As Paula Nickolds prepares to take the reins as the first female boss of John Lewis, Retail Week takes a look at her to-do list.

Paula Nickolds Index crop

Paula Nickolds

Drive in-store innovation

Having started her retail career on the John Lewis shop floor in the Oxford Street haberdashery department, Nickolds and shops go hand in hand.

In her present role as commercial director Nickolds has been responsible for driving innovation in John Lewis’s proposition and revamping stores to make them more relevant and attractive to the modern consumer.

Its latest bricks-and-mortar branch in Leeds is testament to those efforts – an experiential store that allows shoppers to take part in activities from grinding their own coffee to getting a pedicure at the &Beauty spa.

But despite the changes Nickolds has spearheaded, she will be well aware that there is more work to do.

The development of its store network remains a critical part of John Lewis’s strategy – particularly with click-and-collect now accounting for over half of its online orders.

“Nickolds will be keen to improve on John Lewis’s sales densities”

Nevertheless Nickolds will be keen to improve on John Lewis’s sales densities which, after falling in recent years to £470 per sq ft, are one of the few blots on the retailer’s copy book.

With international expansion also high on the department store chain’s agenda, Nickolds will have further decisions to make on where to expand and how to tailor the John Lewis offer to cater for international consumers.

Maintain momentum

Stepping into the large shoes of Street and attempting to maintain the momentum he has created at the retailer will be a challenge for Nickolds in itself.

The Partnership’s chairman Sir Charlie Mayfield said as much himself when he revealed Street’s departure, stating: “Andy has led John Lewis brilliantly and leaves the brand with great momentum for the future.”

“Street repositioned the business not just as a multichannel retailer, but a multichannel leader in a fiercely competitive sector.”

Under Street’s stewardship, John Lewis’s gross sales climbed more than 50% to break through the £4bn barrier, while it opened almost 20 new stores, including one in Leeds last week.

But perhaps more importantly Street repositioned the business not just as a multichannel retailer, but a multichannel leader in a fiercely competitive sector.

Online sales have blossomed and now account for more than £1bn every year – or around 35% of the chain’s total sales.

Street also successfully broadened John Lewis’s appeal, continuing to lead the way in areas such as electricals and homewares, and improved its offer in categories such as fashion, where it was not as strong prior to his reign.

And having continued to drive the ’Never knowingly undersold’ mantra – along with service and quality – Street’s John Lewis left traditional rivals such as Marks & Spencer, Debenhams and House of Fraser in the shade on almost all fronts.

From that perspective, the trio may be breathing a sigh of relief that Street has gone. But Nickolds will be determined to pick up the baton and run with it.

Supply chain and IT

John Lewis has a history of investing during difficult times and at present, as some retailers are cutting back on investment, things are no different.

The retailer is allocating a greater proportion of its investment to IT and supply-chain innovations which, during the first six months of its current year, represented 55% of total capital investment, up from 48% the previous year.

Just last month John Lewis opened its new state-of-the-art Magna Park distribution facility. The £150m investment forms part of a £500m online shopping improvement programme announced last December.

“The retailer’s upcoming tech hub in Birmingham will roll out retail technology for shoppers and staff to test in real-time.”

Alongside that, the retailer is running Programme Q, under which it will have invested £369m in its supply chain by 2020 as it prepares for further online sales growth.

Meanwhile, John Lewis’s IT team is increasingly focused on the department store group’s bricks-and-mortar proposition. The retailer’s upcoming tech hub in Birmingham will roll out retail technology for shoppers and staff to test in real-time.

Nickolds will need to ensure that the initiative is smooth and lessons are applied across John Lewis’s estate.

She’ll be working closely with Paul Coby, who was promoted to lead IT across the John Lewis Partnership earlier this year.

Her priority will be striking the balance between ensuring that tech operations run smoothly while continuing to drive innovation such as visual search technology.

John Lewis Leeds  Butterfly display

John Lewis Leeds Butterfly display

Driving efficiency

As John Lewis increases spending during difficult market conditions, Nickolds will have to drive efficiencies elsewhere.

That will mean making some tough decisions.

One of the other frontrunners for the job was Andrew Murphy, who took on the role of group productivity director last September.

It was a newly created post and is indicative of the fact that, despite having left the downturn behind, assets have to really be sweated to ensure financial success.

That indication was followed by a pretty clear signal from chairman Charlie Mayfield at the partnership’s interim results last month.

“We will have fewer partners over time as compared to today,” Mayfield said. “Our ownership structure makes it especially important that we manage the partnership carefully and thoughtfully for the long-term. We are committed to creating better jobs, for better performing partners, on better pay.”

While this development mirrors current thinking elsewhere in retail about the future of the workforce, presiding over a reduction in jobs, gradual as it may be, could be a challenge both internally and externally.

That may be especially true for a retailer such as John Lewis that derives part of its brand power from its reputation as a great employer.