John Lewis pumps millions into Web unit

Department store hopes to attract younger, trendier clientele with expanded online services

In a move reminiscent of the go-go days of e-commerce, department store John Lewis Partnership has allocated £30m-£40m for a new Internet and catalogue business, the company has said.

The move runs counter to conventional wisdom running through the retail industry. Some retailers are trying to rein in e-commerce expenditures until a larger percentage of shoppers start to buy online.

But John Lewis executives feel the push into Web and catalogue sales – and possibly into the introduction of shopping services via mobile phones and interactive TV in future years – will attract a new, younger clientele.

“Selling via the Net marks John Lewis’s introduction into direct selling, something the partnership will be developing further in the near future,” said Murray Hennessy, managing director of John Lewis Direct, the company’s new business unit.

As part of the initiative, John Lewis Direct launched a new web site on Monday, www.johnlewis.com, which will carry over 5,000 products, predominantly from its home and giftware categories.

The big online push is part of a strategy that developed last February when John Lewis purchased the UK assets of ailing online retailer Buy.com for £2.8m.

The acquisition has enabled John Lewis greatly to expand the product offerings and order fulfilment for its e-commerce operation, expanding from a team of four to 88. Hennessy said the company intends to launch its first catalogue later this month.

The company said it would be investing £30m-£40m over the next four years to bring the site to profitability. The store chain will work with Britain’s iForce to provide inventory management and order fulfilment and with ClientLogic for customer service enquiries.
ZDNet