audit report
Table of Contents 1. Values 2. Timeline 3. Adoption Theory Diagram 4. Examples of John Lewis customers 5. SWOT 6. PEST 7. Competitors analysis 8. Perception map 9. Finance 10. Clothing line brands 11. Sustainability 12. Evaluation
Brand history Founded in 1864 by John Lewis, the high end department store is a well established brand name in British households. There are 50 John Lewis stores and 353 Waitrose stores as of 2019. The chain has promised since 1923 that its is never knowingly undersold, which it still upholds today. John Lewis started as a small silk drapery store, Spedan the eldest son than acquired a second store known as "Peter Jones" located in Sloane Square, London. He then took over John Lewis in 1920 after his father’s death during his time managing Peter Jones. He improved the standards for employees and experimented with the idea of a employee- partnership which later became a success. In 1933, the partnership then acquired the established department store "Jessop & Son" in Nottingham, then rebranded as John Lewis in 2002. The Oxford Street shop is the flagship store, in 1953 it was rebuilt entirely after being destroyed in the Blitz. In the unforunate circumtances the merchants from John Lewis would turn to selling on the streets to keep the business running. On the 1st of January 2008 it was awarded with a Royal Warrant from Queen Elizabeth as suppliers of haberdashery and household goods, in the past John Lewis products have been purchase by Royalty. The first Christmas advert was launched in 2007 and since then has become a yearly anticipated tradition, and a sign that Christmas is close.
VALUES "Never undersold unknowingly." On the website customers can submit lower prices they found on the highstreet. John Lewis also hire a price-monitoring team. So If a local high street competitor within 8 miles of one of a stores has a lower price, the price is dropped to meet that of the competitor. "When you're part of it, you put your heart into it" John Lewis appreciate their staff members, and the various skills and stories they offer. John Lewis is in a partnership with Waitrose. The JLP is the largest employee-owned company and currently there are 83,900 members. Staff are in control of how business is conducted, using Spedan Lewis’ principles on how the business should be operate. Partners benefit from employee ownership as the profit is divided, and can contribute in a democracy through a weekly newspaper and the local Gazette. Staff benefits are not limited to shared profit, but a community. Discounted holidays from 5 resorts in UK, art classes, music society, horse riding, skiing and sailing. This model built by Spedan Smith helps gain the loyalty of staff. "John Lewis & partners is more than a name. It means we're all owners, committed to giving you, our customers, the highest quality products and service." Paula Nicolds; partner and managing director
timeline 1928 John Lewis dies, Spedan in charge
1960 John Lewis Flagship in Oxford street is finally rebuilt after the Blizt
1864 Opened in 1864, Oxford Street as a silk drapery store
1905, "Peter Jones" previous name in Sloane Square is took over by eldest son Spedan who experiments with employee ownership and improves staff conditions. Is successful.
Robin and Lucienne Day
1920, John Lewis workers go on strke for better pay, co ownership with Spedan.
1933, first store "Jessop & son" launched outside of London in Nottingham Launched own brand Jonelle in 1937 changed to "John Lewis" in 2001
1963 Spedan Lewis dies designer couple Day take over as design consultant and rebrand John Lewis and logo
2014 relaunch of the popular “Daisy Chain” fabric as fashion range 1990, diagonal motif created 2019 2002, Rebranded as John Lewis
2007, first christmas ad was launched, later becoming iconic to UK households. Teamed up with adventising agency Adam and Eve
2018, rebrand to John Lewis & Partners with Waitrose
2007, huge refurbishments £60 million investment
Christmas Ad 2016
Previously “Peter Jones” Nottingham
Adoption theory diagram of a typical John Lewis customer
45-65 Typically middlehgh income
Innovators
Early adopters Early Majorty
Late Majority
Laggards
"Laggards are traditionalists and the last to adopt an innovation. Possessing almost no opinion leadership, laggards are localite to the point of being isolates compared to the other adopter categories. They are fixated on the past, and all decisions must be made in terms of previous generations. Individual laggards mainly interact with other traditionalists. An innovation finally adopted by a laggard may already be rendered obsolete by more recent ideas already in use by innovators. Laggards are likely to be suspicious not only of innovations, but of innovators and change agents" as well "(Rogers, 1971)
Pen portraits/ sample customers Julia British 67 years old Been married for 7 years and recently retired from teaching at a secondary school Home income of ÂŁ80,000 a year, lives in comfort. Likes wine and eating fine cuisine with her husband in Italian and seafood restarants. Sees her 2 adult sons every few months Is often abroad and has a holiday home in Cyprus. Buys swimwear and blouses from John Lewis
Maymun British/ Muslim 38 Married for 7 years. Has a 6 year old son, and a baby daughter. On maternity leave, her husband works as a surgeon. Home income of ÂŁ150,000, Her priority is to give her children the best opportunities possible. Looking to move property. Browses through John Lewis with her children to look for cookery ware and furniture Shops at Karen Millan, COS, And Other Stories for clothing. Shops for her children Polarn O Pyret and GAP.
SWOT anaylsis
Strengths Weaknesses Established nationwide brand Never knowingly undersold policy doesn't Employee-ownership received well work in modern times Known for good quality products A lot of stores discount so John Lewis Strong emotive advertising will have to also. Yearly Christmas campaign Not popular with younger consumers or gains attention. men. Good quality and designed fabric Doesnt apepal strongly to modern Successful partnership with Waitroseconsumers. Loyal customer base and employees In control of manufacturing supply chain Opportunities Appeal to the younger market by Introducing student discounts for instore beauty Intergrate more technologies in store
Threats Online shopping Other discounted stores nearby eg: Primark, Poundland. Fashion: Boden, Debenhams, Next.
Increase own brand products (a promise of increasing so by 50% in the future)
Home living competiors: IKEA Asda living. More TV ads aimed at the older demo- Failure of department store models in graphic. general since recent times.
PEST Politics: John Lewis is somewhat reliant on importing goods from abroad to meet customer demand. However, many John Lewis manufacturers are based in the UK so this is not a major concern. There is also the chance of needing the EU workforce in case of future skills shortage which could be an issue due to Brexit uncertainty, however this is a smaller concern. There are also potential of tarrifs changes if there are changes to EU policy.
Economy: The economy climate is strong in the UK, since unemployment is low and disposable spending has increased. On the other hand the cost of housing has increased so that younger customers are less confident in their buying power, and there is less demand for home items.
Society: Seamless shopping is more important than ever, online shopping experience must be as good as the in store experience for customer satisfaction. Customers also expect to get demanded products quickly and with ease, so staffs must be fully informed and trained to meet demands. Black Friday is an additional event in the UK and to keep up retailers particpate in discounted sales. Also generation Y are more likely to shop on their mobiles first before going to store, however the habit has expanded to older consumers. They are also more likely to look at online reviews or images of product. The pension population is large in the UK with 18% of the UK population is aged 65 and 2.4% 80 or over.
Technology: John Lewis app is avaliable on IOS and Android, there is also an instore iPad for delivery. Super market Waitrose has “quick check� for efficent and quicker grocery shopping. A service called The Gift List introduced an instore scanner that helps newly wed couples find ideal gifts together.
Key Competitors Strengths: Weaknesses: Traditional well Regarded as being "out of established brand. touch" and unfashionable to Big variety of products/ wear, departments sometimes seen as not including food. Known for affordable for the average good quality food in parlower income consumer. ticular. No strong USP. Loyal consumer base Opportunities: To introduce more technologies in store, to collaborate with younger influencers. Expand upon older markets 40-50 and 60-80 year old womenswear
Threats: M&S is in close competition with other good quality food services like Ocario, CO OP and Waitrose. Failure of department stores in general Internet shopping
Strengths: Weaknesses: Seen as more Doesn't have food fashionable and young- sector to compete with er brands and designer M&S and John Lewis. brands are available. There is a confusing Appeals to both women store lay out, and men. there is no distinguished There are regular sales USP. and discounts. There is no clear target consumer. Threats: Online shopping Opportunities: is a big concern and could Improve online lead to it’s dismay shopping for modern conas many sumers and be known forproducts can be found fast home deliveries. cheaper online. Introduce self check out Introduce more technolo- There are already rumours of failure and closure of gies in store, the store. Introduce more student discounts.
Strengths: Appeals to modern consumer who can browse quickly on phone. Next day delivery on prime highly appealing. Covers most necessities. Prices can be easily compared. Known for good discounts on technology/ beauty (add on products) Opportunities: To open more physical stores Start a take away delivery service. Cater more towards older consumers by offering tutorials, communities, classes.
Weaknesses: Can't see/feel product. Amazon fresh is relatively new and not well known. Miss out on older consumers who don't trust online services/ don't use technologies often. Not known for good quality or fashionable clothing. Threats: Brick and mortar has a personal touch, can interact with staff for questions and doubts. Consumers see shopping as a social activity and go to physical stores. Wish.com sells items online for half the price sometimes even FREE but at the cost of a longer delivery.
Perceptual map
Finances 2019: A struggle to pay yearly bonus for first time in decades, there is caution with staff bonuses because of plans to save for later difficult times. However John Lewis Partnership remains optimistic and the staff are aware of the circumstance. 2018 £298m profit (-21.9%) John Lewis issues warning on profits and staff bonus. No profit in the first six months of the year Sir Elton John was hired for £5 million to record Your Song at Pinewood Studios for John Lewis ad campaign
2017: There was a 22% drop in profit due to political uncertainty, and an inflation of british economy. There was an Increase e commerce in Amazon
2015 John Lewis Partnership now becomes the UK's best performing mutual, after snagging the top spot from The Co-operative Group.
Product Place Promotion Product
John Lewis and Partners offers a large range of products in Household items, cookery wear, clothing, electrical, garden, DIY, hobby and crafts, and beauty. The brand image is perceived to be conservative and traditional as it has an established older market. In recent years, John Lewis has expanded its own brand in the fashion department, most of products are for workwear, wedding/occassions,casual wear and accessories.
Price
The price is mid-range, on par with competitor Mark and Spencers. However the Never Knowing Undersold policy ensures that all items sold in John Lewis are the same as discount stores depending on the location. However this could be the stores demise as discount stores will also be competiting with online sales and will go cheap as possible, prices are always changing due to this.
Promotion
John Lewis promotes heavily during the festive period, lauching yearly christmas adverts trending discussions on social media like Twitter. The campaigns are highly creative and emotional, ads like "Man on the Moon" in 2015 “moved the nation to tears�. It tells the story of a girl who brings Christmas to a lonely old man living on the moon.
Brand pyramid for John Lewis & Partners Apparel (Womenswear)
Top range exclusive, promotional tool Main collection avaliable in large volume Diffusion collections massproduced affordable Fragrances, cosmetics, sunglasses, accessories licensed brand names, affordable
Top of range: Paul Smith, Helen McAlinden, Adrianna Papell, Gina Bacconi, Damsel in a Dress, Gerard Darel
Highest price ÂŁ550, Paul Smith Biker Suede Jacket.
Main ready to wear: John Lewis &Partners own brand, Oasis, Kin, Modern Rarity, Boden, AND/OR, French Connection, Jolie Moi, Karen Millen, Levis, LK Bennett, Lily and Lionel, Yumi, Mint Velvet, Jigsaw, Phase Eight, Pure Collection, Ted Baker, Warehouse,Fenn Wright, Four Seasons, Thought, Hobbs, WhiteStuff, Whistles.
Modern Rarity draped striped dress £120
The average price is £70, this is a mid-high price point, more expensive than a typical highstreet however the brands in the range are mid-range price, and the typical John Lewis customers would afford the products.
Diffusion collections; Collection WEEKEND, Mamalicious, Max Studio,PATTERNITY+ John Lewis, TOAST + John Lewis, chesca. . this is considerThe average price is £30, ably less than the main collection, however the collections are often for a smaller market; eg expecting mothers, plus size
Accessries and others: DAY et, J Crew, hush, Mulberry eyewear, Ted Baker, Clarks, Wacoal, White Stuff, Michael Kors, Coach, Radley, DKNY, DUNE, Jigsaw, Kurt Gieger, Katie Loxton, Karen Millen, Liberty London, Matt & Nat, LK Bennett. The average price is £20, this is the most affordable section, however there are mid-high price products as well as low priced. brands like mulberry and Coach are priced over £100.
Mamalicious nursing dress £45
DAY ET day Gweneth Punch Backpack Leopard £80
sustainability Policies Source and Sell with integrity: John Lewis and Partners source quality products from the UK and abroad working with the agents and contract workers. Suppliers are monitored in accordance to the Responsible Sourcing Code of Practice based on the ETI (Ethical Trading Initiative)
JLP are working on reducing plastic waste particuarly from hangers and recently introduced new carrier bags made from 70% recycled material, click and collect carrier bags also contain a minimum of 50% recycled content. Targets for reducing waste 100% of our own-brand timber and paper products will be from responsible and sustainable sources by year end 2020/21. 2017-2018: by volume 53%* by count 32%* Divert 100% of waste from landfill by year end 2020/21 2017-2018: 99% 75% operational waste to be recycled by year end 2020/21 2017-2018: 68% 100% closed-loop recycling of cardboard, plastic & glass by year end 2020/21 2017-2018: under review By year end 2020/21 we will achieve a 65% reduction in carbon intensity (tonnes per ÂŁm) against a 2010 baseline -69.6 % 2017 -JLP website
JLP works with retailer groups such as Stronger Together and the Food Network for Ethical Trade. The Waitrose Foundation supports workers in communities in Ghana, Kenya, South Africa and recently Costa Rica. The foundation aims to move into 12 countries by 2020. JLP has a scheme where customers bring in old sofas, a first non-profit service. The old sofa is collected from the homethen re used or recycled in partnership with local charities, the aim of helping the disadvantaged. Approximately 2,000 sofas have been reused 2018. Another scheme is the appliance disposal service where electrical waste and equipment is collected and if possible reused, put to good use or recycled responsibility. Approximately 300,000 items were collected where 27,000 were reused (2017/2018)
Overview: I think overall JLP are good in terms of dealing with impacts of the environment. The schemes they have set up are clever and easy for the customer to access. Also, from looking at the targets for reducing waste there are clear attempts and a concern for the environment, JLP is motivated to do better in the future. My criticism is to engage more with customers in regard to helping with environmental issues and offering information about it. Increase campaigns and informing why they are important. Programmes like Blue Planet are increasing understanding of sustainable issues in the older market, a good opportunity would be to start an sponsorship with Blue Planet.
Evaluation To avoid the demise of the department franchise, John Lewis need to quickly react to changes in the retail industry which has been the key to its success. In terms of “seamless shopping” John Lewis need to ensure that the customer service online is just as good as in store. Looking online I found many negative comments and complaints about delivery, product quality and customer service online. This reflects badly as there are no responses from JLP online to these complaints, and it is very likely that customers will click on the reviews before purchase. They should revise customer service, ensuring all staff are fully trained and informed on products and services. The partnership is a great idea and is working well as many regard Waitrose as a good quality service, so this helps elevate the overall image. However “the never knowingly undersold” policy is not working as this puts the business at a disadvantage, as online will always be cheaper with discounts and sales, all retailers will strive to compete with this. I also suggest establishing a Unique Selling Product; in the past John Lewis was known for selling good quality fabrics from the transitioning of a small silk drapery business. There is a gap in the market for this, so a good opportunity would to have an ad campaign reminding the audience of the history in fabrics and drapery and release new lines. John Lewis tend to have loyal customers of an older age who prefer traditional styles to modern, so this should be kept in regard. However, to attract modern customers JLP should consider introducing more in store technology and services to stay fresh in the mind of the consumer and to keep up with competition. Also to increase social media presence and respond to complaints and comments on platforms like twitter and facebook as this is where a majority of the customers will go to voice their thoughts. John Lewis should consider linking with younger brands in their clothing lines as many of the clothing are safe and aimed for the older consumer, but also expand upon the mature market as there is a gap in the market for those over 70, a brand could be introduced to cater this.
References: Diffusion of Innovation Theory: https://www.ou.edu/deptcomm/dodjcc/groups/99A2/theories.htm Employee ownership: https://employeeownership.co.uk/case-studies/john-lewis-partnership/ Values: https://www.johnlewispartnership.co.uk/about/our-values.html https://www.johnlewis.com/ps-paul-smith-suede-biker-jacket-grey/ p4075158 Helen Mclinden https://www.arnotts.ie/brands/helen-mcalinden/ Modern Rarity https://www.johnlewis.com/brand/modern-rarity/_/N-1z086j8 Phase Eight https://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjN_uuh5P_hAhUBDGMBHa8DBpMQjB16BAgBEAM&url=https%3A%2F%2Fwww. easyfundraising.org.uk%2Fretailer%2Fphase-eight%2F&psig=AOvVaw3qiMQc5WQQgE7kVDfo4luS&ust=1556987392222115 Mamalicious https://www.johnlewis.com/mamalicious-gail-lia-maternity-and-nursing-dress-salute/p3969649
