Contextual Analysis Of John Lewis

Contextual analysis

2013 proved to be another year associated with cautious financial management and more resilient consumers. A declining median household income of 4.5% throughout 2012/2013, among new technological advancements, and increased competition towards John Lewis in the retail industry posed several dynamics that needed addressed by the strategic team to maintain their competitive advantage, despite their successful brand re-direction in 2009. The case reports that JL was struggling with a poorer performance due to a low wallet share among its key target consumers. Studies conducted by Mintel (2013) showed that the year-on-year growth in retail sales volume was progressing slowly, with consumer demand situated at the high-low ends of the spectrum, rather than JL’s target segmentation of
middle-class individuals.
It was also estimated that one fifth of consumers planned to purchase electronic equipment in 2013, while two thirds of retail sales will be accounted for by the individuals aged 55 and over, however, they are also more pessimistic than the average consumer towards future financial income and might be more resilient than average when it comes to leisure expenditure. JL was entering 2013 with a lower growth in gross sales and operating profit in 2012 when compared to 2011, affecting their finances and requiring modifications in their key competitive advantages including an outstanding corporate culture keeping customer benefit at their core. With these internal and external issues, John Lewis is forced to modify, perfect, and present their value proposition, positioning, and strategy for 2013 and onwards to the public successfully, to encourage higher spending, and become not only a trusted
retailer, but a loved one.
2013 was also a big year for retail technologic launches, such as the roll-out of wi-fi in stores to enable a tablet network helping improve customer service significantly by reducing queues and enable interactive marketing through displayed images and video content across shopping floors. Customer service is a key strategic trait for John Lewis, therefore, the need to monitor and keep-up with industry trends is important in ensuring competitive advantage and achieving their marketing objectives which will be described. The advancements on-store locations were also complimented with digital technologic advancements such as digital interactive catalogues customers can access through their mobile devices, for a more integrated shopping experience, which is another important trait for John Lewis and their 2013 Christmas campaign. The blurring of the traditional shopping experience and the online one aims to engage customers for a longer period, and increase their frequency in these areas for higher sales figures. Overall, these are technologies aimed to be consumer friendly, which presents more products, real-time updates on promotions and inventory, and are shared by customers with relatives and friends that find them useful.
John Lewis positions itself as a selective retailer among high street department stores with a strong emphasis on value by providing premium quality and durable products at a value price. Besides these competitive advantages, they are also highly focused on ensuring a high standard in customer service, which is also supported by the company’s nature of a partnership where every employee has a stake in the business, therefore offering their best services in terms of information, availability, readiness, and other factors customers expect when shopping at JL. The retailer’s focus on a target segmentation of individuals pertaining to an AB social grade is also observed in an in-house produced infographic indicating 48% of JL customers have a household income above £30,000, another important observation is that 64% of its customer base use both in-store and online channels, aiding into their marketing strategy and the need for integration among them to provide a clean and simple experience for people from 20 to over 55. Due to consumer trends and increased resilience of older adults, John Lewis must also target young urbanities that are willing to shop through multiple mediums. Since 2009, including 2013, JL segments their market by primarily focusing on behavioural and psychographic traits rather than demographic, including their personality, attitude and human values such as sharing and caring for each other. JL serves this market segment with a differentiated marketing strategy aimed to hit emotions with certain individuals that share the mindset of thoughtful giving and expressing care through their purchases. This strong feature of emotionality associated with John Lewis and their annual Christmas marketing campaigns not only helps achieve their marketing objectives of keeping existing customers loyal and attract new ones, but it also builds an emotional connection with their customers making it stand out among other retailers, leading to increased customer frequency and market share, two primary market objectives of JL. This success of becoming part of popular culture and creating a national event of the ad appearing on national TV helps JL become memorable and gain goodwill among consumers, therefore gaining a priceless competitive advantage that other competitors cannot replicate.
Given their target market segmentation, JL focuses on premium quality and durability when it comes to their wide variety of products, and presents this value proposition of more for the same through emotion based branding and a high-standard customer service, which is a unique position among other retailers such as Debenhams, Mark & Spencer, and other high street retailers that present a more descriptive and objective image of their brands, embracing logic rather than emotion. This operating situation is a response to poor market performance and a more restrained consumer in terms of their spending, and choosing to offer an idea that aligns with their values rather than focus on price value alone creates a stronger relationship between the customer and the retailer, which might persuade them to shop there due to a strong goodwill and friendly environment that shares the same ideas and expectations a customer has. Their 2013 Christmas marketing campaign had to align with their marketing mix and value proposition to the customer, and also take into account new technological advancements in the retail industry, as well as changing consumer expectations and strict financial situation, therefore, a high integration level had to be achieved through multiple channels with a strong link and partnership with the PR department to produce a strong pre-launch marketing campaign to sustain goodwill and create anticipation among external audiences such as the media and a wide array of consumers.
Marketing Campaign analysis