After yesterday’s controversial declarations from the big banks, today’s bonus news focuses on the John Lewis Partnership, who have announced that they are sharing £200m with their employees after a 20 per cent leap in profits during 2010. Does anyone resent this? I think not. John Lewis is held up as a prime example of a successful British company and one built from the outset on a unique ethos that makes the employees its shareholders. It’s quite a voguish model too, and one that pops easily out of the mouths of politicians seeking a new paradigm for our benighted public services.
But does it work? Is it a magic wand for other businesses and retailers? Surely it must do, otherwise why would John Lewis and its scion, Waitrose, be able to buck the trend and outperform the market?
Time to share my thoughts.
As a loyal, long-term John Lewis white goods shopper who, was recently presented with a voucher for one of the well-known but not well-regarded electrical sheds, I was recently forced to shop elsewhere when my dishwasher passed away. Now I am used to the cheerful, professional, well-informed, staff and low-key sales style. Nothing could be further from the experience I had in what I’ll call “Coxons”. The young sales assistant truly lacked any enthusiasm for either the goods on sale or the brand he represented. His product knowledge was non-existent and it seemed that nothing I had gleaned about their products in my pre-purchase online research applied in store, including model range, pricing and delivery terms. It was a rather painful experience and if it hadn’t been for the voucher, I’d be back at John Lewis.
Is the whole of the group’s success attributable to its recruitment and HR policies? Clearly not. In recent years, John Lewis has made massive strides to diversify its business offer and update its image. Doing away with the Home Counties frump-factor and updating its stores with expensive modern makeovers has transformed John Lewis stores into glossy shrines of retail rather than the temples of tweed of old. And all this without a mention for Waitrose, the jewel in the crown that has become the supermarket of choice for the aspirational middle-classes. (How many times have you heard someone say: “It’s a bit more expensive but it’s worth it”?) Just as the consumer was starting to become more cost-conscious, and potentially seeing Waitrose as bit extravagant for their whole weekly shop, their timing was pitch-perfect with their Essential Waitrose range. No lurid starbursts here, thank you.
So no, it’s not all about the staff, or more correctly, partners. But they play a huge part in the overall success. At Strand we often talk about finding the right balance between external communications and engaging retail staff through ‘internal marketing’. It’s the internal marketing that continues to surprise everyone by driving incremental sales. An engaged salesforce clearly communicating brand values is more effective than a TV commercial with aims to realise the same goal.
The most surprising fact about John Lewis is that there is no secret to their success. It’s simply old-fashioned retail values redefined for a modern world.