Traditional computer sales may be down across the board, but at John Lewis they’re growing fast.
Dominic Sacco speaks to senior buyers Johnathan Marsh and Rebecca Smith to find out how the retailer has doubled its market share in PCs and electricals over the past three years…
“Believe can and you’re halfway there.”
This isn’t the message on a tea towel on sale in the kitchen department at John Lewis (although we’re certain that there’s likely to be something similar – probably next to the Keep Calm and Bake cake tin). No, this is a phrase that flashes up on-screen outside the lift at John Lewis’ head office.
As you enter it flashes: “Ask not what John Lewis can do for you; ask what you can do for John Lewis.” (Sadly, the lift closes before we can discover if “You don’t have to be mad to work here, but it helps” appears).
The motivational messages have been introduced by buying and brand director Paula Nicholds to further boost staff morale, the hope surely being that firing up the teams will translate into increased sales.
And something is certainly boosting the computer and electricals department, where the team is bucking market trends.
“We’re seeing positive growth this year,” Rebecca Smith, John Lewis’ computing and printing buyer, tells PCR. “We’ve doubled our marketshare in computing during the past three years. I think five years ago we might not have necessarily been on customers’ radars, but I think we’re a significant part of the market now.”
Today John Lewis has around ten per cent of the computing and electricals market. Johnathan Marsh, head of buying across the consumer electronics and white goods business, says electricals is actually the fastest-growing category within John Lewis.
Part of its success comes down to how it markets computers to consumers. Stores have dedicated “pop-up” space for big launches like Windows 8, or special cross-category sections such as ‘Back to University’, which featured a mix of goods – from laptops to toasters.
“That’s the great advantage we have at John Lewis – the breadth of product for different stages in a customer’s life,” adds Smith. “We work tactically around category marketing but we still try to make sure our marketing is distinctive compared to elsewhere. It’s an advantage for the vendors – we can offer them a mix that other retailers can’t.
“It can also be quite daunting for a customer if they haven’t bought a PC for a while or aren’t very familiar with the terminology, so I think the in-store experience is important for PCs, even more so than tablets.”
Other initiatives include an interactive shop window made in conjunction with Microsoft, plus outdoor and press ads. These tend to focus on what’s special about a particular product, rather than price, in order to inspire consumers to come in-store and see the tech for themselves.
“It’s really different to what our competitors do,” explains Smith. “We do talk about price promotions, but it’s more about inspiring customers. Even if they’re not interested in a product, our adverts whet their appetites as to what is available at John Lewis. Then they’re more likely to come in and have a great in-store experience and find what’s actually right for them.”
John Lewis has announced that all its of electrical products will include a free minimum two-year guarantee, while TVs will continue to come with a five-year guarantee. Its famous ‘Never Knowingly Undersold’ policy, which price matches with rivals, is also still in place.
Smith says: “We see it as an investment in customer loyalty. What sets us apart is getting the range right, the service proposition in stores – we invest very heavily in our partners and training. Never Knowingly Undersold gives customers confidence – they know they’re getting the best price.
Marsh adds: “We’re the only retailer in the world to be offering a minimum two-year guarantee and we take pride in it.”
This mix of customer care attracts a wide variety of consumers.
“Our customer base is very, very broad,” explains Smith. “Technology and fashion are really important in bringing younger customers to us.”
Rebecca Smith, John Lewis’ computing and printing buyer, and Johnathan Marsh, head of buying across the consumer electronics and white goods business
Tablets are taking a bigger bite of the market, and it’s a “massive growth area” for John Lewis. Marsh expects the category to continue to grow – and he also identified some other more surprising top sellers at the chain.
“Our audio department is absolutely flying, so wireless music is a real trend,” he tells PCR.
“In the TV market, we launched OLED first in the UK and 4K UHD has been really encouraging.
“You could be seeing 4K in a much broader sense next year and occupying a much sweeter price point.”
Smith adds: “Printing is a rapidly-growing product category for us, we’ve grown it from a relatively low base and we’re really bucking the market trend.
“Our average selling price in printing is very significantly higher than the market. Our customers care about style and design – we do really well with products like HP’s Envy range.”
With 3D printers and online software downloads increasing in prominence with rival retailers, are these also on the firm’s radar?
“I think 3D printers is a really exciting space but I think it will take something like the toy category to set it off in the right way,” Marsh comments. “When they start doing that in a serious way, I think that market could explode.”
Equally, Marsh admits John Lewis and other retailers have “got to be” offering digital software downloads. “It’s the future,” he says. “That’s very much on our radar in terms of development.”
It’s clear that John Lewis is unlike other electronics retailers in the UK – its focus on customer service, premium products and an engaging shopping experience sets it apart from most grocers and specialists.
“It’s important that our customers are choosing us over them,” says Smith when questioned on the competition. “We have to watch what they’re doing, I don’t think we can be complacent but at the same time we’ve got quite a lot of headroom to grow.
“There’s space for us and for Dixons in the PC market.”
Marsh expands on this: “Where Tesco occupy today is generally around the low value commoditised area and clearly they’ve done very well in that space.
“But if you look at the future of technology and where the manufacturers are heading, it’s all about innovation, creating experiences and exciting customers.
“And that’s what’s John Lewis does best.”
John Lewis: Through the years
1864 – John Lewis opens its first shop – a drapers in Oxford Street
1918 – The first issue of house magazine The Gazette is published
1925 – John Lewis establishes the principal of ‘Never Knowingly Undersold’ as a promise of the best value offered to customers (the slogan became a price match promise in 2010)
2001 – JohnLewis.com launches
2014 – John Lewis celebrates 150 years since its first store opened
John Lewis facts
Number of stores: 40
Contact: 020 7828 1000