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John Lewis expects to be a 60% online retailer from 40% pre-COVID-19

Tom Bottomley
30 July 2020

In a company update to all John Lewis Partners, chairman Dame Sharon White has today revealed that she expects the retailer’s online focus to increase by 20% from pre-coronavirus levels as it navigates the new retail landscape.

The letter reads: “We have two of the best loved and trusted brands in the UK, rated highly for our personal service and expert, impartial advice. Customers are, however, shopping in very different ways – younger people especially – with the pandemic accelerating the importance of digital. We expect John Lewis to be a 60% online retailer, from 40% pre-Covid-19, and Waitrose to rise above 20%, from 5%.

We now need to be as compelling and meaningful to the next generation of customers and how they want to live.

“As customers increasingly shop online, we will become digital first. We have ‘catch-up’ investments to make in”

The emphasis will also be on “making shopping easier and more convenient”, while investing in availability in store and online. Further strategic emphasis will be placed on the “useability and personalisation” of apps and websites, better rewards for the retailer’s most loyal customers, online personal services, convenient pick-up - like the 505 Co-op stores offering John Lewis Click & Collect - and introducing John Lewis into Waitrose.

Conducting a thorough review of performance, how it is delivering for customers and how it is comparing to its competitors, White stated the retailer had listened to feedback from more than 10,000 customers and more than 100 suppliers.

John Lewis

Dame Sharon White

She said: “I have been blown away by the number of Partners who have got involved – over 12,000, with more than 650 ideas submitted.

However, “simplifying how we work” is another key objective, “taking out duplication and cost.” Having already reduced the number of senior managers by one third, White said: “We are still targeting at least £100 million of savings in head office costs,” hinting at further redundancies. White confirmed: “These are very difficult decisions and I deeply regret the personal impact on Partners.”

A recent note specified that “resizing and regrowing” the Partnership is the way forward for the company, and White’s latest update added: “We will continue to develop our new purpose with customers and Partners in the coming weeks, and finalise it in the autumn.”

Acknowledging “testing times”, with profits this year and next likely to be challenged, White emphasised the ability for the Partnership to take a long-term view and the strategic review should “see green shoots in performance over the next 9-12 months, and profits recovering over the next three to five years.”

Another growing priority for its customers centres around the issues of “Rental/Resale/Recycle.” Options include creating a market leading channel for rental of its products or building a marketplace to sell ‘used’ products.

With customers more thoughtful about the environment, White added the company want to make it easier to shop sustainably, with clearer information about the origins of its products and supply chain - building on the fashion buyback and ‘Unpacked’ trials.

As flagged in March, John Lewis is also reviewing its “Never Knowingly Undersold” price promise to ensure it offers “fair value for how our customers shop today.”

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