Changing Business Models Luke Kingsnorth John Lewis

Changing Business Models

Luke KingsnorthJohn Lewis

13th May 2008

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Where did it all start?

£6.8bn sales (6.3% up YOY)

£411m profit (15.7% up YOY)

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The birth of Johnlewis.com… 1999 – Launch of

Johnlewisnow.com (limited selection, 20 orders per day)

2001 - launch of johnlewis.com, purchase of Buy.com for £2.8m

Promise of £30m investment with a view to 5,000 products online in 5 years

First Christmas 1,000 orders on busiest day, 800,000 page impressions

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Johnlewis.com growing up… Sales of £268million, an

increase of 44.6% on the previous year

24,000 orders on busiest day & 3,000,000 unique visitors in peak week 2007

Growth in online sales represented 56% of John Lewis’ growth

Full line department store assortment – 35,000 SKUs and growing

Complete in-house operation – 180 Partners plus outsourced contact centre and fulfilment operations

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Drivers for change

Changing customer behaviour & expectations. The role the internet plays in purchase in store and vice-versa

The site allows a national footprint that is beyond what we could offer through stores.

24/7 shopping mentality

Multi-channel customers spend more

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How is John Lewis changing?

Johnlewis.com was kept as a separate SBU to allow for rapid change, now it’s time for it to be more integrated (service, operations, stock & marketing)

Very real awareness of the need to be ‘multi-channel’ and not just ‘multi-distribution’

The need for one view of customer and as consistent service as possible regardless of channel. Bringing the Partner difference to Johnlewis.com

Real desire to embrace the idea and implications of integrated marketing plans

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What does integrated marketing look like at JL?

Start with consistent objectives

Set clear, reportable KPIs

Pick the right media

Execute with consistency

Review as one

LEARN

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Search by numbers

Search marketing accounts for 50% of all traffic to Johnlewis.com

Paid vs Natural search is 50/50

PPC spend has grown by 300% from 06 to 08 and is 50% up from 07 to 08

It’s a key area of marketing media with TV, Catalogues, Press and online

Spend will continue to increase in line with online growth and because of inflationary pressures

Managed by account team at Steak Media & John Lewis PPC Manager.

Board level interest in the plans for search and potential future impacts.

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Search integration

Brand bidding requires a focus on cost control and messaging

Full product listing allows us to tackle the ‘long-tail’ of search. This requires a lot of work due to size and churn of product offering

Linking with ABTL advertising is key for consistency and brand building. Vital to have close links between media buying & search agency

Links with seasonal events through PPC allow us to target ‘inspiration’ searches

Brand

Product

Advertising

Inspiration

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Any questions?