Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

John Lewis fee triggers click-and-collect debate

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

Readers' comments (2)

  • Their model & economics are quite different from others, so it's perhaps unsurprising this happened and that HoF, M&S etc won't be following suit.
    The consumer research is clear that "free" is a key driver for click and collect, especially for the first few occasions, so there'll be a psychological impact for customers. We also know that for several retailers there's a healthy double digit upsell from customers collecting, and it may be that JLs model (where the collector would instead be spending some of that money in Waitrose) may confuse the profitability analysis. Ultimately, the maths has to stack up, and it may be that this is a clever move based on tests that showed customers increased basket sizes to hit the threshold. But it remains true that JL's big rivals make it add up despite the lower AOVs on click and collect as their store delivery and store staffing costs still make it profitable. Being able to do C&C for free should be part of the modern basic multichannel offering, and isn't remotely in the same league as building a commercially sound 1 hour delivery capability.

    Unsuitable or offensive? Report this comment

  • Whilst I understand this is perceived to be a risky move, it is great news that a big retailer has realised the costs of free delivery is having an impact on margins and is actually doing something about it. Let's not forget that it is not the consumer who campaigned for free delivery & returns it's the retailers who have educated them and made it the normality and as such everyone to some degree has had to follow.

    High street customers don't expect the retailer they are buying from to contribute for their petrol, parking, bus or train fare so why should this apply online.

    I do think that delivery and returns should be affordable to the consumer but why give everything away for free. At the moment we're already giving away margin with promotional activity and then the delivery and returns offers just impacts this even more.

    At the end of the day having a business is all about being profitable and making money, not about giving everything away and making as little as possible. I really hope, John Lewis will see very little impact if any at all and then other big retailers would hopefully follow.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.