Now John Lewis' online customers won't be knowingly undersold (kind of)

John Lewis has migrated its famous price promise to the internet. Though there is quite a significant caveat...

by Emma Haslett
Last Updated: 09 Oct 2013
John Lewis’ ‘never knowingly undersold’ pledge, which guarantees customers that it will match the price of competitors within an eight-mile radius of its stores or refund the difference, has, until now, not applied to the crazy world of the web. Now, though, the company has decided to extend its pledge online, as it looks to boost the digital size of the business. It’s a clear sign that John Lewis is taking the web increasingly seriously – and it does correct a possible anomaly. But since the NKU promise won't apply to pure-play online retailers, it might not have quite the same effect as it does in store...

It’s been 85 years since John Lewis adopted its famous pledge, which has proved a powerful marketing device. And it's making this latest move from a position of strength: it's had a much better recession than most high street retailers, even recording profits of £35.9m in the first half of this year (that’s a rise of almost 77%). But it's clearly lost some custom to the internet in recent years, where it's easier for punters to find the same product for less. And if wants to fulfil its pledge to double online sales to £1bn by 2014, something had to change. It hopes that this price promise, coupled with its reputation for reliability and friendly, knowledgeable staff, will help it to win out over online rivals.

But there is a big caveat: the price promise will only apply to other ‘bricks and clicks’ retailers (ie. those with bricks-and-mortar shops, as well as online offerings) because, says managing director Andy Street in an interview with the Telegraph, there is no way it could compete with a pure-play internet company whose overheads are so much lower. Nor, for instance, will it apply to Dixons - although it's basically the internet arm of Currys.digital, apparently that doesn't count because it ‘is not offering a high street presence with the same product and the same price’. We suppose that's technically true, but to customers it may seem like rather a technicality. 'Never knowingly undersold, except in some circumstances where it’s not really our fault’ doesn’t have quite the same ring to it, does it?

There’s no doubting John Lewis’ commitment to the pledge: according to Street, it has spent the last three years secretly adopting the promise, at a cost of £40m – and it’s likely to cost a further £8m a year. The theory is that JL will make up the difference through increased sales volumes - but since there's nothing to stop customers choosing their products via JL and then buying them from a cheaper internet retailer (as MT will admit to having done), this is unlikely to be a silver bullet.

It might have more success, however, with its new Waitrose Brand Price Match initiative, which is intended to ensure customers will pay no more for cupboard staples like washing powder and baked beans than they would at the likes of Tesco, Morrisons and Sainsbury’s. Waitrose has a reputation for being nice, but a bit posh and pricey - maybe this will help to dispel that?

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