‘John Lewis may have ditched Never Knowingly Undersold but it must keep service promise’

How many John Lewis customers took advantage of its Never Knowingly Undersold price promise last year?

The answer: “Less than 1% actively made price match requests in 2021”, according to the retailer.

When you consider the millions of customers served and transactions made at John Lewis, that stat tells you everything you need to know about the relevance of the pledge today, almost a century after it was introduced in its first two shops.

‘Never Knowingly Undersold’ may have been one of the most famous marketing taglines in retail, but it has passed its sell-by date.

Some say that the slogan was hard for consumers to understand, although it seems pretty clear – ’we’re very confident on the competitiveness of our pricing, but if you discover the same item sold elsewhere for less we’ll refund the difference’.

But while that might have been easy enough to achieve in 1925, it has become increasingly tougher. In fact, the promise has become eroded and inconsistent.

It never applied at John Lewis’ grocery stablemate Waitrose – although, ironically, it does to John Lewis products sold in the supermarkets – and it doesn’t apply to online players such as Amazon, which frequently set the pace on price in modern retailing.

“Any retailer that makes value for money a foundation stone of its appeal has to come good on the promise”

As MoneySavingExpert’s Martin Lewis put it, the price commitment ended up being a “psychological sop to consumers, giving an arguably false impression that John Lewis is cheap”.

Any retailer that makes value for money a foundation stone of its appeal has to come good on the promise. A price pledge hedged with caveats won’t cut the mustard. So as John Lewis ‘retires’ the famous line, it is simultaneously investing £500m into lowering prices – some £100m more than it invested last year.

The pledge has been replaced by a commitment to ‘Quality and Value’. The intention, says John Lewis executive director Pippa Wicks, is to be “more affordable for every customer, every day”. John Lewis will “more proactively lead on great value, rather than reacting to other retailers’ price changes”.

The rise of the Anyday label

The shift in strategy follows last April’s launch of John Lewis’ lower-price own-label brand Anyday.

The retailer says it has been the most successful brand launch in its history, having already generated sales of £125m.

The new price approach comes as consumers are battered by a cost-of-living squeeze, with household bills and prices of food and other products surging in an inflationary and turbulent environment.

While many John Lewis customers may be more protected than some from the impact of rising prices, they will be no more likely than others to needlessly splash cash.

Against the backdrop, the department store operator’s attempts to freshen up its value appeal make sense.

A quarter of Anyday shoppers are new John Lewis customers, which is a testament to the retailer’s ability to win custom through sharper everyday pricing.

That said, for many John Lewis customers, value for money means not just competitive prices, but a guarantee of quality and high standards of service.

In fact, John Lewis’ Never Knowingly Undersold pledge extended across those crucial areas, too – in-store signage included the follow-up line: ‘On quality, on price, on service’.

So it makes sense that John Lewis’ updated appeal to shoppers is pitched more explicitly on quality as well as value. 

Wicks said that the new quality and value promise “means all our customers can trust they’re getting the quality, style and service they expect from John Lewis at great-value prices”. 

That’s a tried and tested retail playbook that has also been deployed by Marks & Spencer, which in recent years invested in lower prices while focusing on the quality of its range – value for money need not always be the lowest absolute price.

Next, similarly, is not the cheapest fashion retailer on the high street, but has gone from success to success and weathered the pandemic storm better than most – a strength underpinned by its reputation for quality.

The added value of decent service

It is perhaps surprising that John Lewis has not sought to put service more overtly at the heart of its refreshed stance.

More than ever, when making purchases of complex and expensive products or services such as home technology, exceptional advice and service is something that people will pay for. It lies at the core of a value proposition that is about more than low prices. 

Service excellence has traditionally been central to John Lewis’ appeal. It may not always match up to its reputation – anecdotally at least, you hear plenty of stories about John Lewis service standards disappointing customers. 

But, with a bit more reinvigoration, high-quality service could resonate strongly with customers.

“Service excellence has traditionally been central to John Lewis’ appeal”

Even if it sometimes fails to live up to expectations, that heritage remains and is valued by customers and John Lewis could make more of it.

The company needs to nurture that, however, or risk others moving firmly into its territory – pureplays such as Ocado, whose drivers are well-known for going the extra mile, or AO, which urges staff to ‘treat every customer like your gran’, are showing the way.

As the proportion of John Lewis sales made online rises, it is increasingly service at the point of delivery that matters.

Like other retailers that have been through the mill in recent years, such as Tesco, renewed success has often included a renewed focus on the strengths that originally made them great, brought up to date for contemporary consumers.

John Lewis has made progress under the turnaround strategy of Wicks and Partnership chair Dame Sharon White. A modernised value message makes sense, but great service must remain central to the retailer’s USP.

• Sign up for our daily morning briefing to get the latest retail news and analysis