Last week John Lewis announced plans to start charging their customers for lower value click-and-collect orders – by placing an additional £2 charge on anything under £30 – asserting that making this available as a free service is not sustainable. The move has prompted some industry commentators to speculate as to whether other retail leaders will follow suit – as the scramble for multi-channel and technology-enabled convenience shopping becomes more prevalent in the marketplace and retailers begin to discover which aspects of the schemes are both practical and profitable.
Speaking to Retail Week magazine, John Lewis boss Andy Street, defended the controversial move – stating that he is confident that customers will understand:
“We want to take a leadership position, this market has got to be sustainable. It’s illogical this can be produced at no cost. We think our customers will understand this is reasonable.
“Customers understand John Lewis has been around for 150 years and we’ll be around for another 150 years. They understand we’re a good corporate citizen and can’t give everything away for free. There is a huge logistical operation behind this system and, quite frankly, it’s unsustainable.”
Street implies that he thinks that other retailers will also add charges for smaller purchases – as click-and-collect schemes become established and businesses discover what is or isn’t workable within this previously unchartered territory.
It is a volatile market and John Lewis appear to be covering their bases with this move, as Street asserts: ‘it is time to take a clear position in the market.’
As only 18% of click-and-collect orders at John Lewis are below £30, Street is not worried about the new charge. He considers that an overall majority of purchases would not be affected – but that with their current logistics infrastructure, the charge for smaller items is unavoidable. However, Street also describes their logistics operations are ‘better than most’ and demonstrates careful forward-planning as he anticipates that Black Friday sales will be ‘20% bigger’ this year – coupled with another sales boost at Christmas as they continue to establish their market as a Christmas gift brand following their super-successful TV advertising strategy.
So, what next for click-and-collect? Watch this space to see how other retailers respond to this move – market leading or self-defeating? We’ll be sure to let you know!