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Changing Business Models Luke Kingsnorth John Lewis

Changing Business Models Luke Kingsnorth John Lewis. 13 th May 2008. Where did it all start?. £6.8bn sales (6.3% up YOY) £411m profit (15.7% up YOY). The birth of Johnlewis.com…. 1999 – Launch of Johnlewisnow.com (limited selection, 20 orders per day)

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Changing Business Models Luke Kingsnorth John Lewis

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  1. Changing Business ModelsLuke KingsnorthJohn Lewis 13th May 2008

  2. Where did it all start? • £6.8bn sales (6.3% up YOY) • £411m profit (15.7% up YOY)

  3. The birth of Johnlewis.com… • 1999 – Launch of Johnlewisnow.com (limited selection, 20 orders per day) • 2001 - launch of johnlewis.com, purchase of Buy.com for £2.8m • Promise of £30m investment with a view to 5,000 products online in 5 years • First Christmas 1,000 orders on busiest day, 800,000 page impressions

  4. Johnlewis.com growing up… • Sales of £268million, an increase of 44.6% on the previous year • 24,000 orders on busiest day & 3,000,000 unique visitors in peak week 2007 • Growth in online sales represented 56% of John Lewis’ growth • Full line department store assortment – 35,000 SKUs and growing • Complete in-house operation – 180 Partners plus outsourced contact centre and fulfilment operations

  5. Drivers for change • Changing customer behaviour & expectations. The role the internet plays in purchase in store and vice-versa • The site allows a national footprint that is beyond what we could offer through stores. • 24/7 shopping mentality • Multi-channel customers spend more

  6. How is John Lewis changing? • Johnlewis.com was kept as a separate SBU to allow for rapid change, now it’s time for it to be more integrated (service, operations, stock & marketing) • Very real awareness of the need to be ‘multi-channel’ and not just ‘multi-distribution’ • The need for one view of customer and as consistent service as possible regardless of channel. Bringing the Partner difference to Johnlewis.com • Real desire to embrace the idea and implications of integrated marketing plans

  7. What does integrated marketing look like at JL? Start with consistent objectives Set clear, reportable KPIs Pick the right media Execute with consistency Review as one LEARN

  8. Search by numbers • Search marketing accounts for 50% of all traffic to Johnlewis.com • Paid vs Natural search is 50/50 • PPC spend has grown by 300% from 06 to 08 and is 50% up from 07 to 08 • It’s a key area of marketing media with TV, Catalogues, Press and online • Spend will continue to increase in line with online growth and because of inflationary pressures • Managed by account team at Steak Media & John Lewis PPC Manager. • Board level interest in the plans for search and potential future impacts.

  9. Search integration Brand • Brand bidding requires a focus on cost control and messaging • Full product listing allows us to tackle the ‘long-tail’ of search. This requires a lot of work due to size and churn of product offering • Linking with ABTL advertising is key for consistency and brand building. Vital to have close links between media buying & search agency • Links with seasonal events through PPC allow us to target ‘inspiration’ searches Product Advertising Inspiration

  10. Any questions?

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