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Insights

An Excitable Dragon isn’t the answer to John Lewis’s problems: it needs to be a trailblazer again

At one time, John Lewis set itself apart from the competition with its Christmas advertising. Now, it's far from unique, and with other concerns to contend with, is it time the company focused its efforts on other issues?

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An Excitable Dragon isn’t the answer to John Lewis’s problems: it needs to be a trailblazer again

Another year means another John Lewis advert. It’s the big one that everyone waits for – a standard bearer that’s expected to set the bar every Christmas. But with great responsibility comes great investment, and with John Lewis struggling to remain profitable, is its money better spent elsewhere?

The beginning of autumn ushered in some particularly bad news for the brand. In September, John Lewis reported its first-ever half-year underlying pre-tax loss, to the tune of £25.9 million. Admittedly, the same period the year before wasn’t stellar, but it was at least in the black – it reaped an £800,000 profit.

At the time of the financial announcement, the gears were in motion for the production of what is, arguably, John Lewis’ best-known asset. This year, its Christmas advert came in at an estimated £7 million, not counting additional costs for media placement and complementary products. That’s more than many rivals’ entire TV advertising budget for the full year.

But now, the “big ad” is more the “done thing”. Rivals like Asda, Sainsbury’s, Aldi and M&S have spent years making moves on the department store’s festive marketing; what was once John Lewis’ defining moment in the winter sun has now become more of a Cold War. While the real Cold War was a stalemate, John Lewis – more than any other player – seems closer to losing its grip on power than many of its rivals.

It’s time for John Lewis to move on from such a high-ticket Christmas ad and focus its investment on the other problems it may have.

Has the golden age passed?

The John Lewis & Partners ad is now such a cultural phenomenon that it has its own Wikipedia page. This year’s offering, which charts Excitable Edgar’s shift from social pariah to beloved member of the community, came in as John Lewis’ second-most watched Xmas spot of its last six in the initial 24-hour period.

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However, CityAM also pointed out that in a poll by Unruly, newcomer Very beat John Lewis as the most engaging Christmas advert, noting that “fear of missing out” seems to be the one thing powering the trend for big-budget commercials. He explains: “Bearing in mind the increasing costs of rents and wages, it’s a surprise that high street chains are still spending so much on glitzy commercials. But perhaps the reason they are doing so is simply due to an all-too-human fear.

“Fear of missing out is an understandable emotion, but perhaps not a logical one. Brands need to get over this anxiety, and spend their money more wisely next Christmas.”

Yet John Lewis’ advertising investment has remained high, despite profits going the other way. It’s time for John Lewis to rethink its spending strategy ahead during 2020 – especially when a £100 advert can make plenty of headlines in its own right, and budget can be diverted to more pressing matters.

What should John Lewis be focusing investment on?

Customer service

If there’s one thing holding customers back from committing to buying from John Lewis, it’s the reviews of its customer service. A lot of this stems from its legacy IT system problems; back in 2015, it was reported that its tech infrastructure made “dealing with some problems impossible”. While these IT issues were being actively resolved as of 2017, the trend for poor reviews continues. Of all the things that a few million pounds could help, it’s an investment in the very thing that made it the people’s choice.

Core services to get people into store

As we discovered in our RES 100 this year, John Lewis placed in joint 41st place out of 100 for six core services. Mid-table does not mean average performance, though; it came out with a score of just 31/100.

Much of this was down to two core services that either lacked or were unavailable, despite both generating potentially massive footfall: click and collect, and store stock check.

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We’re big on click and collect for many reasons, but it must be fast and free to deliver on consumer expectations. John Lewis only makes it free for orders of £30 and over; it’s £2 if you spend less. Meanwhile, you always have to wait at least one night to receive your order – placing your online order before 8pm only makes it ready for you to collect after 2pm the following day, even if the product’s in store.

There’s no way to know if the item is in store, as John Lewis doesn’t operate store stock check. As we said last year, accurate inventory is the defining retail investment for 2019 because it has the potential to save businesses millions on posting things to store; instead, they can sweat in-store assets.

Those who were unwilling to make that accurate and transparent inventory a priority this year are already falling behind. John Lewis still has a small window to catch up, but if it doesn’t, it could haemorrhage even more visitors who have come to expect it as a standard offering from dozens of rival retailers, denting trust of consumers who need the guarantee that the brand will give them what they need, when they need it.

Moving the advertising creativity into store

While John Lewis’ stores feel cleaner, more modern and often less cramped than other department store rivals, this doesn’t make them averse to the same problems that have led to rampant closures by rivals Debenhams, House of Fraser and M&S – or the outright death of BHS. It’s time for John Lewis to put its money into trialling new ideas in store and break the mould that now suffocated its rivals.

It’s in a good position to do this. As the BBC explained earlier this year, “[e]mployees own the company and so they are trusted to take on more consultative roles with shoppers, she says, offering the kind of service an online shop cannot.” What’s more, the report also pointed to how Selfridges, which continues to do very well, is regularly putting money into experiential things to get people into store; at Christmas, it “helped draw customers through various entertainments including a Christmas cabaret, confetti cannons, visits from Father Christmas and choirs.”

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John Lewis has the reputation to pull this off, and the creativity to make such experiences available year round. Whether it’s product and partnership strategies, charity drives (such as its work with Age UK for its “Man on the Moon” ad), community initiative pairings or just the odd celebrity, it’s better than the norm: lots of products, lots of floors and little differentiation from what John Lewis offered ten years ago.

It’s time to do things differently again

While there’ll always be a Christmas ad for John Lewis – it’s still a strong means of reaching an expectant audience, after all – the whole reason the company made a name for itself in that arena in the first place was because it was a trailblazer. Now, it’s stagnating as everyone else does the same as it – and we all know what happens to high-street retailers that stagnate.

By reinstilling both trust and excitement in customers – specifically through its high-street presence – the company could really go back to the glory days. However, it’s going to have to act fast; it only takes another couple of poor financial announcements to seal the fate of its stores in the coming years. Just ask its rivals.

Insights

Are the statistics about voice commerce all talk, or is it time for retailers to make a statement?

Once again, voice commerce is being touted as the next big thing in ecommerce. But after so many past predictions failed to come to pass, can retailers make it work – and if so, how do they best plan for a possible boom in the technology?

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Are the statistics about voice commerce all talk, or is it time for retailers to make a statement?

It’s no real surprise that 2019 brought the biggest Black Friday and Cyber Monday to date. However, a few eyebrows may be raised by the purported emergence of a retail technology which, up to now, hasn’t had the success regularly predicted by experts.

This Black Friday, transaction value rose 16.5% in the UK, according to Barclaycard; Adobe claimed that Cyber Monday 2019 was the biggest in US history, raking in $9.2 billion (£7 billion). However, some of the most popular sale purchases during these events – voice assistants like the Amazon Echo and Google Home – are apparently coming full circle and now helping consumers to buy more products during these sales.

Prior to the sales events, Wunderman Thompson predicted that voice commerce would account for 2.5% of all goods purchased online, “rising to a 10% share by 2022”, comparing the emergence of the technology to the widespread boom in mobile ecommerce in 2016.

Hugh Fletcher, the agency’s global head of consultancy and innovation, explained: “The signs are all there: convenient, fast and easy, voice commerce will make its biggest mark on the retail market to date. Amazon will certainly be the biggest player in the space, looking to discount its own voice-enabled assistants to move further into the home and ‘own the interface’ with its customers.”

We’re yet to see statistics about just how many purchases were made using voice commerce during this year, but in 2018, just 2% of Amazon customers used Alexa’s voice shopping feature. That’s not 2.5% of all goods bought online; that’s 2% of one consumer base with a company that has pushed its voice technology incredibly hard.

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If you’ve read any of the predictions regarding voice tech in the last few years, it may be that Wunderman Thompson is continuing a trend for pie-in-the-sky forecasts for the technology. Still, it does beg two simple questions: should retailers plan for a voice-powered future, and if so, what should they do?

To understand the opportunities, it’s important to first look at the current state of voice technology.

What problems do people have with voice technology?

Ever since the introduction of Siri on mobile devices in 2011, and later the creation of the smart speaker with the Echo in 2014, the excitement surrounding voice commerce hasn’t relented. Yet here we are, eight years on from its inception. In real terms, the problems that consumers had with Apple’s pioneer eight years ago continue to hamper the user experience now.

Voice tech simply doesn’t work well enough

In April, leading market research company Forrester tested the ability of the leading voice assistants from Amazon, Apple, Google and Microsoft. After asking every single one a set of 180 questions about products and services, each one was ranked as passing or failing the challenge. As a whole, the quartet couldn’t answer two out of three questions (65%).

Forrester cited “failure to provide direct answers”, “inability to understand context or conversation”, and “bad user experience” as the three main problems facing consumers. Naturally, not getting an answer when asking comparative questions (“which company sells the softest men’s sweaters”) or even which products are best, means the research stage is hampered.

Why this affects voice commerce: Even if browsing was done on a laptop or mobile, voice tech seems like an unnecessary extra step: you might as well buy with those devices if you’ve already used them to search. Meanwhile, the poor dependability of voice recognition across assistants like Echo is enough to stop people combining bad service with their credit card details.

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It’s too slow for today’s impatient world

One of the most obvious issues with voice technology is that you have to have a full conversation to get anything potentially done. For every question you ask, you have to listen to an answer.

Why this affects voice commerce: Say that we live in a perfect world and voice commerce works. You want to buy a new, different pair of trainers. You could reasonably find yourself asking questions about the sizes available, colours offered, the price of each pair, materials used (e.g. suede, leather), review rating, delivery timings and costs – and that’s before you’ve even chosen and confirmed your purchase.

In the same space of time, you could have compared much more quickly online, across a vast array of sellers. And all the while, you still don’t know what your trainers will look like until you get them – another massive issue with voice commerce.

Most products still need visual checking

This is where Wunderman Thompson’s comparison between voice and mobile ecommerce falls flat. Mobiles didn’t exactly reinvent the wheel when taking people away from laptops or even tablets; they’re just a smaller, more refined version of existing technology. The biggest challenges were for retailers to make websites better for the experience, while consumers needed time to trust their devices as a means of purchasing.

Why this affects voice commerce: Voice purchasing effectively make the purchase of countless, aesthetically important items instantly problematic: clothing, home furnishings, beauty products and electronics all rely on the eyes to sell.

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The reality for voice commerce: repeat/necessity orders

The future of voice assistants in retail isn’t their use as another option for a sales process that’s already fixed. It’s about fixing a different issue entirely.

Speaking with Digiday, Goodway Group’s Amanda Martin put it simply: voice assistants can be used to purchase “cheap, commoditised products that need to be replenished regularly”, such as toilet paper or kitchen towels. It’s the smart speaker’s job to “remember the customer’s purchase history and the customer will be easily able to carry out repeat orders”.

Ultimately, voice commerce could find a useful niche by putting a stop to forgetting those banal necessities. Those items you know you like a certain way, but ultimately don’t care too much about, will no longer be recorded through notes on the fridge or your phone; instead, you’ll just add it to your shopping list, or buy it outright, using your voice assistant.

To make the most of this functionality, retailers can explore options to respond to simpler demands with convenience and certainty at their heart. One of the pioneers of voice technology, Amazon, already operates a Basics range. As James Moar of market research firm Juniper told Wired, it’s “full of products that are simple enough to not need comparison, and so is most able to recommend products to be bought through voice”.

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This does, naturally, have the opportunity to extend past commodities. Should you have bought a pair of size 12 Adidas Gazelle trainers in blue and white suede and you need a replacement pair, you’re no more than a couple of voice commands away from ordering them again.

Retailers can still prepare for a possible boom in voice commerce

Voice commerce is certainly happening, but not at the rate or in the ways predicted by experts in its formative years. However, there are some major takeaways for retailers who have the R&D capabilities and budgets to explore their options. After all, trailblazers will undoubtedly stand to reap major benefits if it does take off.

Optimise your website’s search, product markup and capabilities

The technology may not be able to explore the web in the ways mobiles can right now, but it may be something that emerges as major players explore ways for smart speakers to do it. Naturally, your products will need to be found if you’re going to sell them via voice.

Consider voice app opportunities

Anyone who’s used an Amazon Echo knows that it’s not exclusive to Amazon selling. The likes of JD Sports, Sainsbury’s, AO, Morrisons and even Autoglass have created apps to help them do their shopping, with varied success. Explore the possibilities here: if a boom in voice commerce comes, you’ll already be there across devices and, if you’re better than your peers also operating on the platform, you’ll get a leg up on them too.

Consider which products – if any – may be in regular demand

It’s not just supermarkets that will see regular orders of the same goods. As with AmazonBasics, there’s a real market for products required and delivered on a regular basis. Consider if there’s an opportunity to build loyalty with emerging voice commerce customers by offering FMCGs via voice.

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Add voice search SEO to your site

Providing your product markup is top-notch, it stands to reason that you could bolster your position further with the addition of voice search SEO to your website (which is markedly different to traditional SEO). As Forbes’ Gabriel Shaoolian explained, “search engines such as Google are placing a higher emphasis on voice search optimisation” – meaning you get the benefits of better SEO performance overall.

Have fun with your brand’s voice presence

Don’t forget that voice commerce, and the technology behind it, is still evolving – as a result, it’s still exciting. Even if it’s not for you or your product offering, don’t exclude yourself from voice tech; just having a presence, however superfluous or even daft, will maintain or create connections with your customers across another platform.