The UK retailer’s head of strategy for mobile apps, Tom Rooney, reveals the dos and don’ts from its keenly followed digitalization journey.
John Lewis has survived for more than 150 years by never standing still. The veteran UK retailer is part of The John Lewis Partnership, which includes 46 department stores and 354 Waitrose supermarkets, making it the country’s fifth-largest retailer. Over the past 15 years, John Lewis has pioneered many online and mobile commerce approaches, including click-and-collect and the creation of innovation labs. At the recent TechXLR8
conference in London, the company’s senior product manager for mobile apps and in-store digital, Tom Rooney, shared insight into its digital retail success.
Although 40% of John Lewis’s revenue today comes via online channels (its website and mobile apps), it no longer makes sense to consider different channels in isolation. People use a varied mix of channels for research, purchasing and fulfillment. “Even if a customer buys online, it’s extremely likely they began their journey elsewhere,” says Rooney. “For example, they might see something while browsing in-store, but order it for delivery online.” The company’s strategic decisions have to take this channel-hopping complexity into account. “It affects how we design our shops, our website — everything,” he says.
It’s becoming impossible to predict the precise paths customers will take towards a purchase, but John Lewis found it didn’t need to. “Customers are really happy to tell us how they experience our brand,” says Rooney. And although it has a large lab where it invites customers in order to monitor their behaviour, Rooney says retailers without access to such facilities can still achieve similar insights. “It’s really easy to talk to your customers — they love to tell you what they think. Just Google ‘guerrilla testing’ for lots of tips and techniques,” he recommends.
An increasing number of customer interactions involve a smartphone. “Every Christmas for the past three years, smartphones have overtaken their closest rival for online shopping. In 2015 they jumped above tablets, and last year did the same to the desktop. The smartphone is now the most common means for people to shop with us digitally,” says Rooney. The implications are clear, he adds: “If you’re thinking about digital, think about the smartphone first.”
Many people consider the tablet as just a bigger smartphone. “But size drives different behavior,” says Rooney. Usage levels of different devices accessing John Lewis’s digital services spike at different times of the day. While commuting, people tend to use phones. At work, most activity comes from desktops and laptops. Later in the evening, people move to tablets. “Customers spend longer with us if they’re on a tablet but visit more frequently if they’re using a phone,” says Rooney. He believes it is vital to consider these differences when designing websites, apps and online services. “But it’s also important to keep an eye on people’s digital habits, since smartphones are getting bigger and the differences may become less marked in future,” he adds.
You can no longer rely on customers to come to your website through the front door. “Almost a third of all visits start on a product page rather than homepage,” says Rooney. While you can’t ignore your homepage — since customers still consider it the ‘anchor’ when they’re browsing a site — neither can you assume they’ll definitely see it. That means you can no longer confine offers and branding messages to the home page. “You need to think about branding throughout your website and apps,” he says. For example, on John Lewis’s mobile site there’s a reminder of its ‘never knowingly undersold’ promise, which is displayed near the ‘add to basket’ button.
While many retailers simply have a mobile site or app that mirrors the experience of their main website, John Lewis has found native apps afford greater opportunity for valuable customer engagement. “Ten per cent of customers are responsible for 40% of revenue. Those are the kinds of people we’re targeting with our app,” says Rooney. The app links into the company’s My John Lewis loyalty scheme. “For example, members can shake their phone to display their card for scanning at the till. And when they make a purchase, a digital receipt appears in the Kitchen Drawer section of the app,” says Rooney. He points out the company is also using the app to improve customers’ in-store experience, for example by including a barcode scanner. “Your app should make the experience of buying better for your customer,” says Rooney.
It’s tough on today’s shop floor. Customers with smartphones can instantly find out detailed information about a store’s products — including competitors’ pricing. Yet many staff are struggling with ancient point-of-sale systems. “The customer often knows more about your business and stock than the sales assistant. Sometimes, employees even have to ask a customer to check something online for them,” says Rooney. John Lewis is starting to roll out iPhones to shop-floor staff so they are back on a level playing field, but Rooney says that if you don’t have the resources to invest in the latest technology, then educate staff not to be intimidated by smartphone-wielding customers. “That way, if they see someone scanning a barcode or taking a picture of a product, they’ll have the confidence to go and start talking to them,” he says.
“New technology has put lots of demands on older systems and [as a result] we have found the things we most wanted to do were also the most difficult,” says Rooney. For example, its decades-old in-store systems weren’t able to pass real-time stock information to the online system. Rooney says the company has now built an API to get over the problem, which is improving the functionality of its digital services. “The data you need may be really hard to get at, but we’ve found you mustn’t ignore something just because it’s difficult. We did for a long time, but I’m pleased to say we’re now getting there,” he says.
Only adopt new technologies that your business needs today. “There’s loads of cool stuff out there for retailers, but most of it isn’t going to help you immediately,” says Rooney. The most important word you need to learn when confronted by people pushing technology is ‘no,’ he adds. “What’s important is listening to your customers and focusing on things that are most needed, even if they seem a bit boring and obvious. Don’t be distracted by shiny things.” However, there’s a caveat: “Some shiny things aren’t optional. If all your competitors have something, your customers may expect it,” he says.
The Internet of Things will have a big effect on retail, says Rooney. He’s sceptical of some of the smart products that have so far emerged, but he believes the potential impact on retail could be the emergence of new ways to shop. For example, shopping via watches and TVs, and the fact that products themselves will start to form part of the retail ecosystem. “When products order their own consumables automatically, what’s the role of the retailer? I don’t know if this will all happen as predicted but it’s important to examine it and plan for the implications,” he says.