The last 15 years has seen retail transform into a cut-throat industry. In this time, some of the biggest retailers have disappeared because they simply haven’t been able to keep up with the incredible pace of change and the increasing demands of their customers. Conversely, some of the biggest retail brands of today didn’t even exist 15 years ago.
All this change has been driven by customers who want to shop differently. During his keynote at Customer Experience Tech Fest 2016, Simon Russell shared some of the key components that have made John Lewis, one of the oldest department stores in the world at 150 years old, the ongoing success that it is today. Here are 9 pieces of advice that Simon shared to help retailers keep ahead of their customers’ changing shopping habits.
1. Find alternate web platforms and new ways to deliver your product
In 2001 John Lewis bought the UK website buy.com under negative speculation. However, it allowed the company to buy a ready-made team and a platform to accelerate the online component. It was expensive to deliver products, so ‘click and collect’ was born – where goods were purchased online and driven between stores, allowing customers to collect their items from the outlet. It was cheaper than delivering to homes and customers bought more when they came to pick up their wares. It also allowed some of the smaller shops to sell a wider assortment of goods. Early on, the delivery vans had a few parcels on the front seat and now they fill an entire double decker trailer exclusively from click and collect purchases.
2. Invest in your own site as well
As well as investing in buy.com, John Lewis spent a significant amount of money upgrading its own website, particularly its functionality and additions such as a recommendations engine, ratings and reviews and increasing the number of SKUs. John Lewis’ website is now so effective that online sales now account for one third of all sales. Initially, the company had ups and downs online as customers’ needs changed focus, but this investment ultimately led to the transformation of the business.
3. Offer online, in store and multichannel experiences
Customers shop in three ways: in store only, online only, or both online and in store (multi-channel). John Lewis found that shoppers who purchased exclusively online or exclusively in store spent roughly the same amount and shopped 2-3 times per year. Staggeringly, the people buying both in store and online spent three and a half times more than the exclusive shoppers. Their frequency was greater, shopping about eight times, and they were more loyal. This dispels one of the great retailing myths – that if a customer buys online they won’t go into the shop.
4. Make your delivery fast and reliable
John Lewis created an in-house freight carrying service to avoid being let down by external services. ‘Click and collect’ moved from being an extension of the warehouse to forging brand partners and ‘click and collect’ zones in supermarkets. Business partnerships on a global scale, including a recent partnership with Myer in Australia, have allowed the company to become a truly global organisation that can deliver its goods all over the world.
5. Streamline your online and store policies
Is your pricing online different to your in store pricing? This is the situation that john Lewis found themselves in and they found that customers simply won’t stand for this kind of price discrepancy – if they are going to shop with you, they’re going to shop with you as a brand. John Lewis has now aligned its pricing so in store and online prices are consistent.
6. Invest in your stores
In all John Lewis stores, extras are provided for customers such as free WiFi (which became an opportunity to capture data). To bring the online stores to life, kiosks inside shops were installed so customers could view an extended range. Giving technology to staff is key, being clear about what the application being run (on any device) asking “why is this going to help staff help a customer?”. John Lewis is also dabbling in in-store services such as catering and travel agencies to keep things fresh.
7. Invest in your staff and bring them on the journey
In a world where it’s so easy to copy a business model, it’s very difficult for retailers to differentiate. But Simon believes staff is the one area where you can differentiate. In 2010, time was spent in every single John Lewis shop determining whether the direction being taken was appropriate. Staff were instructed that if any item was out of stock, or if it was a brand that the store didn’t stock, they had to take the customer and place an order online to close an order there and then. Still today, just under 50% of customers that are taken to terminal to place an order in stores have never bought on the website before. They’ve found that enabling this behaviour encourages further online shopping. To help encourage staff to shop in an omni-channel way, the staff discount could be claimed online and further training was provided for staff to ensure they had great product knowledge and digital skills. The key here is to be clear what your staff’s role is, empower them to act on their role, and provide them the right tools and training to do it.
8. Know your target customers in order to plan business
John Lewis invested a great deal of time researching their customers’ shopping habits so it was very clear as to who target customers were, including age profile, what they shop for, on which devices, and at what time of day. This has allowed them plan their business more effectively moving forward. Here is a graphic which illustrates just how extensive this research was.
9. Acknowledge that customer experience has changed
The retail industry is changing, but also customer experience is changing. John Lewis now focuses on trust and doing the right thing. There is more emphasis on love and how they can emotionally connect with customers. While it all may seem very “soft”, these values are translated into great experiences for John Lewis customers: make it easy for customers, reassure them that they’re doing the right thing and that you’re reliable, know them, value them and inspire them.
This is a summary based on Simon Russell’s Keynote address at Customer Experience Tech Fest 2016. You can download a recording of Simon’s full session “Winning Against The Best Brands in the World” below.