John Lewis Case Study for MS4 Advertising
John Lewis: Making the nation cry...and buy
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Summary
In mid-2009 John Lewis, the UK department store retail chain, was struggling in a challenging financial climate.
Its existing advertising was ineffective and a new approach was required. A bold decision to use highly
emotional advertising, particularly on TV, generated a huge amount of interest in the brand. It resulted in
more shoppers, visiting its stores more frequently and increased the average spend. The campaign generated
£1074m of incremental sales and £261m of incremental profit in two years. Thousands of its employeepartners also benefited as the profitability of John Lewis communications boosted their annual bonuses.
Introduction
Few people would dispute that in 2012 John Lewis is one of the most talked-about and admired advertisers in
the UK. But it's easy to forget how recently that wasn't the case and how rapid the turnaround in the brand's
communications effectiveness has been. This paper tells the story of how a bold decision to use highly
emotional advertising, in a very challenging economic climate, has delivered a highly impressive £1074m of
incremental sales and £261m of incremental profit since Christmas 2009.
Not only has the John Lewis business benefited greatly but so have all the Partners, who share an annual
bonus based on profits. This paper proves how emotional advertising has directly enriched the lives of
thousands of people, and brought a tear to the eye of millions.
About John Lewis
The first store bearing the John Lewis name opened in 1864, but the brand as we know it today was born in
1929 when John Spedan Lewis inherited the business on his father's death. John Spedan was a visionary
thinker who believed that commercial success would result from putting the happiness of workers at the heart
of everything the company did. He created a Partnership structure in which every permanent employee is an
owner of the business.
While the idea at the heart of John Lewis was radical, in other respects John Lewis has been a very
conservative organisation. It wasn't until 2005 that all stores were open 7 days a week 1. It wasn't until 2007
that all but two of the stores took full John Lewis branding2. There are still only 36 stores, compared with
almost 350 for M&S3 and more than 150 for Debenhams. And, unusually for a retailer, the company has been
very reluctant to spend significant amounts of money on marketing and advertising. John Lewis is an
inherently modest organisation. Between 1997 and 2006 it spent an average of £5.7m per year on advertising,
compared to £26.4m for M&S and £12.9m for Debenhams4.
Setting the scene
The story covers the period from early 2009 to the end of 2011. Throughout this period life has been very
difficult on the UK high street. The financial downturn has driven consumer confidence to record lows and the
housing market has collapsed, particularly impacting on retailers with reliance on home-related categories.
Figure 4: UK retailers in John Lewis categories announcing closure/administration
Source: Press coverage
John Lewis in 2009: a retailer suffering more than most
After years of solid growth, John Lewis was under intense pressure. Gross sales were -0.1% and like-for-like
sales -3.4% for the financial year ending Jan 2009. Operating profit had dropped by 26% and the annual
Partner bonus was the lowest for five years (Figure 5).
As Andy Street, the Managing Director (and Partner since 1985), said at the time: "Last year was probably the
most tricky in my time at the Partnership ... The year ahead is going to be equally difficult, if not harder."7
While John Lewis had been making steady progress to make its business more competitive and appealing
(stores had been refurbished, the website was receiving investment), the brand overall remained a bit of a
sleeping giant: it kept a low profile and was respected rather than loved. It was considered more for functional
items than for emotional ones. For some it seemed expensive and out-of-synch with the times.
The marketing team was convinced that communications could play a significant role in re-energizing the
brand and business. However they faced an internal challenge: John Lewis had recently significantly increased
its investment in advertising8 ... but to little apparent positive effect.
The various campaigns in TV and print across 2007 and 2008 had been product-focused and lacking in
consistency. They had struggled to cut through, were poorly branded and had failed to impress Partners. Their
average Awareness Index was 29.
In March 2009 the marketing director left. Marketing magazine said "Whether Inglis [Craig Inglis, head of
brand communications] has inherited a poisoned chalice is open to debate. He certainly faces a considerable
challenge, given that weekly sales at the upmarket department store have been sliding since the beginning of
the year."10
The communications solution
A new communications approach was required. The team felt that the emphasis needed to be far more
emotional, to make existing customers more conscious of what makes John Lewis special. John Lewis serves
people at some of the most emotional times in their lives (moving into or refurbishing a home, getting
married, having babies, preparing for Christmas) yet the brand had never brought to life the emotional role it
plays.
Analysis of previous IPA effectiveness cases had demonstrated the power of emotional strategies to drive
significant business effects11, and learnings from neuroscience were demonstrating that the most effective role
for communication is to plant positive emotional memories in people's minds, so the time felt right to try a
more emotional approach.
The primary objective was to encourage existing shoppers to visit a little more and spend a little more. On a
secondary level it was hoped that communications could get those who hadn't shopped at John Lewis recently
to see the brand in a fresh light and decide to visit again or for the first time.
There have been two main strands of communications (both led by TV advertising), plus a continuation of
support (mostly in press) for topics like Clearance12 and fashion.
Christmas
Christmas 2009 became the first test of this new strategy. Christmas is hugely important to John Lewis sales13
so the stakes were high.
At Christmas most retailers showcase gifts and emphasize how easy and fun they will make Christmas
shopping. Celebrities, sparkle and over-excitement are involved. However John Lewis chose to position itself as
the home of thoughtful gifting, celebrating those who put more care into what they choose and how they
present it.
The Christmas 2009 commercial 'Remember the feeling' (Figure 9) showed children unwrapping adult gifts
with undisguised delight. It used a well-known moving track re-recorded by a contemporary artist, a model
which all subsequent commercials followed (Figure 10).
Figure 9: 'Remember the feeling' TV ad and other Christmas 2009 communications
Figure 10: Music tracks used in the TV ads
In Christmas 2010 the campaign was spearheaded by the TV ad 'For those who care' (Figure 11) and for
Christmas 2011 'The long wait' was created (Figure 11).
Figure 11: 'For those who care' TV ad
Figure 12: 'The long wait' TV ad and other Christmas 2011 communications
ii. 'Never knowingly undersold'
John Lewis's commitment to 'Never knowingly undersold' was introduced by John Spedan Lewis in 192514. He
intended it not just as a price promise but as a total trading philosophy, meaning not only that if a customer
can find the same product cheaper elsewhere John Lewis will refund the difference, but also that all products
will be the best quality for the price and expert advice will add additional value. However 'Never knowingly
undersold' had been allowed to become rather recessive and purely price-focused in meaning (Figure 13).
Figure 13: 'Never knowingly undersold'communication pre 2010
As the recession continued it was felt that the time was right to return to the broader meaning of 'Never
knowingly undersold' and put it back at the heart of the brand. A new mark (Figure 14) was introduced on all
products and touchpoints, and there was a desire for communications to highlight the refreshed philosophy.
But how to do that within an emotional approach?
Figure 14: New 'Never knowingly undersold' communication from 2010
The resulting commercial 'Always a woman' (Figure 15) was an emotional demonstration of John Lewis's
constancy through the key moments of a customer's life, implying that in a world that now felt very
changeable John Lewis remains a beacon of stability, offering permanent and multi-dimensional good value.
Figure 15: 'Always a woman' TV ad, May 2010
In Autumn 2011 John Lewis decided to again support the 'Never knowingly undersold' promise but this time
focusing on one of its three key 'directorates': Electrical & Home Technology. The price-matching commitment
had been recently extended to the John Lewis website and to matching competitors' online prices, which
made John Lewis more competitive. However John Lewis wasn't always seen as somewhere to go for the latest
technology products and desirable brands.
The commercial 'Through the ages' (Figure 16) cleverly continued the 'passage of time' idea but using the
insight that people enjoy reminiscing about entertainment products that have played a big role in their lives
over the years.
Figure 16: 'Through the ages' TV ad and other electricals communications, September 2011
The media approach
John Lewis's media approach has worked hard to optimise the emotional strategy and ensure an integrated
approach. The two main channels have been TV and press (Figure 17).
Figure 17: Media plan
TV
TV is central due to its unparalleled ability to engage large audiences emotionally. Timelengths have been long
(at least 60" for the lead version of each commercial) and airtime bursts brief, making the ratio of production
cost to media spend high. However at John Lewis communications are seen as a customer touchpoint just like
a new product line or store opening, so they must reflect the brand's quality standards.
TV buying has ensured that the ads are experienced within emotional programming (e.g. X Factor/Britain's Got
Talent, dramas, soaps) and that as many people as possible see the ad for the first time within a short period
(since this is when word-of-mouth and sharing are most likely).
While the typical John Lewis customer was not an early adopter of social media it became clear in 2009 that
people were talking about the advertising on Facebook and Twitter. Since Christmas 2010 the TV ads have
launched on the brand's Facebook page the day before they first air on TV. By Christmas 2011 TV buying was
prioritizing the programmes seen to be highly 'sociable' (provoke a much higher number of Tweets within 24
hours than you'd expect from their coverage levels - Figure 18).
Figure 18: Analysis of 'sociability' of TV programmes
Source: Data Science. The horizontal axis takes account of how long a programme is, since this affects how
likely it is to generate Tweets
Print (press/outdoor)
Print channels are important to add more rational messaging about products, prices, stores and Clearance
periods to the emotional story told on TV. However even here a more emotional approach has been
developed using richer colours, stylish photography and more emotive copy (Figure 19).
Figure 19: Examples of more emotional print communications
A consistent look and feel has created a strong tonal 'handwriting' for the brand across all product categories
and types of message. This improves branding and communications efficiency, contributing to media spends
remaining far lower than those of key competitors (Figure 20). M&S's annual TV spend is greater than John
Lewis's entire annual advertising spend15.
Figure 20: John Lewis above-the-line spend and share of voice
Source: Nielsen AdDynamix
The results
The John Lewis campaign has become one of the most popular and successful marketing stories of recent
years. We will review the impact of the communications in a number of ways.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
The communications were noticed and enjoyed
The communications were sought out, talked about and shared by consumers
The communications were talked about by the media and entered popular culture
Brand perceptions improved
Penetration, frequency and average spend increased
The business grew and outperformed the competition
The communications directly contributed to significant sales and profit uplifts
The communications had other indirect business effects
The communications made Partners very happy
i. The communications were noticed and enjoyed and triggered
Tracking shows that existing customers, our primary audience, have noticed the advertising to an extent
previously unseen (Figure 21) and have really enjoyed it, with the music contributing strongly to appeal (Figure
22).
Figure 22: Advertising enjoyment and music enjoyment As intended the ads triggered positive emotions
amongst customers (Figure 23).
Figure 23: Emotional response to ads
Source: Millward Brown tracking amongst John Lewis shoppers in catchment areas (These questions weren't
asked for Christmas 2009 and there isn't a norm)
We also have evidence that memorability and emotional engagement extend beyond John Lewis customers to
a wider audience. In Campaign magazine's Punter Appeal research'The long wait' achieved the highest rating
to date for a private sector ad (Figure 24) and in a Daily Mirror poll (Figure 25) the John Lewis Christmas 2011
ad was strongly preferred.
Figure 24: 'Punter Appeal' scores17
Source: Campaign magazine
Figure 25: Daily Mirror poll
A more sophisticated piece of evidence is from a neuroscience study (Figure 26). The brain activity of an alladult sample was monitored while watching 'Always a woman'. This revealed very strong 'memory encoding',
which correlates highly with subsequent purchase behaviour, driven by very high emotional engagement.
ii. The communications were sought out, talked about and shared by consumers
Not only were the communications noticed and enjoyed at the time of viewing but people talked about them,
looked for them online and shared them, thus greatly amplifying the effect of the bought media and implying
an active engagement that is more likely to lead to behavioural change than merely passive consumption of
paid-for airtime.
First the evidence for our primary target audience of existing customers: tracking shows that they were
unusually likely to say they've talked about the advertising (Figure 27), they contacted John Lewis in large
numbers to praise the advertising (Figure 28) and many following John Lewis on Facebook commented, shared
the ads and even formed groups to champion them (Figure 29).
Figure 27: Talking about the advertising
Source: Millward Brown tracking amongst John Lewis shoppers in catchment areas
Figure 28: Examples of direct feedback from customers
Source: John Lewis
Figure 29: Facebook response to Christmas 2011 ad
There is also a wealth of evidence of active engagement by a broader audience beyond just existing customers.
Searches for 'john lewis ad' or similar vastly exceeded searches for 'm&s ad' or similar, or 'comparethemarket
ad' or similar during this period (Figure 30).
Figure 30: Consumer searches for advertising
Source: Google Insights for Search18
The numbers on the vertical axis don't represent absolute search volume numbers but relative ones: the data is
normalized and presented on a scale from 0 to 100; each point on the graph is divided by the highest point or
100.
Huge numbers of people have viewed the John LewisTVadson YouTube (Figure 31), with many spoof versions
created and shared too.
Figure 31: YouTube viewing of ads
Source: YouTube, 2.4.12
Several versions of these ads exist on YouTube: views for all non-spoof versions have been combined
People continue to come back to the ads months after they have aired, debating which is the best and asking
about the tracks. Many of the comments mention the ads making viewers cry
Figure 32: Example YouTube comments
Source: YouTube
The John Lewis ads are particularly likely to be watched to completion on YouTube (Figure 33), whereas the
dropout rate for many ads is high.
Figure 33: YouTube viewer retention throughout John Lewis ads, relative to films of a similar length
Source: YouTube
Such was the Twitter interest in 'The long wait' that it trended- globally - within six hours of it being launched
online, even before it had been on TV (Figure 34). This is a phenomenal achievement given John Lewis is a UKonly chain of 36 stores and it was Armistice Day. On the day the ad launched on TV Twitter mentions of John
Lewis were up more than 1500% (Figure 35). Even celebrities expressed their enthusiasm to their followers
(Figure 36).
Figure 34: Twitter worldwide trending topics on the day 'The long wait' launched on Facebook
Source: Twitter, 11.11.11
Figure 35: Tweets mentioning John Lewis pre and post 'The long wait' launch
Source: Analysis by Precise (media monitoring company) of Twitter 'storms' in 2011
Figure 36: Celebrity tweets about 'The long wait'
Source: Twitter
It is unlikely that the extremely high levels of online engagement above could be achieved if only
existing customers were involved. Indeed some of the comments bear that out (Figure 37).
Figure 37: Examples of comments from non-customers
Source: Email to John Lewis; Facebook
iii. The communications were talked about in the media and entered popular culture
All the John Lewis ads have been frequently discussed in the media (Figure 38), again ensuring that a limited
budget went much further and extending the likely impact of the campaign beyond existing shoppers. The
estimated 'advertising value equivalent' of all the coverage is £4.2m19.
Figure 38: Example press coverage
'The long wait' was spoofed by Channel 4 to promote Gordon Ramsay's Christmas show and by Sky to promote
Soccer AM (Figure 39), and became inspiration for cartoonists (Figure 40).
Figure 39: Soccer AM spoof of 'The long wait'
Figure 40: Daily Telegraph cartoon of George Osborne
'Always a woman' was the subject of 'Thought For The Day' on BBC Radio 4's Today programme20 and an exam
topic for AS Media Studies. 'The long wait' became an official subject for church sermons and school
assemblies: over 7000 schools (teaching over a million pupils) downloaded an assembly guide devoted to the
ad21 (Figure 41).
Figure 41: Assembly guide involving 'The long wait'
Source: assemblies.org.uk
The music has been an important part of the advertising's entry into popular culture. The tracks have charted
after the ads launched and featured heavily in radio airplay (Figure 42). Ellie Goulding's 'Your song' was even
chosen as the first dance at the wedding of the Duke and Duchess of Cambridge.
Figure 42: Popularity of music tracks from the ads
Source: Record companies
'Sweet child o' mine' single sales for month 1 only
To our knowledge no-one has quantified the business benefit of advertising tracks achieving radio exposure, so
we have attempted to do so (Figure 43) and suggest an 'advertising value equivalent' of about £14.6m. Given
the TV media spend was only £17.7m, this free coverage almost doubles the investment and demonstrates for
the first time the considerable value of advertising using music that gets radio airplay.
Figure 43: Estimate of the value of the music from the John Lewis advertising receiving radio airplay
The tracks will have been played on both national and local stations, both BBC and commercial, and we have
no information about dayparts so can only approximately estimate the likely coverage achieved by the tracks.
Taking Heart London as an average station that played the tracks:
One airplay of a track would achieve about 132 impacts (coverage of 132k adults) so 123,225 airplays would
achieve 16.3m impacts.
A national average Cost Per Thousand for a 30" radio ad is about £1.50 so the CPT for 3 mins (the length of a
track) would be £9.00. Therefore the advertising equivalent cost of the radio airplay is about £146.4m (16.3m
impacts x £9.00).
Making a conservative assumption that John Lewis is thought about perhaps 10% of the time the tracks are
played, we get a value of £14.6m for the radio airplay.
Source: MG OMD with guidance from the RAB
In November 2011 John Lewis released a charity album of the tracks from the ads22 (Figure 44). 17,349 copies
have so far been sold23.
Figure 44: John Lewis album of tracks from the TV ads, in association with Save The Children
iv. Brand perceptions improved
The key question here is: do customers now find John Lewis more emotionally relevant? Unfortunately we
don't have a direct post-advertising equivalent of Figure 8 but we do have tracking evidence for some of the
emotional affinity measures mentioned (Figure 45). Trust and perceived modernity have improved markedly
over the period of the campaign (with more rational measures such as 'better quality' and 'better service' also
increasing).
Figure 45: Agreement with brand image statements
Source: Millward Brown tracking amongst John Lewis shoppers in catchment areas (rolling 12 week data) Gaps
represent breaks in fieldwork
Customers are prepared to directly attribute the advertising with making the brand more appealing and
making them feel good about shopping at John Lewis (Figure 46).
Figure 46: Brand 'feel good' generated by the advertising
Source: Millward Brown tracking amongst John Lewis shoppers in catchment areas (The 'feel good' question
wasn't asked for Christmas 2009 and there isn't a retail norm)
With particular respect to the 'Never knowingly undersold' strand of communications, awareness of the
promise has grown every time these ads have been on air (Figure 45), implying greater appreciation of the allround value that John Lewis offers.
Figure 47: % aware of 'Never knowingly undersold'
Source: Millward Brown tracking amongst John Lewis shoppers in catchment areas (3 month rolling data)
v. Penetration, frequency and average spend increased
We have seen that perceptions of John Lewis have changed during the campaign period, but has behaviour?
Our primary objective of getting existing shoppers to visit more and spend more has indeed been achieved
(Figure 48). While increases of 3% may seem small, combined they mean that average annual spend has grown
by 6% (Figure 49), and for a retailer of John Lewis's scale that has a massive impact.
Figure 48: Average number of visits per year and average spend per visit (indexed on 2009)
Source: John Lewis analysis of payment card data (not possible prior to 2009 because EPOS system not in place)
Figure 49: Average annual spend per John Lewis customer
Source: John Lewis analysis of payment card data
(not possible prior to 2009 because EPOS system not in place)
Furthermore our secondary objective of increasing penetration has also been achieved (Figure 50). The ability
of the advertising to actively engage a broad audience (apparent in the earlier social media evidence) has
resulted in John Lewis acquiring 10% more customers. This makes the frequency/spend growth more
significant, since you would expect marked increases in penetration to result in lower frequency and spend,
since the customer base contains more new and occasional shoppers. The implication is that existing
customers increased their visiting frequency and spend per visit by significantly more than the 3% overall
figures.
vi. The business grew and outperformed the competition
Following a difficult 2008 where sales declined slightly, John Lewis returned to growth from 2009 onwards
(Figure 51).
Figure 51: John Lewis gross sales
Source: John Lewis financial reports
(John Lewis financial years run Feb to Jan but have been taken as equivalent to the relevant calendar year)
Like-for-like sales growth has become positive again (Figure 52), although 2011 was a particularly challenging
year for John Lewis in line with the rest of the high street.
Focusing on the pre Christmas periods so crucial to retailers: John Lewis's December sales have been
particularly mpressive since the new advertising began, outperforming most of the rest of the high street
(Figure 53) and setting new internal records every year.
Figure 53: Christmas period like-for-like sales growth
Source: Published financial information24; BRC: British Retail Consortium Retail Index (non-food)
As Neil Saunders of retail consultancy Conlumino said: "I think relative to the rest of the high street they've
been doing very well. They've gained market share ... Their performance has been robust compared to
others."25. Market share growth is indeed evident, both at overall department store level (Figure 54) and for
the two of the three directorates for which we have market share information 26 (Figure 55).
vii. The communications directly contributed to significant sales and profit uplifts.
It's clear that John Lewis's business did very well during this period, but the critical question is: to what extent
are communications driving this, versus other factors? The model distinguishes between factors which drive
variation in base sales and in incremental sales. The effects of the number of stores, the weather, consumer
confidence and growth in internet shopping are all observed at the level of base sales (Figure 57).
For Nov 2009 to Jan 2010 only the TV advertising is included here (print is excluded), which is why the total
incremental revenue figure of £1019m is lower than the figure of £1074m quoted earlier.
The Christmas TV ads have been particularly hardworking, with the latest two delivering extremely high profit
ROIs of over £9 (Figure 60).
The communications made Partners very happy
The Partnership's overall stated purpose is "the happiness of all its members, through their worthwhile and
satisfying employment in a successful business."
Firstly who do I congratulate on the most intriguing advertisement campaign recently aired on Television from
John Lewis. I absolutely loved it, I understood immediately how the girl/woman interacted with the brand, I
even recognised some merchandise from our shop floor myself.
Gorgeous, sentimental, spell-binding and perfectly sums up a brand we have every reason to be proud of.
Absolutely love it.
I would firstly like to congratulate you on a truly fantastic and moving Christmas advert. The first time I saw it, I
cried!
We have been watching the new advert in the Partners entrance – it’s lovely. You have nearly every woman in
Wycombe in tears. I think we all started recognising our own daughters and then flipped to seeing ourselves in
the advert. Brilliant!
Just shown it, great reaction, tears and applause and huge thumbs up.
Source: Letters to John Lewis Gazette, emails to Marketing department
John Lewis is the UK's largest employee co-operative. The directness and scale with which employees share in
the business's success is perhaps unique. Every March the board decides on a percentage of pay to be given as
a bonus to all permanent employees regardless of position or salary, depending on the profitability of the
Partnership overall. For the three financial years that this activity straddles both John Lewis and Waitrose have
gone from strength to strength, so bonuses have been generous at 15%, 18% and 14% of annual salary
(equivalent to 7 to 10 weeks' pay -an unprecedented level of generosity in retail)
Figure 66: Partners celebrate the bonus announcement, March 2011
Summary
This paper tells the story of how, in a little over two years, John Lewis communications have propelled the
brand into the nation's hearts, achieved a return on investment of over 500% and made every Partner better
off.
Footnotes
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Traditionally John Lewis was closed on both Sundays and Mondays.
Many stores retained their original department store names (e. g. Robert Sayle in Cambridge) until
very recently. Peter Jones in London and Knight & Lee in Southsea still retain their original names.
There are almost 350 M&S stores that aren't food-only (there are over 700 stores in total). Source:
Mintel 'Department Store Retailing', March 2012.
Source: Nielsen Media Research.
The Consumer Confidence Index is an average of 1000 adults' appraisal of current economic
conditions, expectations regarding economic conditions six months hence, appraisal of current
employment conditions, expectations regarding employment conditions six months hence and
expectations regarding their total family income six months hence
The Present Situation Index is an average of respondents' appraisal of current economic conditions
and current employment conditions.
The British Retail Consortium-KPMG Retail Sales Monitor is an accurate monthly measure of retail
sales performance that acts as both a benchmark for participating retailers and as a key economic
indicator. It measures changes in the actual value of retail sales based on figures supplied by about 70
participating companies.
Source: Daily Telegraph, 11.3.09.
Advertising spend had totalled £48.7m during 2007 and 2008. Source: Nielsen Media Research.
Source: Millward Brown.
Source: Marketing magazine, 27.5.09.
Source: Marketing in the Era of Accountability, Les Binet & Peter Field, 2007.
John Lewis has two annual sales periods called Clearance.
The four weeks leading up to Christmas typically deliver about 20% of John Lewis's annual sales and
about 40% of annual profit. Source: John Lewis.
Prior to taking over John Lewis in 1929 John Spedan was the Managing Director of Peter Jones and
instigated the 'Never knowingly under sold' policy there.
Source: Nielsen AdDynamix.
John Lewis's tracking has always focused on existing shoppers, 18+ ABC1C2.
2000 members of the public are asked to rate TV ads from a particular agency every month. The
average rating is a combination of how impressed people are with the ad, how much the spot makes
them like the brand and how likely they are to share it with others.
Search terms used:
Weeks included in Christmas trading updates: John Lewis 5, BRC 5, Next 21, M&S 13, Debenhams 19,
Argos 18, Comet 11. M&S figure is for general merchandise only (food excluded).
Source: The Guardian, 2.3.12.
John Lewis's share in Fashion is very small and robust share information for this category is hard to
come by.
Evening Standard, 13.4.11.
Net profit is calculated using incremental revenue excluding VAT because the marginal contribution
figures John Lewis use relate to VAT- exclusive revenues. Separate marketing contribution margins for
store sales and online sales have been used.
Source: Marketing in the Era of Accountability, Les Binet and Peter Field, 2007.
A caveat here is that ROMI figures are heavily affected by the innate profitability of the sector and of
the company.
Source: How advertising pays back', Tim Broadbent, Admap 422, Nov 2001. Used in this way in the
Hovis and Essential Waitrose papers of 2010, amongst others.
An adstock of 85% means that 85% of the ad's effect carries over to the following week, then 85% of
that effect to the next week, and so on. Christmas ads usually have shorter adstocks because their
subject matter is time-limited.
Source: John Lewis Partnership Constitution.