In praise of the John Lewis Partnership

March 2010

It doesn’t seem that many years ago that John Lewis was lumped together with the few other department store chains in the UK and viewed as an ageing dinosaur. These years were when ‘etail’ really started to take a hold on UK shopping habits and the high street showed signs of long-term decline. But anyone who shared those thoughts at the time has been more than proved wrong, and recently demonstrated by the group’s rise in annual pre-tax profits for 2009 of 9.7% to £306.6m. And if you work for JLP then that means you share in a tidy £151m payout – apparently this equates to each employee getting about 15% of their salary. Very nice.

So why is a seemingly traditional retailer (some have previously said old‑fashioned) performing so well in our digital age? I think there are three broad but key reasons…

1. Despite its often traditional feel – both John Lewis stores and Waitrose supermarkets – JLP is actually very forward thinking. What it doesn’t do though is compromise its core values (which I’ll come back to) in order to achieve any developments in its business. This forward thinking allowed it to not only develop a superb ecommerce site, but one with a supporting infrastructure and subsequent fulfilment as good as pretty much anyone’s. What they didn’t do is make a big song and dance about it, but then that wouldn’t be John Lewis’ way to do so…
2. Having successfully developed a strong ecommerce offer for both the department store and grocery side of the business, JLP has been especially good at getting its customers to use both – so true multi‑channel retailing. Recent research by GSI Commerce International showed that retailers are typically losing 60% of their potential customers by not having a truly integrated offer – or at least not integrated in a customer sense. Although no actual figures are available for JLP, their commercial director, Andrea O’Donnell, says: “Our research shows that virtually all our online customers also shop in our branches. John Lewis uses a range of techniques to ensure that we are there when our customers are looking for products and services that we sell.” I think it also has a lot to do with brand loyalty (which I’ll also come back to) but you still have to deliver your promise and deliver it consistently – which JLP do.
3. If you’ve ever shopped in a John Lewis department store, taken a delivery from one of their drivers, phoned their call centre, or shopped in a Waitrose supermarket, you’ll know what I mean here: There’s a sort of calm, patient and genuine sincerity that comes across – and no competing retailer can touch them on it. Although the relative impersonal nature of the website – the fault of the channel not the owner of this one – can’t of course convey the same emotions, it isn’t a bad experience at all and you still get a sense of the brand you’re dealing with. So how do JLP achieve this enviable level of genuine customer service and positive experience? Well I guess the unique ‘partnership’ structure of the business has a lot to do with it (that 15% payout would have motivated me if I were working for them), but actually I think the core values the business has, and has always had, are a lot to do with it. And the relevance of such values in today’s society around decency, fairness and knowledge? Well I for one find it pretty refreshing, and my guess is for others experiencing it for the first time (e.g. those that have grown up in the digital age) it will come as a complete revelation.

Put those three broad things together and it’s no surprise that JLP is performing well and, what’s more, will continue to in the decades ahead. They’ve built a level of brand loyalty which many other retailers can only dream about, and younger consumers trying them for the first time will realise that actually proper customer service on the high street isn’t just something their parents moan on about as something long dead and gone.

When I think of JLP I think of something an old friend and business colleague said to me a few years back: “I’ve been having problems sleeping so went to John Lewis to buy a better pillow, which I got and was even served by a ‘pillow expert’. Where else could you go to get that?!” And he was right of course.