IMG_0245 copy‘Alfred’ demo’oing their app at the connected JLAB flat last night.

John Lewis is 150 Years Old!

The John Lewis company is 150 years old this year.

Born in 1836, John Lewis grew up in Shepton Mallet and was apprenticed to a linen draper in Wells at the age of 14. He came to London and became a salesman for Peter Robinson, a well-known Oxford Street draper.

In 1864 John Lewis turned down the offer of becoming a partner in Robinsons and instead opened his own new shop at 132 Oxford Street, selling silk, wool and haberdashery.  On the first day he took 16s 4d!

By all accounts, he was an austere Victorian business who expected a lot from himself and his employees. But while most drapers of the time worked to a 33% profit on sale price, Lewis chose to make a profit of just 25% on his selling prices and insisted that his customers benefit from the good purchase price negotiated by his buyers.

lewisfatherandson

Lewis’s son, John Spedan Lewis, was born in 1885 and joined the family firm on his 21st birthday in 1906.  He received from his father a quarter of the John Lewis business, valued at £50,000 – a tidy sum in the Edwardian era.   Spedan Lewis became a director of Peter Jones Limited which had been acquired.  Along with his father and brother, Spedan enjoyed an income of £26,000 a year – again, a huge amount in those days.  He became increasingly uncomfortable that this income was considerably more than the entire wage bill for the company’s workforce of over 300 people, which was only £16,000.

After a riding accident in 1909, Spedan had to convalesce for two years and during that time thought deeply about business and society.  In January 1914 John Lewis senior handed over managerial control of Peter Jones to Spedan, who shortened the working day by an hour and started to pool commission for staff.  He also introduced frank two-way communication with his workforce, with staff committees with elected representatives.

Over the next four decades he developed his unique form of industrial democracy that was and is the John Lewis Partnership – the largest example of employee-owned business in the UK. The Partnership now has a turnover of £10bn and some 91,000 Partners across John Lewis (with 41 shops, since York opened last week) and Waitrose (with 300 branches).

Spedan summed up his philosophy as:

“The Partnership’s supreme purpose is to secure the fairest possible sharing by all its members of the advantages of ownership – gain, knowledge and power; that is to say their happiness in the broadest sense of that word, so far as happiness depends upon gainful occupation.”

I always say that if you want a stretching business goal, that is one – and one we strive to live up to in the Partnership, with our democratic Partner Voice and our restless innovation like JLAB.

“What would Spedan do?” is a good challenge about any initiative.

I think Spedan’s values are as valid and challenging today as they were in 1914 or 1954.  What we are constantly working to do is to make them relevant to a modern world being revolutionised by technology.  The way we all shop has changed dramatically in the last decade and will, I believe, change even more dramatically in the next.

But the values of the Partnership endure and are what customers value in the Partnership. They are as relevant in 2014 as they were when Spedan formulated them after his accident, which is why I love this ad from 2012:

What’s Important Doesn’t Change

Never Knowingly Undersold since 1925

In Store | Online | Mobile

 

Customer Trends for 2014-15

This post isn’t all about JLAB but I am pleased to say that the interest continues at a high level in the media and from potential entrants.

With JLAB in mind, I’ve been thinking about the prominence of technology and innovation as the engine of changing times for retail in the UK.    At the Retail Week Awards last Thursday, for instance, Chris Brook-Carter of Retail Week  said in his introductory speech:

‘Have the rules that define British retailing changed irrevocably under the cultural and economic forces that have driven the recent evolution of consumer behaviour?   Rapid digitalisation, combined with a reappraisal of financial norms, has broken down old barriers but opened new pitfalls too.   The Oracle Retail Week Awards is more than a roll call of the leading achievements in the industry. It is a window into the industry’s development. Those looking for themes this year will note how closely the roster of winners reflects the opportunities these changing times have given birth to.’

John Lewis was fortunate to be recognised as the Multi-Channel Retailer of the Year for the second year running.

Rather than reflect on the past, I thought we should look ahead.  So I had a word with John Vary, our Innovation Manager and JLAB leader, about what are the Mega Trends for Customers in 2014-15.  This is what he came up with, with a few thoughts thrown in by me:

1) Multiple touch points

We are increasingly expecting things which interact with all our senses, offer us a range of touch points to play with, and involve us  in immersive new experiences – see larger HD TVs and game consoles.

2) Hyper-efficiency

We are seeking ever-smarter and more efficient ways to solve age-old issues such as keeping fit, lack of space and, most of all, limited time – see wearables and home control technology like Nest.

3) The open industrial revolution

Science is no longer a closed world, just for us geeks. Digital and technological advances are enabling more of us to create in new ways, perhaps giving us a new appreciation of the digital hardware and apps as things of beauty – see the iPods, iPhones, iPads, brilliantly designed and sold to millions.

4) Escape

In a world of austerity and grown-up responsibilities, consumers have an increasing desire to let go, let loose and indulge in child-like escapism – see GTA and Candy Crush on everyone’s mobile.

5) Mindfulness

In a world full of hype and surface interactions, people are seeking depth and meaning. They are craving time away from the always-on stimulus of the media, making their leisure time more about self-development – see learned groups on Twitter discussing The War of 1812, Norfolk wildlife, crows and everything else…..

6) Super personalisation

Personalisation has been taken out of the hands of consumers. So it’s not just the bespoke products you select – it can be the bespoke products that find you. Advances in technology mean that producers are increasingly able to know consumers and give them what they want – see most retail web sites these days.

And finally, here is a rather jolly picture from the Retail Week Awards last week:
1317451_Postcode_Anywhere_Multi_Channel_Retailer

JLAB’s First Week

Since we launched our retail tech innovation incubator – JLAB less than a week ago, its been a sensational week.  We have had a staggering 78 full submitted applications so far!  The closing date is 17th April so there is still plenty of time.

The media interest was more than we had expected – here’s one example http://www.express.co.uk/finance/city/462623/John-Lewis-set-to-invest-in-start-ups-in-search-of-high-tech-shopping-solutions

and there were a host of other stories in the nationals and  in the specialist online and retail media.

I am sure the visibility of John Lewis in the media with our results and the 15% bonus for all 91,000 Partners in John Lewis and Waitrose has helped JLAB get off the ground.  It was the week that John Lewis overtook Marks and Spencers, the Guardian reported:

A decade ago, sales at John Lewis Partnership were just £5bn, while M&S was in a different league with around £8bn. Those lines have now crossed. The most recent figures available show M&S’s UK business turning over £8.9bn last year, compared to the £9bn John Lewis and Waitrose achieved this year. M&S is not expected to eclipse John Lewis when it publishes more up-to-date figures in May.

I was wondering what our founder John Spedan Lewis would have thought of all of this.  In relation to last year’s results, I am sure he would have counselled caution modesty and concentration on what our customers want.

Spedan was himself a radical innovator in business, social, retail and zoological matters.  His greatest innovation is of course the John Lewis Partnership owned by all of us who work here.  But perhaps less well known are his restless desire to try the new – buying carpets direct in India, starting a university for Partners after the War, setting up a chocolate factory, sponsoring the British Chess Federation when it needed a home in Oxford Street, setting up maternity leave, worrying about affordable accommodation for Partners and cheering up gibbons from London Zoo on his estate on the River Test.

I also hope he would have liked JLAB, it feels like the sort of thing he would have liked.  Something that builds business, helps people develop their skills and capabilities and with a bit of luck and hard work, makes money.

John Lewis Launches ‘JLAB’

Screenshot 2014-03-02 09.43.09

As part of our 150 year celebrations, John Lewis has launched its first ever technology incubator ‘JLAB’, in a partnership with technology entrepreneur Stuart Marks.

The purpose of JLAB is to identify and develop technology innovations that will provide John Lewis with future strategic advantage with customers’ needs at the core of each idea.

The incubation period runs from June to September – JL and Stuart will work together to select five start-up companies who will be based within JLAB during that time.  When they are at JLAB, businesses will rapidly develop their products and solutions, supported by a team of John Lewis leaders and external mentors.

Three main areas will form the framework for innovation:

  • Helping customers shop: in-store innovation, customer experience across all channels (e.g. self service product info and prices) and technology-driven customer inspiration
  • Simplifying customers’ lives: innovation around the “Internet of Things” (how all devices will communicate together, enabling a more connected home)
  • Knowing each other: using data to drive real-time, in-store personalisation for customers, provided they want it.

The John Lewis Partnership’s founder, John Spedan Lewis, was a radical entrepreneur and so adopting a novel approach to business and retail innovation is not new to JL.  It’s a fundamental part of the Partnership’s DNA.

If anyone wants to be part of JLAB, you can apply on http://www.jlab.co.uk.  The closing date for submitting ideas is 17th April 2014.

Spedan Lewis c1904 300dpiJohn Spedan Lewis c1904

Omni Channel Retail – Right Here Right Now this Christmas

IBM posted five predictions for the next five years, which is a great New Year’s game – and all credit to them for sticking their necks out.  Everyone should play this game.

Bernie Meyerson, vice president of innovation at IBM, came up with their “5 in 5″.  Apparently, this is the eighth year in a row that IBM has made predictions about future technology.

“We try to get a sense of where the world is going because that focuses where we put our efforts” Meyerson said.  He continued “The harder part is nailing down what you want to focus on. Unless you stick your neck out and say this is where the world is going, it’s hard for you to turn around and say you will get there first. These are seminal shifts. We want to be there, enabling them”.

These are Meyerson’s “5 in 5”:

▪                The classroom will learn you (sic)

▪                Buying local will beat online

▪                Doctors will use your DNA to keep you well

▪                A digital guardian will protect you online

▪                The city will help you live in it.

I’m not sure what this means for grammar in the future, but Meyerson says some very interesting things, and I would judge predictions 1, 3, 4 and 5 to be pretty much on the money.

However, I do have experience in online selling and retail, and so I would take issue with his second proposition:

“In five years, buying local will beat online as you get online data at your fingertips in the store.”

Meyerson argues that “retailers will use the immediacy of the store and proximity to customers to create experiences that online-only retail can’t replicate”.

I would agree with that – but this is not, in my view, something for five years in the future.  Meyerson says that “the Web can make sales associates smarter, and augmented reality can deliver more information to the store shelves”.  He suggests “the store will ask if you would like to see a certain camera and have a salesperson meet you in a certain aisle where it is located”.

This is not, in my view, a future issue but is in many respects with us here and now.  What many – perhaps most – shoppers in the UK wanted to do over Christmas was to shop “omni-channel”.  Many of us when buying gifts or things for the house, or indeed clothes, want to research in-store – to bounce on a mattress, say, or look at a high definition television.  We want to see and test some products and get expert advice. After that, we may decide to buy there and then from the store.  Or we may prefer to go back home and buy online.  Or sometimes it’s the other way round: we want to do our research online first, and to check prices, and then go out and buy the product in our hands in the store.  Increasingly many of us like to order online then “click and collect” to pick up in store, where we may well buy other products too.

So this is not a future thing, but once which is happening here and now; and competition between shops and online – between “bricks and clicks” – is just not the way forward.

At John Lewis we estimate that at least 2/3rds of our customers are already “omni” – that is, they shop in some way (e.g. research) across online, in stores, on the phone and on mobile devices.  This development has helped drive our sales on johnlewis.com and in our stores: our like-for-like sales were up 6.9% over the 5 weeks of the  with online up 22.6% and stores also up 1.2%.   The “click and collect” sales jumped 60% compared with 2012.

There have been 3 weeks around Christmas and the New Year when our online sales jumped to c36% of the total we had passed £1billion online sales for the financial year (from 1st Feb) before we got to Christmas.  We know, however, that this is absolutely not  about online shopping – it’s about the ability to shop across all our John Lewis channels.

Human beings sometimes want to get information and advice from other human beings, sometimes they want to pick up the phone, and other times they just want to shop online with simple clicks.  And sometimes they prefer to shop now and then pick up at a time next day that suits them, rather than wait in for a van to deliver.  It’s about us all being different and having different needs when we shop.

“It has been physical against online” Meyerson says, “but in this case, it is combining them.”  So he’s right – not about 5 years in the future, but about the here and now.

As an Airline, which Retailer are you like?

On the 18-20th June, airlines at the Air Transport IT Summit will be reflecting on how IT can help them boost their profitability and efficiency, and bring about better ways of working. As Chair of SITA, the air transport provider, I will be host at the Summit.

Among the many topics, ancillary sales will be one area under scrutiny at the event. With the airline industry as a whole just about achieving profitability in tough conditions – including slowing economic growth and rising oil prices – ways of boosting revenues through retailing are clearly high on the industry’s agenda.

I believe there are real opportunities here for airlines. Ancillary sales are claimed to have delivered as much as 5% of global airline revenues in 2012, according to estimates from IdeaWorksCompany. At the same time, 100% of airlines now have a presence online in the ‘virtual high street’, selling through their web sites, according to the Airline IT Trends Survey by SITA and Airline Business.

So many airlines are focused on ways of increasing retail revenues. In addition to the web, airlines now have new passenger systems, big data, social media and other new technologies at their disposal, which can enable them to become much more effective air transport retailers.

What do I mean by this?  Airlines will be able to make personalised offers to passengers, presenting an array of additional products and services that can be bought and making recommendations to customers in ways similar to Amazon and other retailers. There are opportunities to up-sell and cross-sell every time a passenger interacts digitally with the airline. Harnessing social media and big data will also enable airlines to look beyond their immediate loyalty programmes and target other potential customers with customized smart offers.

But I have a word of caution. While the technologies are definitely there to enable increase retail activity, airlines need to be sure of what their customers will or won’t find acceptable when they receive a targeted offer. There are boundaries. So before you embark on this journey of ‘retail enablement’, as an airline find your retailer analogy and ask yourself: which retailer are you like?

The topic will be discussed in detail in the next issue of Air Transport IT Review, to be available at the time of the Air Transport IT Summit.  

You can join the conversation on the Linked In ‘Air Transport Information Technology’ group. 
http://www.linkedin.com/groupItem?view=&gid=4443272&type=member&item=240648445&qid=55bb10fc-c497-42ef-a981-8dd3d6f31719&trk=group_most_recent_rich-0-b-ttl&goback=.gsm_4443272_1_*2_*2_*2_lna_PENDING_*2.gmr_4443272.gde_4443272_member_240648445.gmr_4443272

And you can follow this year’s IT Summit at #ATIS2013

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