(qlmbusinessnews.com Fri. 6th Sept, 2024) London, UK —
‘Never Knowingly Undersold' Returns: John Lewis’ Strategy to Win Back Customers
John Lewis is set to revive its iconic “never knowingly undersold” price pledge from Monday, just two years after the company decided to scrap it. The relaunched policy will, for the first time, extend to online sales, employing artificial intelligence (AI) to match prices against 25 of the UK's top retailers.
The decision comes as the department store chain seeks to win back customers after a challenging period that saw job cuts and several store closures. Although John Lewis returned to profit earlier this year, it is expected to continue downsizing its workforce in an effort to secure a more stable financial footing.
The move to reinstate the price pledge under the leadership of new managing director Peter Ruis represents a shift from the strategy of his predecessor, Pippa Wicks, who ended the policy in 2022. At the time, Wicks argued that the pledge no longer aligned with modern shopping habits, given the growing prevalence of online purchasing.
“When we removed the price promise, people assumed prices went up across the board, but that wasn't necessarily true,” explained Mr. Ruis. He added that the original pledge was no longer “fit for purpose,” with staff relying on outdated methods such as pencils, spreadsheets, and visits to competitor shops to track prices.
Mr. Ruis highlighted that the confusion surrounding the century-old pledge stemmed from its basis in a “pre-web world” where the majority of customers were local shoppers. However, he believes that recent advancements in computing and AI have made the pledge more practical to implement in today’s digital landscape.
The updated policy will now focus solely on branded products, with AI-powered software tracking prices from competitors including Marks & Spencer, House of Fraser, AO.com, and technology products on Amazon.
Retail analyst Catherine Shuttleworth remarked that the initial decision to drop the pledge amid a cost-of-living crisis had left many people puzzled. She described the return of the price promise as a win for customers, though its impact on the retailer’s bottom line remains uncertain. “The challenge will be how easy it is for shoppers to use,” she noted.
When questioned about the cost of reinstating the pledge, Mr. Ruis declined to provide figures but emphasised that reintroducing the policy had been a key priority since he rejoined John Lewis in January. This marks his third stint at the retailer, where he has previously served as a director and senior buyer, and follows his tenure as Chief Executive of Jigsaw and Anthropologie.
The revival of the “never knowingly undersold” pledge comes at a time when the UK high street is grappling with the combined impacts of the pandemic and the surge in online shopping. Recent data from PwC revealed a net loss of 5,000 stores last year. Meanwhile, competitors like Marks & Spencer have closed 110 shops as part of their restructuring efforts, and Debenhams has shifted to operating exclusively online after shuttering its last physical store in 2021.
This trend is becoming increasingly common, with other well-known brands like Topshop, Cath Kidston, and TM Lewin also transitioning from brick-and-mortar stores to online-only businesses. Topshop, now trading on the Asos website, is set to relaunch as a standalone site within six months following Asos's announcement of plans to sell 75% of its stake in Topshop for £135 million.
As John Lewis aims to re-establish itself on the high street, the success of its renewed price promise may play a crucial role in luring back customers amid the changing retail landscape.
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