John Lewis, Zalando and House of Fraser examine what the future of retailing means to them at #IRC14

15th Oct 2014

Mark Lewis, online director of John Lewis, takes the audience at #IRC14 through the retailer's omni-channel outlook. Photo credit: My-Retail Media

They may be giants in their own respective fields, but John Lewis, House of Fraser and Zalando all agreed on one thing yesterday: no one can be sure what the future of retailing holds, even for the big guns.

Back in 2008, you’d be hard-pushed to find some common ground between House of Fraser and Zalando. The former, a historic British retailer with plenty of hold on the high street, had just launched its website, while the latter was only just being conceived as a business idea in Germany. But it was a sign of how quickly the industry has been forced to evolve to consumer tastes, that both retailers shared a stage for yesterday’s opening keynote speech at the Internet Retailing Conference 2014.

With a focus on ‘re-foundationing’ as its theme, IRC’s key speakers once again opened up to the sector on their goals, achievements, fears and nightmares of operating in such a fast-moving world, and how they’d begun to design their online innovations around the ideas of experimentation and failing fast.

John Lewis has been in the online game a comparatively long time (at least, as House of Fraser’s Andy Harding later pointed out, a lot longer than his own company), investing in e-commerce operations since acquiring buy.com back in 2001. Mark Lewis, online director at the chain, said its growth as an omni-channel retailer had been down to encouraging experimentation, such as its work with JLABs, and its focus on aligning its founding core principles of trust with evolving for the future.

Online is, without a shadow of a doubt, huge for John Lewis. With just 43 stores across the UK, the retailer expects e-commerce to make up a third of its sales by 2014 – 2015, and Click and Collect orders currently account for half of these. Despite this growth, of the stores John Lewis is opening, they’re a considered expansion- now complimenting the overall ‘omni-channel’ outlook the business embraces. As Lewis spoke of the changes his company has been putting into action, a few miles away at St Pancras, John Lewis launched its first station location, equipped with its Click and Collect facilities allowing customers to ‘click and commute’ during journeys in and out of the capital.

What precisely re-foundationing means to the retailer, Lewis remained casually vague about- teasing the audience with the fact that its Christmas advert is now ‘under lock and key’, without giving much away about what the coming 12 months hold for the company. Regardless, it is looking pretty good for 150 years old and it’s clear the retailer is beginning to recognise where its strengths lie in the years to come.

Sandwiched between two high street heavy-weights, it would have been easy for Zalando to look a little out of its depth- but as Europe’s biggest online retailer, these days, that’s becoming a hard task. Jérôme Cochet, senior vice president of sales, explained to the audience that Zalando is now in the process of “cleaning up after the party” after making “a mess” in its first few years of experimenting and growth. Having gone from one market in 2008 to 15 in 2014, Zalando is well versed in what gives its business the edge over its rivals in the highly competitive e-commerce game, and argued that making the local consumer feel “at home” despite being on a multi-national website, was now a main priority for the business. With 13.7 million active customers and EUR 2 billion in revenue after just six years of trading, Zalando is now honing in on the aspects of retail John Lewis and Harvey Nichols are still having to re-define: what its brand stands for, what its positioning is and how it will deal with the future. Zalando may not have a heritage to speak of yet, but being brand new also comes with its own set of positives: it’s far easier to change.

And change is definitely something House of Fraser has had no shortage of in the past decade. While executive director of multi-channel Andy Harding had some semantic bones to pick with Lewis over the use of omni-channel or multi-channel, he was quick to agree that the last few years had been spent bringing their online operations into the fold, in order to create a seamless transition for customers between the House of Fraser they see on the high street, on their iPhones, or on their tablets. Although the going’s been tough for the majority of bricks-and-mortar traders, House of Fraser’s (comparatively) recent expansion and investment in its e-commerce offer has seen it go from strength to award-winning strength in the past few years. Harding explained that this was down to a ‘customer-centric’ focus, with the retailer using its delivery options as a key battleground to differentiate itself from the competition- who have, surprisingly enough- become John Lewis and Zalando.

As the UK’s economy continues to improve and retailers are no-longer fighting for survival, it’s become clear just how much the rise of internet retailing has levelled the playing field. John Lewis and House of Fraser’s hold on the high street stood them in good stead for the twentieth century, but evolving to encapsulate both its stores and online operations brings with it an entirely new set of problems. Remaining true to founding principles whilst evolving at the same rate as its tech-savvy consumers is now the end game. On the other hand, a retailer like Zalando that would traditionally have had to spend years researching and consolidating its growth in order to become a key competitor to a giant like John Lewis or House of Fraser is now able to steam ahead. Without the weight of high street stores, Zalando can change its branding and positioning with one new advertising campaign. Trust, reliability and focus on the consumer experience remain key priorities, but what is also becoming apparent is just how much major players like Zalando and House of Fraser can learn from each other.

Ava Szajna

My-Retail Media

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