John Lewis boss Andy Street reveals the retailer is now spending almost two-fifths (37%) of its capital expenditure on IT, up from 15% in 2008.
The swing in investment comes as it increasingly focuses on its omnichannel operation. In order to support its infrastructure, John Lewis is also building a new distribution centre at Magna Park to bring its total investment at the site to £200m.
Speaking at the British Retail Consortium’s Omnichannel conference, Street said: “In the early years we lost a lot of money online but with our ownership model that was okay and we held our nerve in the tough times to deliver the business we now have.”
Up to a third of John Lewis’ trade came from online retail in its last financial year, according to Street.
Online growth is being driven by the success of its click-and-collect service. Over half of John Lewis’ online sales over Christmas were delivered through click and collect.
Street also warned that in an ominichannel world, customers are “generally becoming a less satisfied lot”.
He revealed the retailer is struggling to sustain net promoter scores in the face of an increasingly difficult-to-please customer.
Street said John Lewis is focusing on the brand being “king” in an omnichannel world and added “we now talk relentlessly about the brand” and cited the Christmas ad as a manifestation of this strategy.
John Lewis will open “many more” stores says Street, who said the retailer was still seeking to increase its current portfolio of 42 stores to 60 stores because he believes that is the “perfect” number for the company.