John Lewis showed off two new all-singing all-dancing distribution centres at its 2.4m sq ft Magna Park campus earlier this month – the results of a £150m investment and a decade of planning.
John Lewis is spending big on Magna Park in Milton Keynes to future proof its supply chain and meet its self-imposed ambition of moving half its sales online by 2020.
Taking Drapers on a tour of the campus, John Lewis managing director Andy Street is proud of what the team has achieved. He argues that, although other retailers might boast of spending similar amounts on their distribution – River Island’s facility, for example, is next door to Magna Park – he is confident John Lewis has the biggest, the best and the most customer-centric facility in Europe.
It is certainly winning in the size stakes. The Magna Park campus is more than twice the size of Amazon’s largest UK distribution centre, in Dunfermline, Fife, which weighs in at more than 1m sq ft.
The new Magna Park 2 and 3 centres will work alongside the existing £100m Magna Park 1. Magna Park 2, a hanging-garment distribution centre, will help John Lewis boost its fashion delivery proposition by allowing the retailer to combine hanging fashion orders with flat items such as shirts and non-fashion iPads. The retailer estimates the changes will take 850,000 parcels off the road. This is also good news for customers, who will receive just one package, even if they have ordered across different departments, and good news for John Lewis, which saves money.
The 638,000 sq ft Magna Park 3 fulfils larger orders of electricals, bedding, furniture and leisure equipment, and houses a technical training centre for partners.
“It’s got to the point where it doesn’t matter how customers are buying,” Street says. “The whole premise of Magna Park is that, when you walk around, no one is saying ‘this has been designed for online, and this has been designed for stores’. It’s been designed for both, together.
”The whole idea is that the customer is using channels interchangeably. Our discussion around the board table went: ’We can’t predict how the split between store and online will go, we have to make it irrelevant.’”
Operations manager Dino Rocos adds: “We took what has turned out to be a really critical business decision, to create one supply chain that supported customers irrespective of how they shopped with us. It was a very forward-thinking decision for John Lewis and it’s a decision some retailers are still struggling with.”
Rocos is clear: there will be no horror stories of John Lewis partners – what it calls its staff – walking mile after mile looking for stock at Magna Park. A big chunk of the investment has gone on to automation and the picking system, leaving staff to oversee the process rather than tramping through the aisles. Throughout Drapers’ visit, ghostly shirts and dresses fly through the air on automated equipment. Although the distribution centre is not yet working at full capacity, the scale of the operation is already impressive.
Magna Park is also designed to help John Lewis manage more acute peaks in the lead-up to Black Friday and the Christmas period.
“Four years ago, Black Friday didn’t really register,” Rocos says. “But with our ‘never knowingly undersold’ policy, we have no option, nor indeed would our customers expect us to sidestep the opportunity to offer competitive prices.”
A bubbly Street is confident John Lewis will deliver over the Christmas period, despite what he admits was a difficult summer for fashion sales – the retailer’s worst-performing category.
“We’re feeling extremely confident. We’ve had seven years beating the market at Christmas, [and we’re] fully expecting this to be the eighth. There are three reasons for that: there’s been lots of innovation around product in the last few months, and we are incredibly sure of this facility’s ability to deliver. And finally, almost whatever happens with the economy, there is always a desire to celebrate at Christmas.”
Magna Park by massive numbers
- John Lewis’s total investment at the Magna Park campus stands at £250m, an £150m investment in Magna Park 2 and 3, and £100m at Magna Park 1
- Hanging garment centre Magna Park 2 could accommodate 9,198 double-decker buses
- Magna Park 2 is capable of storing 1.6 million garments at any time and processing 5,000 packages an hour
- 235,000 John Lewis products are stored at the Magna Park campus
- It is estimated that Magna Park 2 will save drivers 190,000 miles per year
- There are 46 million potential customers within a 4.5-hour drive of Magna Park