14 reasons behind John Lewis’ 44% increase in online sales

It proved to be a fruitful Christmas for John Lewis, with like-for-like sales up 13% in the five weeks to December 29 compared to the same period in 2011.

And the news from its ecommerce store was even more impressive. Online sales grew almost three-times faster at 44.3% and now account for a quarter of all group sales.

In fact it reached more than £800m in annual sales through Johnlewis.com in December.

So how has John Lewis managed to pull off such a massive increase in online sales? Here’s a run down of some of the reasons behind its continued success…

1. PPC

Among the top selling gifts at Christmas were new gadgets such as e-readers and iPads.

A quick Google search shows that John Lewis has clearly spent a lot of money on PPC to ensure it secures traffic for ‘iPad’ and ‘e-reader’ search terms, and also for ‘iPod’ and ‘Smart TV’.

2. Well designed product pages

John Lewis’ product pages are by no means perfect, but they do tick several of the boxes for best practice.

For example, it has excellent product descriptions (details of the 64GB iPod Touch runs to 443 words), recommendations based on what other customers viewed, delivery costs, stock information and cross-selling of related items.

All these are excellent features that help customers to make an informed purchase decision.

On the down side though, the calls-to-action are quite small and the products I looked at only had one image, although there was a zoom function.

Furthermore, though there is the option to leave a product review very few customers have actually bothered, so John Lewis could do more to encourage people to leave reviews either by post-sales emails or by making it more prominent on the page.

3. Consistent site navigation

Not all traffic to ecommerce sites comes in through the homepage, much will arrive directly at product or category pages, so navigation should be consistent so that people can find their way around the site from wherever they happen to be. 

For most sites, this means a constant top navigation and search bar, as on John Lewis. 

4. Enclosed Checkout

By enclosing its checkout John Lewis has removed features such as navigation bars and search boxes that may distract the user from making a purchase.

The checkout screen is plain and simple, allowing the shopper to focus on the task in-hand.

 

5. Simple checkout process

There are six steps John Lewis’ checkout process, which could be trimmed down slightly, but even so there is very little form filling involved for either repeat or new customers, and it offers shortcuts such as a postcode lookup tool.

If you choose to create an account, the site saves your delivery and billing addresses so you need only enter your card details, meaning the checkout is completed in a couple of minutes.

That said, John Lewis should consider giving customers the option to store their card details so purchases could be made simply by using a password, similar to Amazon’s one-click payment method.

6. Free delivery on orders over £50

Expensive or hidden delivery costs are a common cause of basket abandonment, so it’s important for retailers to be upfront with their charges.

John Lewis details its various costs on every product page and offers free standard delivery within five working days if the items are worth more than £50, otherwise there is a £3 charge.

For next day or Saturday delivery the costs are quite steep at £6.95, but by offering a free option for more expensive orders and a free ‘click and collect’ service John Lewis is able to cater for most customer’s needs without charging them for delivery.

7. Guest registration

Forcing customers to create an account before checking out is another common cause of basket abandonment, but John Lewis successfully avoids any mention of registration until the very end of the checkout process.

8. Alternative payments

Not all consumers are happy to enter their credit card details online, so offering alternative payments methods can be a great way to capture additional sales.

John Lewis allows shoppers to pay using nine different methods, including all major credit cards, a John Lewis or Waitrose Account Card, or PayPal.

 

9. Click and collect

‘Click and collect’ services that allow shoppers to buy online but pick up the product in-store have proven to be a huge success for a number of retailers.

As highlighted in our report ‘How The Internet Can Save The High Street’, 80% of UK consumers have reserved a product online for in-store collection, while 20% do this at least once a month.

Argos’ ‘Check and Reserve’ service accounted for 29% of its £819m sales in Q1 2012, while Halfords introduced a ‘Click and Collect’ service three years ago and now 86% of all its online sales are for in-store collection.

John Lewis not only offers click and collect, but also allows customers to pick up their items from around 100 Waitrose stores – a service it promoted through a virtual QR code store in Brighton in November 2011.

After ordering online, customers can pick the item up after 2pm the following day from any John Lewis or participating Waitrose store, if the order is place before 7pm the previous day.

10. It was quick to embrace mobile commerce

John Lewis launched its first mobile site back in October 2010, gaining a big headstart on a number of its competitors.

While mobile sales are likely to be a small proportion of its overall online sales, it means that shoppers can easily research product information on-the-go, which helps to increase brand awareness and also encourages people to later make a purchase on the desktop site.

The mobile site also works hand-in-hand with the click and collect service, as it means customers can make impulse purchases and pick up the item at their convenience.

11. Free Wi-Fi in-store

We’ve investigated in some detail whether retailers should offer customers free Wi-Fi in-store, and overall the benefits for the customer experience outweigh any potential negatives.

John Lewis has offered customers mobile web access since the end of 2011, and last February head of online delivery and customer experience Sean O’Connor told us that it had been a big step forward in helping customers make an informed purchase decision.

They can quickly and easily access our mobile optimised website, or use our iPhone app. Customers are free to access the whole of the web, including competitor sites to test our price commitment, however it primarily enables us to extend our John Lewis online content and services into our physical shops in a way that is convenient for them.

12. Multichannel strategy

Many businesses are still struggling to implement an effective multichannel strategy, but as long ago as September 2010 we interviewed John Lewis’ head of online Jonathon Brown about the company’s multichannel approach to retail. 

He revealed that when the business opened a new brick-and-mortar store it led to an increase in online sales from that area, and that the company was targeting click and collect customers with vouchers and offers to help drive incremental sales in-store.

John Lewis’ multichannel strategy has now evolved to include mobile apps that have in-built barcode scanners and store locators, as well as free in-store Wi-Fi, which all helps to boost brand awareness and drive sales across all customer touchpoints.

13. It started its Christmas sale early

Data from Experian shows that shoppers began searching for sales early this year, so it was important that retailers matched this need by launching their sales before Boxing Day.

On Christmas Eve and Christmas Day one in every 125 searches conducted in the UK including the word ‘sale’ or ‘sales’. The top sales search term was ‘Next sale’, followed by ‘Debenhams sale’, ‘Marks and Spencer sale’ and ‘John Lewis sale’.

It could be that consumers were looking to buy items or just researching with an eye on heading to the shops on Boxing Day, but by having its sale live at 5pm on Christmas Eve John Lewis managed to grab a valuable headstart.

In fact, managing director Andy Street revealed that Christmas Eve was the retailer’s single busiest online shopping day ever.

14. Competitors falling by the wayside

John Lewis has benefitted this year from the problems suffered by other retailers, most notably Comet’s bankruptcy.

Technology sales at the retailer increased by just over 30% and, as we’ve seen, it has a PPC campaign that targets must-have gadgets, so some of the company’s success has probably come from increasing its market share versus its rivals.

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14 reasons behind John Lewis’ 44% increase in online sales

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