John Lewis has long been seen as an industry bellwether, leading the sector on everything from multichannel to service expectations.
The retailer has gone from strength to strength in recent years, and has managed to maintain a strong identity and appeal in a difficult department store market.
So its decision to cut 400 roles, revealed just weeks after sister company Waitrose unveiled plans to slash hundreds of jobs, is less reflective of troubles at the business and more an indication of it taking a long-term view on how shopping is changing.
“As we go forward, we will need for physical space to be much more engaging. And we will need workforces able to do that”
Helen Dickinson, BRC
Tesco said this change was less about cost-cutting and more part of a drive to “help improve service to customers” by “aiming to have more colleagues on the shop floor, more often”.
The changes at John Lewis will affect its home estimation and fitting services and catering teams, with 773 staff entering a period of consultation over their positions, but 386 new jobs will be created under plans to create “a more efficient way of operating”.
Its home estimation and fitting services will move to a regional model, while in-store catering will be centralised, using a standard menu which requires less manpower on-site.
The mechanics of both restructures are not important here. What is key is the wider themes that they highlight.
“These proposals will allow us to modernise our business as it adapts to the changing needs of our customers and the role that shops play in their lives,” operations director Dino Rocos said last week, echoing Tesco’s sentiment this morning.
A more flexible approach
Experts agree that retailers will have fewer staff overall in the future, with the BRC estimating that there will be up to 900,000 fewer by 2025.
This means retailers must ensure that the staff they do have are best utilised in front-of-house roles, and that back-office work is minimised via smarter processes, enabled by technology.
“They do it well at Christmas and at weekends, but when it comes to the time of the day or the day of the week, retailers are less able to respond flexibly”
Anita Balchandani, OC&C
Some experts believe even the basics of how many staff to have on the shop floor at any one time needs to be addressed. Tesco is taking steps to perfect its stance on this.
Anita Balchandani, partner at strategy consultant OC&C, says there is more that retailers can do to align customer demand and service levels.
“They do it well at Christmas and at weekends, but when it comes to the time of the day or the day of the week, retailers are less able to respond flexibly,” she says.
An experiential workforce
The role of shops remains crucial. As footfall drops and transactions shift online, retailers pursue ever more experiential environments in an effort to maximise the value of bricks and mortar and distinguish themselves in the customer’s mind.
John Lewis is one retailer leading the pack here with its new stores, such as its recent opening in Leeds, packing an experiential punch. What it now needs to do is create a workforce capable of developing it.
“As we go forward, we will need for physical space to be much more engaging,” says BRC chief executive Helen Dickinson. “And we will need workforces able to do that.”
“It’s clear that so much of many brands’ offer is about human customer service. Ultimately, retailers are going to need to make the customer journey more efficient but also provide expert-led brand ambassadors”
Josh McBain, Future Foundation
Front-of-house staff need to be brand ambassadors, says Future Foundation head of innovation Josh McBain.
“It’s clear that so much of many brands’ offer is about human customer service. Ultimately, retailers are going to need to make the customer journey more efficient but also provide expert-led brand ambassadors,” he says.
Balchandani believes that some high street players could take inspiration from the luxury sector.
“There could be a better use of downtime,” she says. “You see a lot of clientelling in luxury, using time away from the shop floor to drive sales by messaging on platforms like WhatsApp and ringing customers to tell them about stock.”
The changing customer journey
Outside stores, all retailers will need to contend with a changing customer journey.
John Lewis may be a market leader when it comes to multichannel, but it will need to continue innovating to keep up to speed.
“We picture the customer journey broadly shortening in the sense that it’s more on demand,” says McBain. “But as consumers continue to compare prices and we witness the rise of things like shoppable wish lists on Instagram, some product journeys will get longer.”
He says retailers will need to adopt technologies that make it easier for customers to purchase.
“Retailers in Asia have been using chatbots and instant messaging via WeChat for a long time,” he says. “But UK retailers have been slower to catch on. We should see more AI-style bots as we go on.”
The trick for retailers will be to tread the right line between giving customers a seamless, technology-enabled journey and preserving the human face of in-store customer experience.
As costs rise and top-line growth remains sluggish, it will be a challenging but necessary balancing act to pull off.