Annual Report and Accounts 2015
John Lewis Partnership plc
71
CUSTOMER REVIEW
In recent times, there has been a paradigm shift in the way customers research, shop and take delivery of their goods. These changes have had a significant impact on the UK retail market.
The biggest change continues to be the shift to online and ‘omni-shopping’, and this is an area in which John Lewis continues to invest.
Convenience driving customer behaviour
This year we have seen two milestones reached in changing consumer behaviour: Click & Collect overtook home deliveries, now accounting for 54% of online orders; and a new shape of peak trade was firmly established with Black Friday marking our busiest single day. Our distribution and online operations stood up well to these challenges.
In response to our customers’ changing shopping needs, we continue to flex our delivery options. With Click & Collect now making up over half of online orders, we have extended our order cut-off to 8pm, expanded the number of Waitrose shops which offer the service, and expanded our partnership with Collect+.
Innovation in shops
In our physical estate, we opened two convenience-driven shop formats at London’s St Pancras station and Heathrow Terminal 2, and our new flexible format shop in York has seen trade exceed expectations.
In our existing shops, we further enhanced the in-store customer experience by opening opticians and expanding our third-party catering offer. We completed a major refurbishment of our Southampton shop, which now includes a Little Waitrose within the branch.
Expanding our distribution infrastructure
Work continued this year on our second distribution centre at Magna Park. With the ‘link bridge’ between the new and current sites complete, Magna Park 2 is already being used for some operations ahead of being fully up and running in 2016. The £95m, 675,000 sq. ft. site will allow us to process hanging garment orders. This means that customers take delivery of fewer parcels and we can bring more efficiencies into our supply chain.
A logistics challenge
While omnichannel capability and innovation remain at the heart of our success, logistics has been at the forefront in driving differentiation and delivering to changing customer expectations. In 2014/15, we invested £92.5m in our IT and systems, laying the foundations of a fully joined-up customer experience. Work continued on our second distribution centre in Magna Park, which takes us to over 1.3 million sq. ft. of space when combined with our existing Magna Park site. We have also announced the opening of a third distribution centre in Milton Keynes in 2016.
150 years of retail
This year was the 150th anniversary of John Lewis. We took time to mark the history of our business at a one-off celebratory event for Partners across the UK. We also created a range of innovative products through brand and designer collaborations.
While our founder John Spedan Lewis would have recognised the commitment to service in the John Lewis of today, he would be excited by the advances in technology we are embracing. Change is always welcome, pushing us to innovate in all areas of our business to satisfy our customers. The winner of our JLAB technology incubator, Localz, a ‘micro-location’ technology startup, is a prime example of this forward-thinking approach.
A 150th anniversary
As well as celebrating with our Partners, we produced some historic collaborations with brands we love and rejuvenated prints from our own archive to create John Lewis 150th anniversary products. Our 150 year old Cummersdale print was reproduced on certain products and we worked with Antoni and Alison on a range of 1960s- and 1950s-inspired silk dresses with vintage brooch appliqué.
Introduction
Partnership difference
Principles
Strategy
Performance
Governance
Financial statements
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