How John Lewis’s new Search strategy delivered growth and a stronger customer experience
John Lewis & Partners is one of the most trusted and recognised brands in the UK. But on today’s high street, even the strongest reputations can’t guarantee growth. UK retailers are under sustained pressure from the combined forces of an uncertain economic climate, the increased cost of living, changing shopper behaviours and global competition.
In response, many of them turn to short-term promotions to drive quick wins, but at a cost. According to ‘The Differentiation Dividend’, a whitepaper from Google and Kantar, the brand value of the UK’s top 10 retailers fell by 20% in a single year, due in part to over-discounting.
John Lewis is taking a different path. Rather than chasing short-term revenue, it's overhauling its search marketing strategy to prioritise ongoing profit and better align with what customers really value.
Value over volume
By rethinking its data-driven search marketing, the iconic retail brand has driven a rise in profit and strengthened its connection with customers throughout their shopping journey.
Andreas Nicolaides, John Lewis
We know that our customers' experience is enhanced by John Lewis products showing up in the right places at the right time.
©MMXXV MARKETING WEEK
Sponsored by
+20%
+4%
Increase in John Lewis's average profit across Google Search
Increase in John Lewis's target return on Search ad spend
Brand differentiation is the single biggest driver of long-term sales growth, responsible for 57% of future gains, according to the same Google/Kantar study.
This finding is not lost on John Lewis, which reintroduced its Never Knowingly Undersold brand manifesto last year. Director of trade and channels marketing Andreas Nicolaides explains: “It’s not just about price, it’s about having the right value definition, which for us includes quality and service. It’s not a race to be the cheapest, it’s ensuring we offer value for money for our customers.”
John Lewis is also supporting this value-focused ethos with a sophisticated search marketing strategy focused on sustainable, profitable growth, brand health and customer trust. As Nicolaides says: “We know that our customers' experience is enhanced by John Lewis products showing up in the right places at the right time.”
The company’s Google Search and Shopping activity drives a significant proportion of its website and app traffic, and Nicolaides calls it “one of the most important touchpoints for our customers”. Search serves as a discovery engine, which both new and existing customers use to research and learn about new products, and it gives a clear indication of purchase intent.
But as well as driving sales, Search also reinforces the John Lewis brand promise, and Nicolaides cautions that any marketer simply chasing clicks is missing the point. Instead, the focus on value over volume has underpinned a strategic shift for the retailer: using improved data to fine-tune Search campaigns around profitable demand, not just traffic.
Circa 60% of all John Lewis’s sales now come from digital channels. Having the ability to identify the right opportunities at the right time can create value for both customers and the business.
“With Google’s support we’re much better at understanding our performance and the value of our channel, especially with the changes we’ve made in better understanding our profitability,” says Nicolaides. Yet this wasn’t achieved overnight.
“Having a sound methodology that is sophisticated in its approach and backed up with data is really important, but testing across attribution, incrementality and MMM [marketing mix modelling] is so important too. You can define campaign value in different ways, depending on what you are trying to achieve from a customer point of view and from a marketing perspective. Different campaigns have different goals, but one thing stays the same: doing the right thing for the customer.”
Why Search matters
The move to prioritise value for customers and profit over revenue in Google Search made clear business sense, however John Lewis’s legacy systems initially created challenges, from slow and unreliable data flows to delayed reporting. This was particularly perilous during critical peak periods such as Black Friday.
While Google's auctions use real-time data, John Lewis was previously only importing sales data once a day, which led to inefficient bidding and wasted budget. It also meant marketing resources were preoccupied with day-to-day operations instead of strategic planning.
Nicolaides says the older methodology caused inconsistencies in optimisation and performance: “We knew there was a lot of scope to use our data better.” John Lewis overcame this challenge by switching to real-time profit data using Server-Side Google Tag Manager (sGTM). This allows the retailer to manage tags and data collection on its own servers rather than just the browser.
The new approach means John Lewis is using Search more effectively. And Nicolaides adds: “We’re now able to use advanced measurement tools, such as ‘consent mode’ and ‘enhanced conversions’ to improve the effectiveness of our campaigns. This means we can offer a better user experience for our customers and ensure that the ROI for us is more accurate and more actionable.”
With more reliable data and greater control, John Lewis’s Google Search campaigns are better optimised than they have ever been. Average profit has risen 20% across Search overall, while target return on ad spend has increased by 4%.
The company’s paid search marketing is now well honed, but success goes beyond numbers, Nicolaides says. “It’s about optimising towards the right customer experience and ensuring that our customers can find the right products.”
Profitable growth and customer satisfaction
John Lewis is now well positioned to embrace the future of search marketing in an AI-driven world. “We have a robust and clear digital maturity framework and testing plan that we’re working on and we’re always looking to test new advertising capabilities through the Google tech stack and beyond,” says Nicolaides. “There’s always a focus on using the most effective data possible and having an insight-to-action based approach.”
He adds that, with AI changing the search landscape and with emerging Google Search features such as AI Overviews, it's important to continue testing new developments across search ads, including the upcoming AI Max for Search.
“It’s really important you keep on top of the changes in the industry and ensure that you’re trying to drive as much value as possible out of your search campaigns, whilst ensuring that you don’t compromise on customer experience.”
Nicolaides’ words echo findings from ‘The Differentiation Dividend’, which identifies ‘standing out from the crowd’ as one of three priorities for retail growth. A key driver is staying ahead of competitors by using technology and data to enhance customer experience. In particular, as John Lewis has demonstrated, supercharging search marketing by leveraging real-time profit data can have real impact. “We’ve been able to step-change our performance,” says Nicolaides.
Brands that see beyond search marketing as a tactical performance channel and instead treat it as a strategic growth lever are readying themselves to build sustainable success as the economy strengthens. For John Lewis, the investment was a no-brainer.
Looking to the future