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Marketing Society - Retail Forum 2007- John Lewis on fast track to growth
Archived article dated Thursday September 27th 2007
Although the focus of John Lewis is to continue to expand both its department stores business and Waitrose supermarket chain in the UK there is the prospect that the group could also look to gain a presence overseas.
By Glynn Davis
Speaking at the Marketing Society Retail Forum in London this week John Lewis chairman Charlie Mayfield said: “Our first priority is with UK expansion, where there is a lot to keep our appetite satisfied, but there are opportunities for Waitrose and John Lewis overseas.”The confidence to possibly go overseas is supported by the increasing amount of Waitrose branded product now being supplied overseas, into countries such as Dubai and Bangkok, as well as a belief that the John Lewis brand is strong enough to travel abroad.
But for now Mayfield says the company is in the midst of an unprecedented period of growth in the UK with its plan to double the size of the business over the next 10 years. “Over the next six years we'll be opening 12 shops whereas the previous fastest
This aggressive expansion programme is based on research the company has undertaken which found 50 per cent of John Lewis' target customers are more than 30 minutes drive from a store and that the majority of its sales are accrued from people who live within a 30 minute drive. And with Waitrose it found that 60 per cent of its core customers lived more than 15 minutes drive away from their nearest store.
Mayfield says the growth of the businesses has been helped by an increased focus on branding and marketing, which has certainly boosted sales of the company's own-label Jonelle products. They accounted for only 12 per cent of sales three years ago but now represent a hefty 30 per cent of turnover in the department stores with large electrical products among the new categories now available under the Jonelle label.
Despite the success to date Mayfield has more branding and marketing activity planned: “We believe it has got us to where we are now but we are now looking for new ways to excite the customer in order to further expand our two brands. We've put in place the architecture of the brands and we are now ready to shout more loudly about them.”
Communication of the brands to consumers is likely to be enhanced by the re-launched John Lewis account card - as the 'Partnership' card with HSBC - which Mayfield says is providing the company with plenty of useful information. “We have a growing database that has been building through our 'Direct' business. It does not give the granularity of Tesco's Clubcard but we have made it into a powerful tool,” he says.
As well as helping to propagate the customer database the Direct business - that incorporates the internet and mail order operations - has been growing rapidly with most shoppers who buy online also shopping in-store. And these multiple-channel shoppers also tend to be higher value customers, according to Mayfield.
With John Lewis continuing to attract many such customers Mayfield says he confident of the forthcoming festive season while also retaining some caution: “Our footfall has held up better than other retailers despite the poor conditions
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