!Potential!Employer’!by!Ranstad.& (John&Lewis&Sustainability&report&2013)&!

!However!questions!could!be!asked!as!why!celebrate!the!

store's!business!model!when!it’s!famed!generosity!does! not!extend!to!it’s!outsourced!and!lowFpaid!cleaners.! These!3,000!people!share!no!bonuses!and!are!excluded! from!the!magic!circle!of!John!Lewis!staff!who!enjoy!not! just!the!proGits!but!all!manner!of!sports!clubs!and!leisure! activities.!For!two!and!half!years!now!London!Citizens! have!been!organising!and!campaigning!on!behalf!of!John! Lewis!cleaners!as!part!of!its!living!wage!campaign!for!the! low!paid.!Most!are!on!£6.08!an!hour.!The!aim!is!to!see! them!embraced!back!into!the!Partnership!with!the!same! holiday,!sick!pay,!pensions!and!staff!discount!as!the!other! employees!and!eventually!to!be!paid!the!London!living! wage!of!£8.30!which!even!some!full!partners!still!don't! earn.!(Toynbee,&2012)!

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More!recently!the!group!has!also!reinforced!it’s!ethical! stance!on!animal!welfare!as!it!joins!other!retailers!in!no! longer!stocking!angora!wool!products.!! !

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Words By Ellie Sharpe

In!2012!John!Lewis!aligned!itself!well!with!the!spirit!of!the!Olympics!in!a!thoughtful! sponsorship!and!this!year!had!the!opportunity!to!demonstrate!its!discerning!credentials! again!in!sponsoring!the!Commonwealth!Games!in!Glasgow.!Such!choices!help!to!reinforce!one! of!the!partnership’s!core!values!of!integrity!and!trust.&(Mintel&2014)!

Future Strategies John!Lewis!is!preparing!to!almost!double!in!size!over!the!next!decade!as!well!as!launch!a! French!website.!

Figure!4 !John!Lewis!is!likely!to!open!a!store!outside!of!the!UK!within! the!next!decade!as!part!of!it’s!growth!plans!which!will!see!the! retailer!almost!double!in!size.!By!2023,!Mr!Street!(Managing! Director)!said!that!John!Lewis!is!likely!to!have!65!stores,! compared!to!40!at!present,!with!annual!revenues!increasing! from!approximately!£4bn!at!present!to!£7bn.!!(Ruddick, 2014)!

!John!Lewis!is!also!looking!to!enter!the!youth!fashion!market!

Figure!5

Figure!6

by!introducing!young!brands!into!it’s!womenswear!and! menswear!departments.!The!department!store!is!aiming!to! attract!a!younger!shopper!than!it’s!current!30F50FyearFold! demographic,!in!order!to!avoid!being!left!with!only!an!ageing! customer!base.!It!is!understood!that!it!will!‘test!the!waters’! with!a!selection!of!denim!and!streetwear!brands!in!some! stores!as!part!of!a!dedicated!young!fashion!area,!although!it! has!not!given!a!speciGic!timeframe!(Mintel&2014)!Within!it’s! magazine,!‘Edition’!and!‘Fashion’!it!has!already!begun!to!use!a! younger!model!(see!Figures!4F6)! John!Lewis!is!poised!to!step!up!its!focus!on!storeFbased! omnichannel!projects!next!year!in!a!bid!to!make!its!customer! offer!even!more!personalised.!John!Lewis!has!been!rolling!out! transactional!tablet!devices!to!store!staff,!but!has!also!now! developed!an!‘app’!that!will!help!them!sell,!and!which!will!be! used!to!collect!data!on!inFstore!buying!habits.!Store!staff!will! use!the!tablets!to!help!shoppers!decide!what!to!buy,!and!the! data!trail!will!be!collected!in!the!same!way!as!it!is!when! shoppers!buy!online. (Harrison, 2014) !

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Words By Ellie Sharpe

SHOP APPRAISAL JOHN LEWIS

‘Collection by John Lewis’ The!price!range!of!the! collection!starts!at!£35.00,! which!is!the!cheapest,! (however!this!was!a!sale! price.)!The!most!expensive! dress!is!£90!.00.!The!price! brackets!on!the!website! indicate!the!difference!in!the! pricing!of!the!garments!(£0F £49.99,!£50F!£69.99!£70F £90).!(COLLECTION&by&John& Lewis&(35),!2014!

Sizing ‘Collection!by!John!Lewis’!

offer!dresses!in!a!size!8!–!18! and!there!are!no!petite!or!tall! range!offers!within!the! collection.!

Colour Choice The!colour!choices!of! all!twenty!nine! dresses!is!very!limited! and!seems!to!follow!a! monochrome!theme! with!very!few!other! colours!options!e.g.! red!and!blue.!However! there!was!only!a! single!dress!in!these! colour!options.!!The! collection! predominantly! consists!of!the!colours! grey,!black!and!white.!!

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!! As John Lewis department stores and website sell a variety of concession collections including, Fat Face, Mango, Ted Baker and Whistles, for the shop appraisal ‘ Collection by John Lewis’ (John Lewis’s own brand) and in particular the range of dresses that this collection offers was investigated. The website shows that there are twenty nine collection dresses sold online, however in store there is a much more limited range and the level of choice is narrowed to only a few. Eight of the dresses within the collection were examined and found all to be of a similar style and shape e.g. the majority of the dresses have a nipped in waist. In the store garments are placed in

Words By Ellie Sharpe

!! !sections!which!are!relatively!small!and!hold!a! maximum!a!of!about!twenty!Give!different!garments,!of! which!Give/six!of!these!are!dresses.!The!collection!is! easily!identiGiable!within!the!store!and!the!garments! appear!well!styled!and!in!a!good!position!within!the! store.!The!store!and!website!are!easily!navigable!and! online!it!is!simple!to!search!for!speciGics!e.g.!brand,! garment!type,!colour.!!

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The!labelling!and!branding!for!the!‘Collection!by!!! John!Lewis’!is!very!simplistic!and!quite!basic;!it!!!!! consists!of!a!plain!white!small!rectangle!shaped!!!! label!with!‘Collection!by!John!Lewis’!in!black!!!!!!!!!! writing.!The!back!of!each!label!is!personal!to!each! garment!and!includes!information!which!includes! garment,!name,!price!and!a!barcode.!The!overall! quality!of!the!garments!within!the!collection!is! high;!the!garments!appear!well!made!and!well! tailored.!!

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Garment!Analysis!! The!Garment!is!an!ombre!print!silk!dress!(see! Gigure!7)!from!‘Collection!by!John!Lewis’.!The! dress!retails!at!£89.00!and!is!available!in! standard!UK!women’s!sizing!8F18.!The!dress!is! made!in!a!shift!style;!knee!length!with!a!round! neck!and!a!short!sleeve.!The!garment!is!made! from!100%!silk!with!a!100%!polyester!lining,! and!is!a!printed!ombre!style.!! The!garment!care!instructions!give!the! information!that!the!dress!is!hand!wash!only.! The!country!of!origin!of!the!garment!is!not! evident!on!either!the!garment!or!website.!! John!Lewis!describe!the!dress!on!the!website!as!!

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‘Perfect!for!date!night!or!cocktail!hour,!this!

Figure!7!

shortFsleeve!style!boasts!a!contemporary! ombre!print!throughout,!and!is!crafted!from! luxurious!silk!for!a!sophisticated!appeal.!! Finished!with!a!cinched!waist!and!handy!! pockets,!team!with!heels!and!a!bold!lip!for!an! enviable!afterFdark!look.’! (COLLECTION&by&John&Lewis&&Animal&Print&Silk&Dress,& Multi,&2014)&

This!therefore!offersstyling!analysis!online!as! well!as!in!store.!(see!leaGlet!attached)!!

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Words By Ellie Sharpe

Bibliography, About,us!(2014).!John!Lewis!PLC!and!Tacit!Knowledge.!Available!at:!h@p:// www.johnlewispartnership.co.uk/about.html!(Accessed:!26!October!2014)." " A@wood,!K.!(2007)!‘John!Lewis!and!the!taste!of!success’,Business,Analysis,&,Features,!11! December.!Available!at:!h@p://www.independent.co.uk/news/business/analysisQandQfeatures/ johnQlewisQandQtheQtasteQofQsuccessQ764387.html!(Accessed:!15!November!2014)." " Burke,!M.!(2014)!‘Watch:!Monty!the!Penguin!stars!in!John!Lewis!2014!Christmas!advert’,Finance,!6! November.!Available!at:!h@p://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/ 11212166/WatchQMontyQtheQPenguinQstarsQinQJohnQLewisQ2014QChristmasQadvert.html!(Accessed:! 11!November!2014)." " COLLECTION,by,John,Lewis,(35)!(2014).!Dresses!|!COLLECTION!by!John!Lewis |  Women |!John!Lewis.!Available!at:!h@p://www.johnlewis.com/women/collec_onQ byQjohnQlewis/dresses=newinproduc@ypeQcollec_onbyjohnlewisQ1517/c600002452!(Accessed:!28! November!2014)." " COLLECTION,by,John,Lewis,Animal,Print,Silk,Dress,,MulJ!(2014).!Buy!COLLECTION!by!John!Lewis! Animal!Print!Silk!Dress,!Mul_!|!John!Lewis.!Available!at:!h@p://www.johnlewis.com/collec_onQbyQ johnQlewisQanimalQprintQsilkQdressQmul_/p1612185!(Accessed:!28!November!2014)." " Fiori_,!J.!(2014)Department,store,rivals,fail,to,compete,with,John,Lewis’s,online,strengths.,Verdict.! Department!store!rivals!fail!to!compete!with!John!Lewis’s!online!strengths.!Available!at:!h@p:// www.verdictretail.com/departmentQstoreQrivalsQfailQtoQcompeteQwithQjohnQlewissQonlineQ strengths/!(Accessed:!18!November!2014)." " Harrison,!N.!(2014)Retail,Week,Live:,‘Omnichannel,will,trump,pureUplay’,,says,John,Lewis,boss, Andy,Street.!Retail!Week!Live:!‘Omnichannel!will!trump!pureQplay’,!says!John!Lewis!boss!Andy! Street.!Available!at:!h@p://www.retailQweek.com/topics/retailQweekQlive/retailQweekQliveQ omnichannelQwillQtrumpQpureQplayQsaysQjohnQlewisQbossQandyQstreet/5058336.ar_cle!(Accessed:! 19!November!2014)." " Hounslea,!T.!(2014)John,Lewis,weekly,sales,br...