John Lewis chair Dame Sharon White raised eyebrows on 23 August by revealing that the retailer is on the brink of scrapping its ‘Never knowingly undersold’ strapline, first adopted in 1925.
In a major, new interview, White said: “The proposition is important because it signifies being fair to society. We’re reviewing it to improve it.” As a potential replacement, she suggested: “My money’s on ‘Fair Value for All’.” (The Sunday Times, 23 August 2020)
The shift is part of a wide-ranging change mission that White is leading at the retail brand, which was already facing challenges before the pandemic struck. Last year, the firm announced its first-ever, half-year loss, which shook the profit-sharing scheme that underpins the brand’s employee-owned, Partnership model.
Since taking the helm in March, White has announced the closure of eight, large stores (Retail Gazette, 16 August 2020) and proposed turning the empty real estate into private housing (Express & Star, 30 July 2020). With online purchases now comprising 70% of sales as a result of the lockdown – up from 40% last year – White is now exploring a shift into product rental, and has also floated the idea of kitting branches out with interactive sports zones based around live experiences. (Independent, 24 August 2020)
In parallel, retail commentators have suggested that the “love of democracy” stemming from the brand’s Partnership model has been slowing down change at the very time it needs to accelerate. (MoneyWeek, 10 August 2020)
Commenting on White’s Sunday Times interview in a piece at the online arm of Campaign, Jo Delaney – strategy director at creative agency Odd London – argued that losing the classic strapline wouldn’t erode the chain’s “sacred brand perceptions,” but would prevent it from dangerously narrowing its own margins. “Under Sharon White’s new guidance,” she said, “the leadership team are finally showing a serious commitment to change; axing something that's been in place for 95 years is a roaring statement of intent.”
Ivan Mazour, founder and CEO of retail-focused marketing firm Ometria, added: “From now on, the only option available for retailers like John Lewis to differentiate themselves in a difficult vertical will be a laser focus on the customer experience. This will require nothing short of a complete transformation in the way that the company operates, particularly in the area of digital innovation and communication in both the online and offline realms.” (Campaign, 26 August 2020)
What can leaders learn from John Lewis’s multifaceted issues about the challenges of leading change?
The Institute of Leadership & Management’s head of research, policy and standards Kate Cooper says: “It’s seemed to me for some time that the John Lewis strapline was an anachronism – particularly for a company that prides itself on offering a high level of customer service. If you are only going to compete on price, then you have to forego the additional costs of improved customer service. A strapline created decades before the advent of price-comparison websites – when you were essentially competing with the shop next door, or just a few miles away – won’t apply to today’s sharply different environment.”
She explains: “What Sharon White is having to grapple with is the tension between factors over which she has no control, such as the rise of internet shopping, and those over which she has a great deal of control, such as the organisation’s internal culture and the way it treats its staff. At present, everyone in retail is having to deal with those two areas at the same time – and in many ways, that challenge relates to what we explored in last week’s blog about stakeholder capitalism.
“You’ve got to think about everyone in your value chain. In order to safeguard the interests of your staff, you must give a fair deal to suppliers and fair value to customers. That ethos has been at John Lewis’s core for decades – it’s just that now, White is having to ensure that it fits in with, and responds to, the current commercial context.”
Cooper points out: “While there may be a huge, initial investment in digital infrastructure and everything that goes with it, the brand will be eager to capitalise on its central offering of a high-quality customer experience. And ultimately, the people who are going to deliver that are the customer-facing staff. So they can’t be sidelined in this effort, or relegated to second place amid all the technological considerations.”
She adds: “As with any change programme – and as we have seen so often in the past few months – if you bring your people with you from the outset and help them to understand the ‘Why’ behind the changes, they will prove amazingly adaptable.”
For further insights on the themes raised in this blog, check out the Institute’s resources on leading change
Source refs:
The Sunday Times, 23 August 2020
Retail Gazette, 16 August 2020
Image of flagship John Lewis branch in London’s Oxford Street courtesy of Willy Barton, via Shutterstock