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Good experiences for sale, along with goods, in John Lewis revamp | Business

John Lewis will this week unveil a radical new-look department store that has replaced selling space with “experience playgrounds” where shoppers can hone barista or pasta-making skills or hang out in a rooftop orchard and farm shop.

If successful, the revamped Southampton shop – which opens on Tuesday – could provide a prototype for other John Lewis stores. It is the employee-owned retailer’s latest crack at reinventing the department store amid a sea change in shopping habits that has forced major rivals Debenhams and House of Fraser into rescue deals.

Peter Cross, John Lewis’s customer experience director, said: “Our new concept shop is an example of how we’re reinventing the department store to make us stand out from the competition. Our goal is to offer customers unrivalled access to expertise and impartial advice in a way that is uplifting and inspiring.”

Department stores have found themselves in the line of fire as fewer Britons opt to spend their leisure time shopping. To stay relevant, John Lewis has been getting into the “shoppertainment” business – selling “experiences” as well as stuff – as it fights for a slice of discretionary consumer spending that increasingly competes with mini-breaks and nights out.

This kind of retail theatre was pioneered by famous London department stores such as Selfridges, although its efforts reached parody levels two years ago when it ran potato-peeling workshops to help stressed-out consumers “reconnect” with themselves.

What’s the problem?

Physical retailers have been hit by a combination of changing habits, unseasonably warm weather, rising costs and broader economic problems. In 2018 Toys R Us, Maplin and Poundworld disappeared as a result.

In terms of habits, shoppers are switching to buying online. The likes of Amazon have an unfair advantage because they have a lower business rate bill, which holds down costs and enables online retailers to woo shoppers with low prices. Business rates are taxes, based on the value of commercial property, that are imposed on traditional retailers with physical stores. 

At the same time, there is a move away from buying ‘stuff’ as more people live in smaller homes and rent rather than buy. Those pressures have come just as rising labour and product costs, partly fuelled by Brexit, have coincided with economic and political uncertainty that has dampened consumer confidence.

What help do retailers need?

Retailers with a high-street presence want the government to change business rates. They also want more political certainty as the potential for a no deal Brexit means some are not only incurring additional costs for stockpiling goods but are unsure about the impact of tariffs after October 2019. Retailers also want more investment in town centres to help them adapt to changing trends, as well as a cut to high parking charges which they say put off shoppers.

What is the government doing?

In the October 2018 budget the government announced some relief on business rates for independent shopkeepers. It has also set up a £675m ‘future high streets’ fund under which local councils can bid for up to £25m towards regeneration projects such as refurbishing local historic buildings and improving transport links. The fund will also pay for the creation of a high street taskforce to provide expertise and hands-on support to local areas.

What is the outlook in 2019?

Some retailers could go under. Weakened by a difficult Christmas – which accounts for the entire annual profits of many retailers, and with further Brexit wobbles to come – retailers are facing a tough 2019. Another rise in the national minimum wage in April and the falling value of the pound against the dollar, which is used to buy goods in the far east, have also added to costs and hit profits.

To that end, John Lewis suggests a Southampton itinerary that starts with a visit to the upmarket rooftop farm shop, followed by a “15-minute fashion fix and learn[ing] to bake bread in the cookery school”.

The Southampton store is the first to incorporate one of the supermarket’s cookery schools, where courses range from making Japanese street food to “ceviche and margaritas” and cost from £10 to £110.

To heighten the revamped store’s appeal to foodies, a farm shop and cafe experience courtesy of the Partnership-owned Leckford Estate has been built on the roof. The 1,600-hectare farm near Stockbridge in Hampshire was the home of John Spedan Lewis, who signed away his ownership rights to create the partnership.

It said the Leckford branded shop would stock a “carefully curated assortment of beautiful lifestyle products and fresh produce”. The garden is filled with planted apple trees.

The department store chain’s parent group, the John Lewis Partnership, said last month it was merging its management team with Waitrose in a bid to cut costs and boost sales by getting both brands to collaborate more.

This year’s festive TV commercial, which features an excitable baby dragon called Edgar, is its first joint ad with Waitrose.

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John Lewis has been steadily introducing more services and experiences since Paula Nickolds took over as managing director in 2016 (a role that will disappear next year when she becomes the group’s brand director under the new structure).

Her approach has talked about stores becoming “more than a route to selling things” if they are to stay relevant, with staff at the Oxford branch store given acting lessons to improve service levels ahead of its 2017 opening.

The overhaul of the 29,000 sq metre (310,000 sq ft) John Lewis in Southampton cost £3m and involved reallocating lucrative selling space to seven “experience playgrounds” focused on areas such as cookery, fashion, home technology and interior design.

A team of retail experts including chefs, gardeners, interior designers and personal stylists will give talks and courses as part of a mixture of free and paid-for events.

The decision to combine the management teams of both chains is part of a major reorganisation designed to save £100m. It follows the group’s first ever half-year loss and a shrinking staff bonus, which at 3% of salary this year was its lowest level in 66 years. The changes come ahead of the arrival of Sharon White, currently chief executive of Ofcom, as group chairman in early 2020.

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