Online personalisation next step for John Lewis

Technology is bringing a personal touch back into retail as customer demand for tailored services, John Lewis’ managing director said.

Andy Street, managing director, John Lewis

Department store boss Andy Street told The Yorkshire Post that the group plans to build on the success of its Click and Collect business by incorporating personalised online offerings.

The mutual, which reached record profit in 2014 of £250m, has seen its online business climb rapidly with 19 per cent growth year-on-year.

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Of this, around half of shoppers opt for in-store collection over home delivery.

Mr Street said online fashion retail has seen dramatic growth in recent years, up 40 per cent in the last year.

In addition to an extended range of clothing - around 200 branded lines are available on its website - the department store wants to offer personalised online shopping.

He said: “We’re beginning to be able to tailor what is on the site to an individuals’ historical preferences.

“We’ll be presenting to you what we think is right for you based on your purchase history, so it’s almost like a personal website. The link to the shop is lots of people want to click and collect it and returns have to be very easy.”

Customers want retailers to “know them individually”, Mr Street said.

“If you think about a department store 100 years ago, the department store’s personnel knew Mrs Bloggs.

“What’s happening with the deployment of technology is we’re getting back to knowing Mrs Bloggs, but in a different way.”

The shopper still “cherishes” their personal relationship with John Lewis, he said.

“It’s still that real, personal connection, just for a different era,” he added.

Rising online and multichannel demand has required significant investment in logistics and IT, Mr Street said.

It has invested £200m in two national distribution hubs, which have also created hundreds of jobs in Milton Keynes.

“The majority of our capital is now spent on logistics and IT,” Mr Street said. “That is how retail is changing.

“Yes the shop has still got to be brilliant and inspiring, but it’s got to be twinned with that real capability.”

In 2014, total sales growth was 7.9 per cent; in the first three months of 2015, this has fallen back to around 2.9 per cent.

This is largely due to slowing demand in electricals, due to “less new innovation” in the market, Mr Street said.

John Lewis currently has stores in Sheffield and York, which opened in April last year.

Its York store is performing ahead of forecasts and has stimulated a rise in online orders in the region, Mr Street said.

Its flagship Leeds store is set to open in 2016 as part of the Hammerson Victoria Gate development.

Around 1,000 new jobs will have been created within two years thanks to the York and Leeds openings.