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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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John Lewis to charge for click and collect as parcel volumes grow fast

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John Lewis to charge for click and collect as parcel volumes grow fast
John Lewis to charge for click and collect as parcel volumes grow fast
John Lewis said today that it would start charging for its click and collect service.

It says the move to charge £2 to deliver orders worth under £30 comes as online shopping is growing fast. It is sure to be closely watched by others in the industry.

Where once the department store, an Elite retailer in the IRUK 500, processed 350,000 click and collect orders in its first year, it now sees more than 6m a year as demand for the service has taken off.

At the same time costs have grown. John Lewis says it will spend more than £80m on its supply chain function this year. The £100m it is spending this year on IT is five times more than it did five years ago. The operation of delivering click and collect parcels means moving tens of thousands of parcels each night from its distribution centre to more than 360 collection points.

Mark Lewis, online director at John Lewis , says the move to charge is necessary to ensure the service is fit for the long-term.

"John Lewis is committed to being a leading omni-channel retailer and understands the importance of providing its customers with choice, convenience and above all else a long term commitment to customer service.

“We offer our customers a wide variety of delivery options but we know right now the delivery option of choice is next day Click & Collect. The change we have announced today will mean that the majority of orders will remain free of charge while allowing us to invest further in the expansion of Click & Collect to ensure it continues to delight customers as it grows in popularity"

Our view: Yesterday we considered the inevitability of paid-for delivery as we mapped how Amazon had moved over the years from free delivery to subscription-based one-hour delivery, launched yesterday in London.

Today the news from John Lewis is another indicator that delivery is unlikely to remain free in future. As the volumes ordered online have grown, companies can no longer afford to absorb the costs. Luckily, it seems customers will pay for convenience and speed. John Lewis says it will invest that money into improving that service. And that's vital for once delivery is paid for, it has to work even better than before. If the service doesn't measure up to promise, it fails in more ways than one.
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