John Lewis’s decision to charge a flat rate of £2 for click-and-collect services on orders under £30 from the end of July “could be an industry game changer”, according to some experts.
Following today’s announcement, many observers said other retailers were likely to follow suit. However, some of the department store group’s closest rivals, House of Fraser and Marks & Spencer, quickly stated their intention to continue offering free click-and-collect.
John Lewis managing director Andy Street said the decision was made because current delivery practices are “unsustainable”.
In a direct reference to Amazon, which also revealed it was going to introduce one-hour deliveries in central London, Street said customers would appreciate that good businesses like John Lewis, which offer fair prices, looked after their staff, operated attractive stores and “dare I say it, pay their taxes”, could not afford to provide permanent free deliveries and returns.
The chief operating officer of one high street womenswear retailer said: “It is an interesting move and John Lewis is big enough for this to be an industry game changer.
“It is a conversation that will have been going on in boardrooms up and down the country and John Lewis is bold enough to have done it.”
Maureen Hinton, group research director at retail consultancy Conlumino, said: “Our research shows delivery charges tend to put people off but I don’t think £2 will be the straw that breaks the camel’s back. It could also encourage people to top up from £28 to £34.”
Enda Breslin, head of business development at omnichannel solutions firm eBay Enterprise, said it made “total business sense” for John Lewis to start charging.
“Andy Street has clearly looked at the numbers and drawn a parallel to home delivery where there has long been a free shipping threshold. They need to make a profit and this is likely to push up the average basket size.”
However, Helen Colclough, ecommerce development manager at River Island, said: “I suspect free is a key driver to click-and-collect, as well as convenience, so it will be interesting to see the impact.”
Anthony Thompson, chief executive of lifestyle retailer Fat Face, said he had no plans to introduce a fee as it is “vital” to make shopping as convenient as possible for consumers.
Martin Newman, chief executive of multichannel consultancy Practicology, warned: “It’s risky as they might lose out on conversions and the added money consumers spend when they come in store to collect parcels.”
Amazon is offering one-hour delivery to parts of central London. The service, which costs an extra £6.99 on orders of more than £20, is only accessible to shoppers who subscribe to the etailer’s £79 a year Prime membership scheme and live in selected London postcodes. It will roll out to all of London and other cities by the end of the year.
Drapers reporters @Drapers