Each issue of eDelivery Magazine features three independent consultants taking a look at a leading retailer to benchmark their performance in terms of delivery, collections and returns, and to analyse what this means for their back end operations and retail strategy. In the most recent issue (April 2016) we focused on John Lewis.
DELIVERY 61%
Stuart Higgins and Will Dawson, LCP Consulting
John Lewis is one of the most prestigious names on the high street and is consistently quoted as being one of the retail success stories of recent years, both in terms of customer service and sales growth. With their singular focus on product quality and customer service, backed by their ‘never knowingly undersold’ price promise, it is the envy of many of its competitors.
John Lewis only has 46 stores nationwide, which may explain why their online offer has been such a success, consistently delivering high LFL sales growth, as it provides brand access to a far wider percentage of the UK population than live within traditional store catchment areas.
Given the above, it might be seen as surprising that John Lewis only scores 61% against the LCP home delivery index.
John Lewis are content to offer their customers a very simple set of menu options for home delivery. While this provides the customer with a simple, easy to understand, intuitive service offer, it lacks some of the advanced options provided by competitors.
Next day and named day (inc. Saturday) delivery is not competitively priced when compared to the wider market (at £6.95 per delivery), while standard delivery is also charged at a price premium when compared to the market (£3.50 per delivery with a free threshold of £50 per order). This offer is around the market average and is by no means market leading.
The primary reason for John Lewis scoring below some competitors on the overall delivery index is due to their lack of additional service and premium delivery options; John Lewis do not offer Sunday delivery, evening delivery or same-day options. There is a premium pre-10:30am delivery option for next day delivery, but this also attracts a premium charge of £3 over the next day delivery cost making it a far less attractive offer. The next day cut-off is disappointing as well, with 8pm being at least two hours earlier than the market benchmark and key competitors who consistently offer 10pm or later.
When considered as a whole, the market positioning of John Lewis’s home delivery offer tends to suggest that the business is aiming to channel customers towards in-store collection rather than home delivery, which is a particularly attractive proposition for the business as customers can collect in both John Lewis and Waitrose stores. (See below for Collect commentary.)
At 61% the overall John Lewis home delivery index score is below expectations for a major high street retailer, however, this comparison with a benchmark index designed to reflect diversity and choice may not be appropriate in the case of John Lewis who are clearly favouring simplicity of offer and store collection over service diversity.
COLLECT 73%
Judy Blackburn, Director,Kurt Salmon
In 2015, click-and-collect overtook home delivery at John Lewis with customers choosing the former method for 54% of their orders (or over 6m orders per year). Last July, John Lewis announced it would charge customers £2 for any click & collect order not reaching the £30 threshold since the free in-store collection service was unsustainable. This move was seen as brave by many, but John Lewis wanted to take the lead in making customers understand that this is a reasonable charge (Tesco is following suit from February 2016) given that this method of shopping is only going to increase. For the six weeks to 2 January 2016, sales through click & collect were up 16%, and accounted for half of all online orders.
With 18% of orders under the order threshold, John Lewis will have an extra £2 million to invest in omnichannel plans. In 2015, it expanded its click & collect order cut off to 8pm (7 days per week) as well as its partnership with Collect+ and the number of Waitrose stores offering the service. Some 66% of John Lewis click & collect orders are now picked up at Waitrose branches. A new year statement from the John Lewis Partnership chairman highlighted “the strength of our two brands working together as a proposition for customers, with 35% of John Lewis online orders collected from Waitrose branches.”
My local Waitrose store staff indicated Christmas collection volumes were around four times the normal level. For this review, I placed orders to collect from John Lewis’s different store formats: department store (Norwich), convenience store (St Pancras) and Waitrose (Leeds), as well as one order through Collect+. During the ordering process, it is very easy to select the most convenient pick-up location with the nearest John Lewis and Waitrose location listed before those of Collect+. All orders were available for collection next day and all the in-store collections could be picked up between two and five hours earlier than the 2pm collection time indicated on the website. It was quick to pick up all the orders; I was only kept waiting a minute before getting served by friendly and knowledgeable staff.
John Lewis has clearly focused on meeting the customer delivery promise, and is reporting 98.7% of orders arrive in-store next day. However, it does need to improve its communications, so that it is on a par with competitors. The order confirmations for the collections in store included links to collection details and maps. Unfortunately, these did not work or give sufficiently clear information on the whereabouts of the collection points. The link to Collect+ also did not work. Interestingly, the text message sent to confirm the order was ready to be collected in-store did not state which store it was to be picked up from so I needed to log into email to check.
RETURNS 96%
Joe Tarragano, Director, Transform
Unsurprisingly, John Lewis’s focus on customer service extends into its returns proposition. It offers the standard return to store or return by post options, but adds Collect+ for convenience also. Given myHermes is their delivery partner, they also include the myHermes returns offer.
The returns policy is very accessible from the product detail page, and clearly shown as being free. It is prominent and while not highlighted as a reason to buy or point of difference, its presentation is nonetheless strong. Reading the detail – presented in a friendly tone and in easily digested language – we see that the returns period is also an unusually favourable 90 days. Given this and the variety of convenient returns options, it is surprising that John Lewis does not make more of this offer in the purchase path (there is no mention once in the checkout flow). While the appetite to have volumes of returns coming back at 90 days is clearly limited, if the offer is available, it should be celebrated, since it will likely have limited material impact on returns but could encourage the purchase and re-affirms John Lewis’s customer services orientation.
John Lewis’s delivery note comes complete with easy-peel self-adhesive labels for Collect+ and for Royal Mail returns. This has become the baseline for a simple and easy returns process. What could be improved is the small font annotations indicating what the labels are for, given that consumers are not yet fully trained in all returns routes. Especially as John Lewis adds a third, unexpected label, for a gift message. But these are marginal improvements to an otherwise simple and helpful enclosure.
However, while the reverse of the note lists the various different routes in a very digestible way, it very quickly becomes apparent that the “free returns” offer is less clear than previously thought. For the Collect+, Royal Mail and collection routes we now discover that there are size and weight restrictions; the Waitrose option is free if the item was originally collected from Waitrose.
The breadth of products a modern retailer offers and the complexity of its partners’ terms makes it increasingly hard to offer a simple and consistent customer promise. John Lewis’s online positioning (i.e. it’s free) is a sensible approach, even if the reality turns out to be different in some edge cases.
