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John Lewis - Ethics and Emotion Case Study


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With the anticipated John Lewis Christmas ad having been recently released, we at XPotential thought we would take a look at this beloved retailer, and what has made them one of Britain's favourites.

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John Lewis - Ethics and Emotion Case Study

  1. 1. Ethics & Emotion
  2. 2. Ethics and Emotion Case Study Katie Mason
  3. 3. Introduction      John Lewis has succeeded in creating an enduring and valued brand in the UK over nearly 100 years The department store (which sells home-ware, electricals, beauty, clothing, toys and sports equipment) was voted Britain’s Favourite Retailer for 2010 and 2011 There are 35 John Lewis stores across the UK (not including partner supermarket, Waitrose) Gross sales for John Lewis reached £3.33bn in 2011 This quintessentially English, well-loved brand seems to be infallible in most people’s eyes, this presentation examines three key features that have contributed to this prestige and what we can learn from them: – Compelling brand values – Emotional connection – Living the brand ©XPotential 2012 Contents 4 Compelling brand values 6 Emotional connection 8 Living the brand 11 In summary 3
  4. 4. Compelling brand values Since its early years, John Lewis’ values of ethics and fairness have been the foundation of the organisation and a compelling point of difference to other retailers.  Success in their strategy relies on 3 pillars: – “Partners (employees) should gain personal satisfaction by being members of a co-owned enterprise in which they have worthwhile, secure and fulfilling employment and confidence in the way the Partnership conducts its business” – Customers; “John Lewis should recruit and retain loyal customers through their continued trust and confidence in our reputation for value, choice, service and honesty and for behaving as good citizens” – Profit: “John Lewis should make sufficient profit to sustain our commercial vitality and distinctive character, allow continued development and distribute a share of profits each year consistent with Partners' reasonable” Fairness to staff  The values of John Lewis are traditional and ethical – they can be seen throughout the business, but are especially highlighted in the renowned co-operative model that the company uses  All John Lewis employees are referred to as “partners”, and the business is owned by them – not shareholders  Annual bonuses, based on the company’s performance are calculated as a percentage of employees’ wages – in the same ratio for everybody  John Lewis’ emphasis on the happiness of their partners, through their worthwhile, satisfying employment in a successful business has lead to John Lewis being hailed as an outstanding retailer and example of employee ownership ©XPotential 2012 What we can learn  Ethics matter in business; even more now that transparency is increasing through social media, so conducting the business according to a code of ethics is a vital start point  Starting with the staff, treating them well and keeping them satisfied will radiate good service and positivity for the brand 4
  5. 5. Compelling brand values Fairness to customers  Since their early days John Lewis have kept a promise; “Never Knowingly Undersold” – a price-matching policy to deliver honest value to shoppers, but without making low price the centre-point of their positioning  Even in the financial crisis, with competing retailers cutting prices, John Lewis maintained the promise despite this denting its operating profits by 55% in the first half year of 2011 (although like for like sales increased 1%)  Chairman, Charlie Mayfield, said that although the promise cost them in the short term “It is really important that we stick to it”  Maintaining the promise is one reason why John Lewis enjoys such a good reputation; they remain authentic and consistent What we can learn  Regardless of what the promise you make to customers is, it is vital that you stick to it, to prove reliability and build up trust, as well as reinforcing your message and improving its memorability (by remaining true to it in the long term) ©XPotential 2012 5
  6. 6. Emotional connection Emotionality has become a defining feature of John Lewis’ advertising and marketing – building a strong emotional connection with consumers over the years. The benefits of making a positive emotional connection  A key strong point for John Lewis is the brand’s ability to connect with people’s emotions  Over the years, particularly through advertising, John Lewis has succeeded in appealing to emotions – deepening the strength of consumers’ connection with the brand and making it more memorable for them, as well as more of a talking point. E.g. the John Lewis Christmas ads are frequently discussed and shared on Facebook etc. each year Building emotional connection through association  It’s home-ware heritage gives John Lewis a strong footing for building emotional connection, with “home” being an emotive and positive concept for most people  John Lewis has also built up emotionality around the brand by making it integral to especially heart-warming and memorable life events like Christmas and weddings  The John Lewis wedding list service is the most popular in the UK  Being a British brand operating only in the UK, John Lewis also has the opportunity to connect with customers on a patriotic, inclusive level ©XPotential 2012 What we can learn  Emotional connection is a valuable advantage that cannot be stolen by competitors as easily as lowest price, for example  John Lewis have used their product offering and found emotional events that it naturally links with to build positive feeling 6
  7. 7. Emotional connection Building emotional connection through great advertising  John Lewis’ emotive, understated and heart-warming Christmas adverts are now an anticipated part of the season, with the 2012 ad even having “teasers” before its “premier”  The impactful 2011 John Lewis Christmas Advert featured a young boy wishing the days away to Christmas, when he could give a gift to his parents – the advert was so endearing that John Lewis received many messages to say it had been used to demonstrate the importance of giving at various school assemblies  Through great advertising, John Lewis succeeds in making people excited enough to speak about it, without being shocking or losing its dependable image  ‘There is often talk about not over-promoting ourselves, and we are naturally a conservative business. What we have done is demonstrate to the partners that you can market yourselves without being boastful, but (we must) root what we say in truths about the business.‘ Craig Inglis, Marketing Director  Feeding into the emotional atmosphere of the adverts is John Lewis’ use of music; its careful choices have included covers of various favourites performed by up and coming artists (who enjoy a huge resulting record sales boost). They have even gone to far as to release a charity album featuring the music from their ads, and sponsoring Kew Garden’s musical event, “Kew the Music” ©XPotential 2012 What we can learn  John Lewis’ advertising style is cinematic – catching attention by not looking like other adverts, but more interesting  Emotion and story are central, creating a positive, compelling feeling and portraying the brand not as a number of products (subject to change every season), but as a world the viewer would like to be part of 7
  8. 8. Living the brand People warm to the John Lewis brand through its fair and ethical brand promise and business model, along with its emotional but not controversial advertising. However, it is the living proof and experience of the brand that cement its positive reputation. Service preparation  The service at John Lewis is held in high esteem against competitors as a clear point of difference and advantage – in 2011 the company was even approached for service skills training by the police!  In order to deliver the brand-building service John Lewis is known for, staff need to be engaged and motivated. John Lewis employees have more reason than most to care about the service they deliver to customers, as part owners of the company; they are invested and involved in it  Taking care of employees is John Lewis’ first step in delivering outstanding customer service, creating a positive “emotional climate” in the organisation – "We're based on the notion that if we treat our partners well, it will lead to good customer service.“ Executive Chairman, Charlie Mayfield – Sense of ownership, pride and being valued leads to happy employees – Their value is shown by annual bonuses reflecting performance of the business  John Lewis employees are trained in customer service before their first day, and regularly thereafter, instilling 6 founding principles; "Be honest; give respect; recognise others; show enterprise; work together; achieve more." ©XPotential 2012 What we can learn  A customer’s service experience is a loaded moment of truth for brands (especially retailers), so it is worth prioritising and investing in (with every employee – they all represent the brand to customers)  John Lewis customer service success comes not just from training staff, but leading by example with the way they treat them – building service principles (like respect, honesty and working together) into the whole organisational culture 8
  9. 9. Living the brand Service in action  John Lewis’ “Show enterprise” principle is particularly strong. As employees (co-owners) are invested in doing well for John Lewis, they are given the motivating trust, responsibility and opportunity to find ways to meet and exceed customers’ service expectation – E.g. in winter 2009 over 100 shoppers became stranded at the High Wycombe store by heavy snow. Rather than turn them out into the impossible weather, the JL employees hosted an impromptu sleepover, making up beds, providing food and opening toys for children of those snowed in. The result was not only happy customers, but great PR and word of mouth in the community  Ability to move outside the process is critical for the “heroic recovery” secret weapon of customer service – being able to turn a crisis into a loyalty-affirming moment  Training in knowledge as well as manner is essential in delivering a service that customers value; being able to communicate a broad understanding of the products helps demonstrate authority and earn the trust and confidence of shoppers – adding value over other retailers  With expertise and education, John Lewis has set itself above others in value-adding service, e.g. through helpful in-store events such as a Men’s Perfume Class in 2010 to help men choose the right gift, and a Cashmere Care Clinic for Christmas 2012 – as many customers felt uncertain of how to look after Cashmere items (holding them back from purchase) ©XPotential 2012 What we can learn  Giving staff the freedom from bureaucratic procedures to find the right solution for each customer is often held up as the key to good service – if staff are trained and treated well, their instant actions will be far more valuable to the customer than a delayed standardised response  Creating insight-driven opportunities to connect with customers and help them through sharing of expertise is a great way to build relationships and foster trust and service-oriented image 9
  10. 10. Living the brand Consistent service through different channels  Living the brand and delivering service is a challenge online that John Lewis rise to; maintaining customer service levels and the personal touch  Online now accounts for 24% of total John Lewis sales while the Click and Collect (buy online, collect from local store) service has grown 114% over the last year (Sep 2012)  The website is user-friendly and reflects the style of the physical stores, but contact details like phone numbers are made clear to maintain the personal element – it was voted Britain’s Best Online Retailer by Which? In 2010  Online podcasts, videos and advice guides also help to deliver the John Lewis service in the online media  John Lewis also has one of the fastest responses to twitter posts, with the average time taken to respond being 3h 23min (median average 16 min)  On facebook, reply posts from John Lewis always provide a name, “Hi this is Miriam, sorry to hear about….” keeping the personal touch that stops customers from feeling distanced from faceless corporations  With customer service being so integral to the John Lewis brand, when they chose to collaborate with a travel agency, they partnered with luxury travel company Kuoni for their customer service focus and expert advice, creating shop-in-shops at a number of John Lewis stores ©XPotential 2012 What we can learn  Online is an un-ignorable channel for retail but requires a creative approach to delivering quality service; e.g. online tutorial videos integrated into the site (that are easy to find)  The online world can remove personal touch, so fast response to social media queries, live chat and telephone contact-ability help to restore it and retain customers who could otherwise easily click away to competitor sites 10
  11. 11. In Summary The lessons we can learn from John Lewis:       The inclusivity and fairness that John Lewis is built on helps to avoid the us-and-them attitude that can lead to conflict between employees vs. employers, and staff vs. customers, allowing for a more positive atmosphere, better service and a stronger brand John Lewis invest in service, paying attention to detail and finding innovative ways to bring value through service to customers (e.g. insight-driven tutorials that address customers needs) They allow staff to think on their feet, placing trust in their ability to find the right solution for customers (which will keep them satisfied and build loyalty) The theme of John Lewis adverts is inviting, rather than selling – finding ways to connect emotionally with consumers (particularly using emotive tools like music), building affection for the brand rather than hard-selling a product Creating an emotional connection requires understanding of consumer’s emotions and life surrounding a product / purchase (e.g. Cashmere Care Class; cashmere is not just a glamorous treat buy, but something special that you want to protect and keep using) One of the most important success factors of John Lewis is its trust-worthy consistency; keeping promises and not being fickle in style, message or tone ©XPotential 2012 11
  12. 12. Who are XPotential? XPotential is a brand focused strategy consultancy that helps to align individuals, functions and organisations throughout the world to create and deliver Brand Value. We work with some of the world’s biggest brands to deliver outstanding results. We orientate individuals and teams in the organisations to focus their responsibilities to deliver value to their most important asset - their brand. We are proud to have worked with over 30 companies in over 50 countries and touched tens of thousands of individuals, delivering some of their most impressive business results. We do this through working closely with the leadership of organisations to develop Brand Centric Vision and Strategy through a deep understand of the challenges and opportunities for the Brands and the Company, the Brand Vision and the key audience for change. We then design and implement a programme of brand centric change including communication, engagement, training and follow up. We have worked both cross functionally and also through specific areas including sales, supply chain, innovation, marketing, R&D, finance and HR. ©XPotential 2012 12
  13. 13. “We align individuals, functions and organisations, throughout the world, to create and deliver brand equity” Take a look at our website to find out more about us: ©XPotential 2014 13