John Lewis to retire ‘Never Knowingly Undersold’ price promise this summer

John Lewis will retire its ‘Never Knowingly Undersold’ promise this summer, deciding instead to pump £500m into a new price pledge aimed at offering “quality at great value prices” amid the cost of living crisis.

Essentially, Never Knowingly Undersold is being axed because customers “have changed how they shop”, says John Lewis. The retailer claims the price promise is “no longer enough to assure trust”, because it applies to “fewer and fewer sales” as shopping moves increasingly online and isn’t applicable to online-only retailers.

John Lewis explains retiring Never Knowingly Undersold will enable the business to “proactively lead on great value” rather than reacting to other retailers’ price changes. The idea is shoppers will therefore benefit from “great prices” every day without having to shop around.

The price pledge was originally put under strategic review in March 2020. At the time John Lewis chairman Sharon White identified a need to “modernise” Never Knowingly Undersold, which was introduced in 1925, in favour of making value a key part of the brand.

The proposed £500m investment in value is 25% higher than the amount John Lewis spent on keeping prices affordable last year and will be used for prices and promotions across all categories of products sold.With the new price strategy, the department store chain says it wants customers to be able to access quality and value whether they shop in store or online.

Never Knowingly Undersold has been a cherished sign of trust for John Lewis for a century, but it doesn’t fit with how customers shop today.

Pippa Wicks, John Lewis

The business will continue to monitor other retailers’ prices, however, especially for key products such as mattresses, TVs and toys.

“Customers are tightening their belts and we’re responding so John Lewis is more affordable for every customer, every day whether shopping in-store or online,” says executive director of John Lewis, Pippa Wicks.

“Never Knowingly Undersold has been a cherished sign of trust for John Lewis for a century, but it doesn’t fit with how customers shop today as more purchases are made online. Our new £500m investment means all our customers can trust they’re getting the quality, style and service they expect from John Lewis at great value prices.”

Reflecting on the news, branding expert and Passionbrand founder Helen Edwards believes the retailer ultimately had no option but to retire Never Knowingly Undersold.

‘We can’t rest on our laurels’: John Lewis’s top marketer on transforming the business

“It’s a slogan but it’s also a ‘claim’, and if they can’t stand by the claim, they can’t use the slogan. That said, I think replacing it will be challenging – will they ever achieve ‘fame’ with a slogan again?” she questions.

“I also think that internally it could be difficult. I suspect it worked very powerfully to engender and unite around a sense of pride and decency. A bit like Ritz-Carlton’s ‘We are ladies and gentlemen serving ladies and gentleman’. Internally it will now feel ‘So we are just another shop then’.”

It will be interesting to see where John Lewis goes next, says Edwards, who argues a lesser version of the price pledge would feel like a let down. She questions whether the retailer will become more declarative about its purpose, or potentially land something around the experience.

“The new strategy seems to be banging the drum for fair prices and value, and the Anyday range. I’m not sure I would lead with value where they can’t win. Why not emphasise service, experience, or quality with price and value as a secondary reassurance?” Edwards suggests.

Focus switches to Anyday

With the retirement of Never Knowingly Undersold, John Lewis is hoping to build on the “success” of its Anyday range.

Introduced in April 2021 and pitched as the retailer’s “most affordable” own brand range, Anyday launched with 2,400 products designed to undercut existing collections and attract a broader range of price conscious consumers. Anyday prices are, on average, 20% lower than John Lewis’s other own brand ranges.

The brand has notched up £125m in sales so far and is the most successful launch in the partnership’s history. More than 2 million customers bought an Anyday product in the space of nine months, 25% of whom were new to John Lewis.

Describing the own brand range as a “critical element” in its £800m turnaround strategy, John Lewis launched its first multichannel advertising campaign for Anyday in May 2021.

In a first for the retailer, the TV ad called out the price of products in the range, including a £2 mug, a £20 mirror and a £35 highchair, in a bid to appeal to a broader group of shoppers looking for competitively priced everyday products.

John Lewis eyes price conscious shoppers with value own brand launch

According to John Lewis, 800 Anyday products are sold every hour across fashion, homeware, technology and nursery. The plan is to extend the brand into swimwear and kidswear, as well as expanding Anyday’s outdoor furniture range for spring/summer.

Aside from pushing its own brand, John Lewis says it plans to introduce more “great value” brands such as Mango, Nobody’s Child, Julian Bowen furniture, Blanc prints and beauty brand, The Ordinary.

The retailer is talking up the breadth of its portfolio, spanning different price points for every budget, as well as promising consumers “better and more personalised offers and rewards” via the My John Lewis loyalty scheme.

The John Lewis Partnership as a whole managed to cut its losses over the first six months of 2021 to £29m, as it kicked off its five-year turnaround strategy. This figure is an improvement on the £635m loss the business posted for the same period last year, underpinned by a 6% increase in sales.

It’s a slogan but it’s also a ‘claim’ and if they can’t stand by the claim, they can’t use the slogan.

Helen Edwards

For John Lewis specifically, like-for-like sales grew by 13% during the first half of 2021 compared to the same period the year prior. This figure also represents an 11% increase on the 2019/2020 financial year. Almost 75% of sales during the first half were online, up on pre-pandemic levels when ecommerce accounted for 40% of sales.

Speaking at the time, White said she was “encouraged by the early progress” of the turnaround and positive momentum across both the John Lewis and Waitrose brands.

By 2030, John Lewis wants 40% of its profits to come from areas outside retail, focusing on financial services, housing and outdoor living.

The business is already making moves to diversify beyond pure retail with its first foray into investment products. Announced in August, the department store chain plans to spend £100m over the next five years to quadruple its financial services business.

The news came a month after John Lewis revealed plans to build 10,000 rental homes over the next decade in former department store car parks, above Waitrose supermarkets and next to distribution centres.

Source Article