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Innovation

Do you speak channel or customer?

Retailers must decide which language they speak to position their businesses for the future, according to Sir Charlie Mayfield, chairman of the John Lewis Partnership.

Speaking at the NRF Big Show in New York earlier this year, Mayfield declared the age of multichannel is over, and he isn’t a big fan of the word ‘omnichannel’ either.

“The notion of two different channels is actually incredibly unhelpful in thinking about how you develop your business,” Mayfield said.

10 years ago that kind of thinking may have worked, he argued, but today’s consumers shop, browse, order and interact across multiple channels.

“Channel as a language is something that is spoken by retailers, but increasingly is just not understood by many, many customers,” he said.

Mayfield said speaking ‘channel’ — with a focus on traditional metrics such as like for like sales, sales per square metre and same store sales — was a bit like, “clinging to the side of the waterfall”.

The alternative, speaking ‘customer’, uses a different set of metrics to measure success, which revolve around the shopper, for example, sales per customer and profits per customer.

“It’s a very, very different mindset,” Mayfield explained. “It is about embracing that completely. What it involves is a whole organisation learning that different language, it involves a very different set of investment priorities.”

Mayfield said the John Lewis Partnership is on the way, but hasn’t made the full transition to this kind of thinking. For context, John Lewis generated 40 per cent of its total sales online over Christmas.

“We think that those figures are probably greater than any comparable retailer like us, of our size anywhere in the world,” Mayfield said.

The process has taken around 15 years, Mayfield said, and required a huge investment in logistics and supply chain.

“We have effectively had to reengineer our business in an extraordinary fashion,” he said.

Shoppers can now make an order at 8pm and the customer can collect it from any Waitrose or John Lewis store from 2pm the following day.

“It is an incredibly convenient and an incredibly popular proposition,” he enthused. “It required a whole different level of investment in supply chain, in systems and in technology to enable that kind of customer service.”

This article was originally published in Inside Retail’s February magazine, click here to subscribe

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