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.

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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

 

Success Online – It’s all about shops actually!

Here is another article from the Sunday Telegraph today, by Graham Ruddick:

‘Success online? It’s all about shops actually’.  John Lewis may have just cleared £lbn, but Mark Lewis, its new online director, only wants to talk about the retailer’s department stores.

“Hugely important, hugely, hugely important,” he says of the stores. “It would be a real mistake to view them as separate businesses. That’s not how we view them internally.” The reason for Lewis’s praise for the John Lewis stores – of which there are 39 in the UK – is the rise of 2.6pc in like-for-like sales at John Lewis department stores multichannel retailing, or “omnichannel” as John Lewis calls it.

“Multichannel” is probably the hottest topic in the retail industry. It is about offering customers a service across different retail formats shops, the internet, and mobile apps. The retailers driving a multichannel strategy believe that the winners in the industry over the next decade will be the companies that can offer customers the most convenient and seamless shopping experiences. To sceptics, multichannel is just a buzz word dreamt up by companies trying to justify their costly presence on the high street. But for John Lewis it is the core of their strategy, and it is working well. Lewis says that two-thirds of all John Lewis sales involve a customer interacting with its stores and website. In addition, one third of all online orders are now collected in John Lewis or Waitrose stores after a doubling in the retailer’s click-and-collect service in the past year. Store managers are not just accountable for sales in their stores, but also internet sales in their catchment area.

“Customers don’t view us as a store or a website,” Lewis explains. “They view us as John Lewis. “If you think about the world we are in now, it is more about customers choosing how they want to shop than retailers telling customers where their stores are. It is a different dynamic, it is being led by the customer. Our job is to follow that and stay ahead of it.” The rise of the internet has inevitably cannibalised some store sales, with the Peter Jones department store in west London understood to have been hit. But in the year to January 26, John Lewis not only recorded a 41pc rise in online sales, but also a 2.6pc increase in like-for-like sales in stores.

These statistics have helped John Lewis become the benchmark for multichannel retailing. “Omnichannel means we are there for the customers for how they want to shop, when they want to shop, in a way that suits them,” Lewis says. “That goes across the whole shopping experience, whether they are researching items, buying items, getting items delivered or collecting them. “This is fundamentally changing how retail has to run. If you look at the evolution, clearly stores have been around for an awful long time, then there were some pure-play online retailers, and then store retailers developed their own websites.

“Now we are at the stage where the website is not a stand-alone thing with a different set of customers. Actually, it is part of the integrated business and we as a business want to fully integrate that and present a very seamless, single presentation to the customer.” Lewis joined John Lewis on March 4 after being lured from his role as chief executive of Collect Plus, which operates a network of lockers in corner shops across the UK for customers to collect online orders. Before that, he was the UK managing director of eBay.

Lewis’s background at Collect Plus hints at the continuing importance that John Lewis places on having a physical presence across the UK and he is adamant that stores will maintain a pivotal role for the retailer. For John Lewis, its stores are a unique weapon in the battle against online-only retailers such as Asos and Amazon, which are now competitors alongside traditional rivals such as Marks & Spencer. For example, when a new John Lewis department store opens, not only does it generate its own in-store sales, it also boosts online sales in the surrounding area. Online sales increased by 30 pe in the Chester area when John Lewis opened a department store there in September 2011. “We have stores that people want to go to,”

Lewis says. “I think it is inevitable that stores will look very different in the future and we are committed to innovate on that. But I wouldn’t want you to go away underestimating how important the partner experience is for shoppers. “The fact customers know they can come to John Lewis and speak to a partner who owns the business, has most likely been with the business for a fair amount of time, who understands our products intimately, and can advise them on their purchases that is still a fundamental part of what makes John Lewis.” Although Lewis is only weeks into his new job, he is already working on further developments to John Lewis’s online operations.

With the multichannel model in place, this is also likely to drive changes within stores, too. Lewis believes that mobile technology and personalisation will become increasingly important, so the revamped John Lewis website has a new “wish list” function for customers. “If we took a little time machine into the 30pc rise in online sales in the Chester area after a store opened future and then look back, I think we would walk through the store today and see customers shopping in very different ways,” he explains. “They are already walking into the store with very sophisticated technology in the form of their smartphones. Increasingly they are using that technology as part of how they shop – be it to scan items, to get extra information about the items, to find reviews, or to pay for items. All those elements are coming our way very, very quickly.”

John Lewis Press Release on £1billion Sales as it Launches Web Platform

Online sales at John Lewis have passed the £1bn mark on a rolling 52 week basis, alongside a successful launch of a new multi-million pound web platform.

 The milestone comes a year ahead of the retailer’s forecast, which had estimated reaching £1bn of sales in 2014.

The department store has invested nearly £40m in its new website during the three year project, which is the foundation for future online growth and its customer-focused omnichannel strategy.

Mark Lewis, who has recently joined the retailer as online director, said: “Passing the £1bn milestone almost an entire year ahead of schedule is a fantastic achievement for us, and a reflection of how central online shopping has become to our customers.

“We have a leading omnichannel strategy which our customers love, but to continue to deliver the service our customers want, we need a website which will serve us as well as the old one did, and maintain our position as a leading innovator in online retailing.”

The new website features new functionality including an enhanced wish list function, search history, and more inspirational content, with more customer-focused functionality planned for the future. With mobile now accounting for over 25% of traffic to johnlewis.com, the retailer has also revamped its mobile offer to mirror the creative design of the main site, and plans to launch a new app with details to follow later this year.

Paul Coby, IT director at John Lewis, said: “With sales up over 40% for johnlewis.com in 2012, we are seeing an unprecedented pace of online growth and customers are making more demands on our website, than ever before.

“The billion-pound success of johnlewis.com is a reflection of our strategy to put the customer at the heart of our online operations. Early testing at every stage of the build, and inviting over 3 million customers to use our beta site before full launch, has resulted in what we believe will be an outstanding experience and journey for customers.

“We have designed the new site to incorporate the best features of our previous site making it not only easy and intuitive to use, but inspiring to shop.”

The site also features a prominent feedback form, which generates around 300 pieces of feedback a day, which the retailer will use to prioritise issues and spot trends.

John Lewis Hits £1billion pa Web Record 1 Year Ahead of Schedule

Here is an article from the Online Sunday Telegraph today, by Graham Ruddick:

John Lewis hits web record sales.  John Lewis have cleared £lbn for the first time, demonstrating the rapid growth of its digital business. The retailer, part of the John Lewis Partnership that also controls Waitrose, said it has achieved the milestone of passing £lbn of online sales over a rolling 52-week period a year ahead of schedule.

John Lewis has built a formidable online operation that allows customers to collect orders from its department stores and Waitrose supermarkets. The news comes in a week when Tesco and Debenhams also underlined the shift in the retail industry. Tesco wrote down the value of its land bank by £804m because it plans to focus on convenience stores and digital operations, while Debenhams said its online business had become more profitable than its department stores. Mark Lewis, the new online director for John Lewis, said it was a “fantastic achievement” for the retailer to clear £1 bn of sales and it reflected “how central online shopping has become to our customers”. Online revenues account for roughly a quarter of John Lewis’s overall revenues. However, the retailer estimates that two-thirds of all customer purchases involve interaction with its stores and website. “There is no such thing as an online shopper, there is no such thing as a store shopper,” Mr Lewis said. “Our customers are now shopping John Lewis across all the channels.” John Lewis is relaunching its website in order to drive a new expansion in online sales. The retailer has spent £40m over the last three years on the project, which allows customers to build a “wish list” of products that they may want to buy.

Is there another digital divide in IT in the UK?

As someone who always devours the latest edition of Wired Magazine – and as an Apple fan – I was more than delighted to see Sir Jonathan Ives on the front cover of the July edition as No.1 in the “2012 Wired 100”, who the magazine describes as the UK’s digital power-brokers.

Now, it is notoriously difficult to categorise in groups the digiratti, since yesterday’s web entrepreneur is today’s venture capitalist and/or government IT adviser.

However, whilst stuck on a long train journey I did try and categorise all 100 of the Wired power-brokers, because something struck me forcibly when I flicked through the list, and I wanted to see if it was really true.

It is, as I said, wonderful to see Sir Jonathan at No.1 – and it is appropriate that he has been recognised with a “K”.  No more needs to be said on that.

So here is my categorisation of the 100:

  • 25 venture capitalists
  • 20 web entrepreneurs
  • 9 media/journalists
  • 7 conference and exhibition organisers
  • 6 IT company leaders
  • 6 in government IT
  • 5 in advertising
  • 4 in retail
  • 4 in games
  • 3 in politics
  • 3 in charity
  • 2 authors
  • 2 inventors
  • 1 consultant
  • 1 in telecomms
  • 1 private sector CIO
  • 1 singing artist (that’s Adele).

What struck me was how different this was from the lists that appear in the CIO Magazines that are aimed at the corporate sector, and this is reasonable enough.  Yes, I know Wired  aims to be uber cool and (ahem) perhaps we CIOs and IT Directors are less so…

So my point is that there is perhaps another ‘digital divide’ in the UK, and that is runs between the web entrepreneurs and venture capitalists on one hand and the corporate CIOs and the IT companies on the other.  The more I think about this, the more it rings true.  We inhabit very different worlds – corporate IT and the web investment world.

This is something of a shame, since – in my own field, for instance – John Lewis is now 25% online company, and retail and many other industries are being revolutionised by web technology.

But, more than a shame, I think this ‘divide’ could also have a serious impact on how IT is viewed as a career and how we train young people in IT skills.

Maybe we should be breaking down the barriers between these worlds?

The Great British Technology Innovation for Retail Event

As John Lewis IT Director, I am getting very excited by an initiative that we have just launched: John Lewis’s “The Great British Technology Innovation for Retail Event”!

Innovation and John Lewis

Most people in the UK know John Lewis for our customer service and for the breadth of what you can buy.  We are increasingly known for innovation in our
shops, our formats and products – and, most importantly, we are known for our unique – at this scale – Partnership Model, which is the foundation of our business and our service.

What is perhaps less well recognised is the John Lewis heritage of technology-enabled innovation.  In the 1960s we were one of the first retailers in Britain to introduce computing into the heart of our business.  John Lewis was an early adopter of electronic point of sale (ePOS) in the 1970s, and we have been a leader in the “bricks and clicks” world with our development of our award-winning jl.com channel, which is now a quarter of our business revenues and growing fast.

We are now looking at how we can introduce new technology even more effectively into our shops.  One recent example has been the “StyleMe” Virtual Fashion Mirror in Oxford Street, which I blogged about here.  In our new store in Exeter, opening this October, we will display our full Store Assortment in about half the space we normally require, using technology.

We want to build on our heritage of British innovation in technology to
build commercial success in the new emerging omni-channel world of retail. We are aiming to build up an “eco-system” of John Lewis technology partners in retail innovation.

So we have invited some of the most innovative and exciting British technology companies and universities to work with us to solve key business challenges through innovation.

We have asked them to identify where they think technology can help meet our business challenges.  The best ideas will be short-listed and the companies asked to showcase their ideas and concepts at an Innovation Day on 5 November 2012, hosted at our Founder John Spedan Lewis’s former home at Odney, on the Thames in Berkshire.

A panel of experts, including John Lewis Business Directors and myself, will then work with the companies to test these ideas and an overall winner will be selected.

The winning idea will be prototyped with John Lewis and, if successful, then rolled out across our business.

This is exciting for us and, I hope, for the innovators – and who knows what will come out of this.  If anyone out there would in principle like to participate, let me know before 31 August.  We are already quite full!

Crisis in Numbers Studying IT at GCSE – what’s the answer?

Analysis by e-skillsUK of GCSE results this year shows that the number of students taking all ICT courses has fallen for the seventh consecutive year to just 70,418.  And this figure is a decrease of 12.5% on last year alone.

The number of students studying ICT at GCSE has been declining dramatically year-on-year from a high of 261,970 in 2005.

This continuing decline should be of great concern to universities and employers – and to everyone interested in the future competitiveness and success of the UK.

We know that demand for skilled IT professionals continues to increase, yet we are as a society failing to inspire a generation of young people to  study technology or to take up technology careers.

Something must be done!

It is for this reason that e-skills UK announced a few weeks ago that our Behind the Screen programme will be available to all schools from September 2012.

Behind the Screen offers GCSE students IT projects to tackle with interactive online materials supported by full teachers’ notes. The projects have been developed in close consultation with a number of employers, including John Lewis, and are based on a variety of real-life business issues.

Our aim is that students learn computational thinking, develop technical skills, and gain creative, team working and entrepreneurial skills – all in a fun, interesting and interactive way.  After all, students these days are the most connected and IT-enabled generation ever.

Young people who play computer games can learn to create games.

Young people who use apps every day can design apps.

Young people who use social media to connect with their friends can use social media to connect with customers.

I am very excited by the potential of Behind the Screen – but with the rapid decline of students even considering studying IT at GCSE, we have no time to lose.

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