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Thursday, 17 January, 2002, 08:40 GMT
John Lewis' internet adventure
John Lewis logo
John Lewis launched its new website in October and two months later was experiencing more than 1,000 orders a day. BBC News Online talks to Simon Palethorpe, head of business development and IT, about his experience of setting up the site.

Why did John Lewis wait until October to launch the website?

John Lewis already had a small transactional site running for a year or so, selling a limited range of products.

Simon Palethorpe, John Lewis Direct
The site's popularity took Mr Palethorpe by storm

There wasn't much investment in it by the partnership. They had adopted very much a "wait and see" policy.

Last year they decided the time was right so they bought the UK operations of Buy.com to accelerate their web strategy.

The deal completed on 7 March and it became a racetrack to get a completely, new revamped web operation up and running.

We launched on 8 October.

How has the site performed so far?

It has gone great guns and exceeded all our expectations.


John Lewis has let the other people make a lot of the mistakes - and we have avoided those in setting up our own strategy.

In the month before Christmas, we were receiving more than 1,000 orders a day.

And the average order size was three products when we had budgeted for half that.

From an economics point of view, this makes all the difference because you have fixed shipping costs.

We have also been getting 800,000 page impressions per day.

How did you cope with more demand that you expected?

It took us somewhat by storm, but it was not so out of range that it hadn't exceeded our capacity.

John Lewis delivery van on the road
The site completed 99% of its orders

We pulled out all the stops to meet demand. Our warehouses did exceptionally well under difficult circumstances.

We managed to meet all our deadlines - 16 December was the cut-off for orders - and we delivered what we expected to.

The site was able to complete 99% of its orders.

How did you promote the site?

We marketed to existing John Lewis customers and account holders.


You have a high-street presence and then you become a success online - that really is the best model.

The launch was also supported with mini-catalogues that previewed the best of the selection online.

We also have online partners, such as MSN, and were able to market through online channels.

Research has shown that it is more effective to market online, rather than through offline channels.

Why do you think the site has done so well in a short time?

I think people have been waiting for John Lewis to have a good web operation.

There is also limited geographical distribution with the stores - there are only 26 stores across the country - so there is an access issue.

And generally people are getting more used to buying online.

It usually takes two years after people come online to become active shoppers.

Do you think most of the shoppers were John Lewis customers?

Not all the analysis has been done, but my suspicions are that a disproportionate amount will be account holders.

The website helps the stores as well in what is known as the "halo effect".

People do their research online and then go into the stores to buy the products.

Do you think that John Lewis has benefited from the pioneering efforts of other e-tailers?

John Lewis has let the other people make a lot of the mistakes - and we have avoided those in setting up our own strategy.

Other people have also constructed over-complicated sites and didn't focus on getting return for the effort put in.

You can't build functionality with no bottom-line impact. Activities should be directed by the bottom line.

John Lewis has come into the arena when the attitudes have changed with people taking a more rational approach.

There is also an increasing dominance of established retail brands.

You have a High Street presence and then you become a success online - that really is the best model.

Very few of the pure-play e-tailers have made it over the line to becoming trusted brands. Amazon is the only one I can think of.

How long will it be before the site is profitable?

We have a three-year vision for the business which will get us to profit quite quickly at a small scale.

We have invested between 30m and 40m over three to four years, which is basically the same investment as in a new department store.

That should get us to a breakeven point.

You have the choice of building the business into something big and significant but you push out the breakeven date.

Are you able to disclose any sales figures?

At the moment the sales figures are being kept under wraps.

Our sales are a very small proportion of the John Lewis group sales.

At the moment, the site's sales are the equivalent of a small store.

But it won't take many years to scale up to the size of a bigger store.

Do you have any plans to fold the UK Buy.com site with JohnLewis.com?

There are no current plans to pull them together, but we will review how these two work together.

Buy.com had a good Christmas, but it is undoubted that JohnLewis.com took the lion's share over Christmas.

Are you planning any new functionality for JohnLewis.com?

We plan to expand the portfolio of products sold on the web.

There are currently two main areas - home, including bed, kitchen and bathroom, and gifts, including picture frames, gadgets, watches and sports goods.

We are building the assortment in those areas and then over time we might branch out.

There will also be some range refinement.

We plan to hire more people, but there won't be a dramatic advance.

Did you do your own Christmas shopping on the site?

Yes, I definitely did! I bought my girlfriend's present from JohnLewis.com.

I tend to do most of my shopping online.

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 ON THIS STORY
John Lewis' Simon Palethorpe
"We were set the challenge of getting a revamped web operation up and running and ready to capture the Christmas traffic"
See also:

17 Jan 02 | Business
The year e-tailers did so well
15 Jan 02 | Business
Etailers 'raised Christmas prices'
05 Dec 01 | Business
E-tailers prepare for Xmas boom
26 Nov 01 | Business
Hopes rise for internet stores
29 Nov 01 | Business
Consumers urged to shop online
26 Nov 01 | Business
Safeway cyberstore shuts up shop
22 Dec 00 | Sci/Tech
Christmas in cyberspace
07 Nov 00 | Business
Christmas cracker for web retail
17 Jan 02 | Business
John Lewis' internet adventure
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