Interview: John Lewis - PC Retail

Interview: John Lewis

We talk to Ed Connolly, head of buying for consumer electronics
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If there’s one theme that has been consistent among technology retail in recent times, it’s the push towards simplification. These days, it seems extremely important to PC World, Comet and Best Buy to eradicate what can charitably be called spec-based selling, and more frankly described as techno-babble.

It’s not because shoppers are getting stupider, or that the technology is particularly becoming more complex to understand. It has much more to do with the enforced life cycles of consumer technology sectors in the last few years. In days gone by, the model was: New tech is launched at a very high price in relatively low yields and enthusiasts account for the majority of purchases. Soon, the price comes down and awareness grows to the point where demand is sufficient to rapidly increase production until it reaches something that could be considered a mass-market commodity.

A classic example of how tech marketing has changed is the way 3D and tablet PCs are being pushed by the big tech manufacturers. The firms behind these sectors have gone straight for the jugular in market terms – there’s no slow-burning, long-term strategy anymore, the devices are being thrust violently towards as many consumers as possible, across many demographics.

One upshot of pushing cutting edge tech on as many people as possible is that you can’t assume they are as clued-up as the enthusiast. So you have to change the language – some would say dumb it down – in order to get the message across. You’re not going to sell anything to grandma on the basis of overclocking life span or polygon tessellation. Even if she does want what you’re selling.

Thing is, some retailers – namely John Lewis – have been taking that approach for years, and are now looking to capitalise on it with aggressive expansion plans to lead the market in stores and online.

According to Ed Connolly, John Lewis’ head of buying for consumer electronics, the retailer first seriously stepped up in the tech game upon the release of the iPod, and from the off considered it its role to simplify and explain the technology it was selling.

“iPod was a pivotal change for us. If we consider the sales density from a very small number of SKUs, it required its own retail solution. And that made us change the way we behave as retailers, I think. That kind of served as a watershed for us to put more emphasis on consumer electronics as a whole, and think about how we display them and how we sell them.

“Actually, I don’t think we’re there yet – it’s a work in progress for us. Because it’s becoming clearer and clearer how electronics link people’s lives together through content creation and consumption, and as we evolve and develop we’ve got to keep that in mind. Our genuine USP is that we retain our selling partners for a long period of time, and they’re unbiased. I think they have a natural inclination to want to help the customer, and customers know that when they come in they won’t be sold to, they’ll have things explained to them. I think that’s quite a big psychological difference; keeping it simple is obviously a part of that. It’s quite a confusing world, and it’s one that gets more and more confusing if you really want to delve into the detail. It is complex, and most people don’t really know that much about it.”

This dynamic of keeping the sales pitch simple has been replicated across the tech specialists, with Comet seemingly tailoring its entire brand refresh to hammer home this message. That’s not to say that the specialists have copied the department store, but John Lewis can take some credit for being one of the first to take this stance. And so far, it doesn’t seem to be doing any harm

“We had a big boost from TVs pre- World Cup. And if you take a slightly longer horizon, TVs have been huge for John Lewis. That’s probably the area we have one of our highest market shares in – I think we’ve got about six or seven per cent. This year our IT sales have gone mad. We’ve seen incredible sales, much higher than industry levels and much better than we expected. We’ve pretty much doubled our market share to between five and six per cent.”

The situation now is that even the vendors are less inclined to indulge in geek-speak, and John Lewis intends to capitalise on the new waves of products produced by an industry that seems to have come round to its way of thinking when it comes to talking about technology.

“For tablets, the space has to come from somewhere. I have to look at things like fix-lined telecom, which is less booming than it once was due to mobile phones. So that’s an area that we can get space back from. I see it as a massive new market for us to move into. It should give us a real incremental boost to trade. So if you think of things like fixed line telecoms and fax machines, we’ve got to move out of those faster and get the new exciting stuff in to the shops quickly.”

However, Connolly has mixed feelings when it comes to the burgeoning 3D sector. “I think consumers will end up getting it whether they want it or not. I personally can’t see that many people using it – I’ve got more faith in HD. And internet TV is a more compelling proposition than 3D TV as well. 3D will be one important component part of buying TVs, but I don’t think that’s the main reason for purchasing it. I don’t think people will replace one TV with another one that’s got 3D, on the whole.”

With the tech industry feeling somewhat invigorated by the potential energy of new markets and a growing economy in the UK, John Lewis has further designs in the area.

When asked if it will become a much larger player in UK technology retail, Connolly concluded: “Yes, I think we should lead the market in all of our electronic industries. There’s certainly a lot for us to go at. We’ve got six/seven per cent in TV, that can go a lot further, as there proposition is very strong. I can’t really think why someone would want to buy something from our competitors. We should be replicating that all across the board in all of our categories.

“We don’t have as many shops (as PC World and Comet), but as we roll out our ‘at home’ stores we have quite ambitious expansion plans with those. And as more electronic purchases go online, we’re also very well placed to take a market leading position from the online trade.”

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