John Lewis Plc

We decided to analyse the three upmarket department stores which have determining roles in the UK retail market. Due to the recession the department stores are still facing enormous challenges, the volumes of the sales are dropping, the mature market of retail has low growth rates and the buying habits of the customers have also changed in the last few years therefore the competition is extremely tense. Although the price is still an important factor for the consumers, they have become more sensitive to the value, the quality, the longevity rather than the quantity of the purchased products or services. (Debenhams, Annual Report & Accounts, 2014) Competitors have extended their range of products and services, through the internet and online

John Lewis is one of the biggest department store chains across the UK, which is offering a broad product line, among other things: home & garden, electricals, clothing, accessories and giftware and other kind of services like insurance for cars, events, travel and life. Besides having 46 physical stores, in addition, customers can order products online.
John Lewis is planning on opening 3 new stores in the future, investing 37% of capital expenditure in IT. Their IT is supported by their owned incubator so called “Jlab”, where they are making the next developments. (JOHN LEWIS PLC- Financial Statements for the 53 weeks ended 31 January 2015, 2015) The focus on the customers will lay on membership and customization by means of new and tailored rewards. In light of customers, technology that makes shopping flexible and convenient for any shopper is a critical trend. In 2014 the 30% of the sales were through the online shop services. (Reuters,

Their core product categories are high quality own branded food, clothing and home products while they offer banking, energy and Christmas shopping services. Next to their physical stores they have online stores services which operate internationally. Whereas the food division have increased their sales in 2015, both the clothing and online divisions’ revenue decreased by about 5.9%. Despite the flat revenues, their net income went down by 7.30 % last year. (Financial Times, 2015a) In 2015 they have decided to close nine shops across the UK and according to the next year strategical plans they concentrate on raising the online sales and enhance the slowdown in clothing sales. In their strategy planning they are focusing on the IT, the new technological trends, investing in their “Digital Lab”, designing wearable tech devices, developing mobile services and interact with the customers through application such as “Cook with M&S”. (M&S Strategic Report, 2015) On the other hand they put the customers’ views and opinions at the centre of their strategy and try to gain insight segmenting the market, so it finally adapts its products benefiting from avant-garde and exciting items (Marks & Spencer Group, 2015b). Thus, their customer focus, being updated about trends and fashions, is a cornerstone to develop their strategy