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Tuesday, October 20, 2020

John Lewis To Build And Rent Homes, And Retail To Be 70% Online By 2025

The John Lewis Partnership has today announced its plans to reach more customers in a variety of different initiatives. The ‘Partnership Plan’ demonstrates a commitment to change in plans to boost profit to £400m by 2025.

The U.K’s largest employee-owned business – the John Lewis Partnership highlights the trust and love customers feel towards the Waitrose and John Lewis brands. It is indeed that trust that has helped to build the John Lewis credit card and financial services – a business the Partnership wants to quadruple over the next 5 years. This will be delivered through a range of new financial services including insurance and savings, and offering retail credit across all channels in early 2021.

Turnkey Residential Rentals

Perhaps the most interesting of the new services announced is the move into housing. In July 2020, JLP Chair Sharon White eluded to a radical plan to save the business highlighting potential moves into becoming a residential landlord and further expanding its horticulture offer with the opening of garden centres.

In the plan announced today, there is clarity on this with 20 sites that the business already owns identified for the development of sustainable housing developments.

In a move into the ‘build to rent’ market, John Lewis would furnish properties as a complete turnkey for tenants – with the added flourish of a Waitrose Food delivery service.

Resale and Recycled Goods

Trials with the furniture rental partner Fat Llama have boosted the confidence in JLP to add further products to this initiate. The statement also highlights that rental, resale and recycle in an area of growing priority for their customers and JLP will develop new ranges and products to test for rental.

60-70% Retail Business Online By 2025

With the significant jolt that Covid-19 has given to online shopping, JLP are committing more resource to enhancing their digital and virtual services as they continue the move away from traditional ‘bricks and mortar’ retail. Their app will connect more customers with personal shopping and home design services.

And as well as the obvious move to bring more synergy together between their own Waitrose and John Lewis brands – eg selling John Lewis Christmas trees in Waitrose and Waitrose hampers via John Lewis, the business wants significantly increase the reach of the brands across the U.K.

One of the ways they will achieve this is through expanding click and collect and also trials of a Waitrose food delivery in partnership with Deliveroo.

Never Knowingly Undersold To Be Replaced With A Value Pledge

As the business commits to understanding much more about their customers to help their plans remain relevant, JLP highlight that the famous value commitment of ‘Never Knowingly Undersold’ will be replaced with a value offer next year. The pledge will be the result of insights and findings from research.

There is an admittance that the business understands that its shopping experience isn’s as simplistic as it should be, and therefore the first class service it is known for has dipped. JLP highlight they will evolve their service offer as well as reimagine store formats and layout.

The plan also highlights a greater commitment to be more sustainable and ethical. There is a net zero carbon by 2035 commitment and by 2025 all products will have a ‘buy back’ or ‘take back’ offer.

Whilst John Lewis highlight the plan as bold, a large amount of the change is unsurprising for a retailer faced with the intensity of the switch from instore shopping to online from customers. It is also true that John Lewis has been slow to evolve and react to consumer changes in the past and is now having to evolve at greater speed to catch up.

The success of the plan is dependent on the execution, and Partners will have to wholly buy-in to the strategy as key stake-holders.

The most interesting first step in delivery may be what the eagerly awaited John Lewis advert for Christmas 2020 looks like. Previous iterations have included Sir Elton John’s 2018 commercial for which the rock n roller for a rumoured £5million pound fee. The pressure in on for John Lewis to get the tone just right for a Christmas like no other. This will demonstrate to consumers in just a couple of minutes whether John Lewis is indeed closer to to them and demonstrating signifcant change for good.

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