How have PC and associated product sales been for John Lewis in the last year?
Obviously, the market has grown a lot and looking at where the total market has gone, I’d say we have done better, particularly when you consider we’ve got 26 shops and one internet portal. We’ve done extremely well and we have grown our market share in the sector over the past 12 months.
What have been the best-selling products in the technology department in the past year?
I would certainly say in the last 12 months laptops have experienced explosive growth for us and that has been the area that has been really critical to our success overall. I think a lot of that is driven by the fact that so many of the other technologies that you want to use require you to have a computer to be able to maximise their effectiveness.
Everything you buy now you need a PC to do stuff with, so whether that’s downloading music from iTunes, keeping everything on their PC that they need to stick on an MP3 player, or whether it’s the fact that a lot of people will transfer stuff into digital photo frames from the stuff they keep on their computer, and a lot of people do the same with their camera.
A lot of people are currently using their computer as a hub, and certainly from our perspective what we found quite interesting was with the market as a whole. It’s quite clear that desktops have not been the way ahead, it’s all about laptops which is primarily because of wireless networking. But we have had good sales as well on desktops.
What we’re finding is that a lot of our consumers are shopping with us because we can do the total solution; if they’ve got sufficient space at home they will still have a desktop. It’s almost a psychological thing, that you still want this desktop in the corner. But then they will have further laptops which are wirelessly networked into that.
The other thing for a lot of the customers we talk to, is if there’s a family at home there seems to be the fact they have one desktop – which dare I say it is probably Mum and Dad’s desktop – and the children will be the ones where they seem to be adding more laptops.
So now they’ve discovered wireless networking and they’ve become technically savvy enough to think ‘well I’ve got a router I can cope with this.’ And it’s not just about teenagers doing GCSEs, it’s for younger children as well so that they’ve got the capability of doing their own surfing away from being stuck on that desktop.
Is John Lewis better placed to accommodate the family market than the specialists?
I think we are in a good position. We know that one of our great strengths is the knowledge that our staff or partners have. And I think we’re in a good position to demystify technology for customers.
We are a full line department store so we get the family customers perhaps more easily than some other technology specialists because people might be in buying other things. So then the fact that we’ve got a good specialist team within our consumer electronics, audio and TV departments means customers will say ‘Okay, well we’ll go there as well then.’
Not only are we able to prove a consumer electronics solution all under one roof, we are a department store so we can do everything under one roof.
Do you think add-on sales have been a key part of John Lewis’ recent success?
Add-on sales have certainly helped. The fact that we can do the total solution makes a big difference. But I think the primary driver that gets a lot of people into our stores is – a classic example being – if someone’s had a desktop that they might have had for a number of years and they’re thinking they might like to connect a laptop or laptops to this wirelessly, which can be a scary prospect if they don’t even know what a router is. So we do well with the add-ons, but customers are also often wanting to buy laptops at the same time.
Would you say you are a destination for technology products as well as benefiting from shoppers already in John Lewis for other reasons?
Because of the demographic of a lot of our customers, we do very well on technology when it’s early in its life-cycle so therefore we do get people in who are very knowledgeable; and equally knowledgeable are our partners.
If I think about something like digital photo frames, we had a really great Christmas. We also had a particularly good Christmas the previous year when they were relatively new to market and not that mainstream.
How much has the computing aspect of your stores expanded over the years?
In the early nineties it was all about big hi-fi separates and speakers, and big CRT TVs, and there was a little section in the corner for computing. Of course gradually we’ve put more and more space over to it.
From our perspective as we move into media centres, we know that we have a high proportion of our customers who are pretty technically enabled and they will be the people who perhaps have a little more disposable income and they think ‘right, I’m going to move into the next technology and eBay what I’ve got left.’
What expansion plans do you have, in term of opening new stores or increasing floor space dedicated to computers in your current sites?
Where we’re refurbishing stores we will be increasing floor space dedicated to computing. If you were to go to our Nottingham store, for example, where we had a refurbishment last year, you’d see that computing has got more space and it’s got more prominent.
We’ve just opened a new shop in Cambridge before Christmas and are opening a new shop in Liverpool which is 20 times the size of the current store, which is all very modern and exciting, and is part of the Liverpool regeneration. That opens at the end of May, and will have a much larger computing area than the existing branch.
What we’re really trying to do is site computing as a hub of the department, so it’s clear to people that you have to have a PC if you want to store your photos, move them around, have a database of songs or whatever else you want to use it for. Computing is becoming more of a central part of the department, and relatively it’s got more space than it had previously.
We’ve got a brand new shop opening in Leicester in September, and another one opening next year. We’ve got a lot of other new branches in the pipeline as well. We will have doubled the overall size of our business in the UK by 2015.