At the end of day 3 of the Big Show, there was one of the best keynote I’ve seen, featuring two of the most interesting brands at the moment – Sir Charlie Mayfield of John Lewis and Kevin Plank of Under Armour.
The top of the talk was ‘Collaboration is the New Competition’…but really like any talk that was a topic very loosely stuck to.
Here are the key out takes from the chat:
1. Culture is King: Kevin Plank had the popular quote ’culture eats strategy for breakfast’ on one of his slides; but really it was Charlie’s show when it comes to what makes great culture.
As most people know, the John Lewis Partnership is a partnership! Owned by the people who work in the business since 1929. That means it’s gone from 200 to 90,000 employees. Charlie was quick to point out ‘This affects many aspects of how we run the partnership – there are no executive share plans – just a dividend which the board decides on…Everyone in the company gets the same % of their pay as partnership bonus’ – From management through the staff at store.
He went on further to explain, what exactly this means. ‘I’m accountable to the people that work in my business they are my shareholders; Twice a year I get questioned by an elected council and at the end of that time (which is webcast to the business) they then vote on whether they continue to support my leadership of the business.’
2. The End of Multichannel: John Lewis is far advanced when we think about ‘omni’ or ‘multi’ channel. In fact 40% of John Lewis purchases were made online. Part of this success has been a re-engineering of the business to work like it was born in the era of the internet. Mayfield said: ‘We’ve had to reengineer our business and now we are able to take an order at 8 pm and delivery at 2pm the following day from any store’.
With so much talk about the past couple of years at conferences around this topic I particularly liked it when Charlie said ‘the age of multichannel is over…channel is like a language that retailers speak to justify what they’re spending money on. It’s not understood by the customer. What language do you speak – channel or customer?’. According to their own data, 75% of John Lewis customer shop both physical and digital. The key is to ‘focus on which customer you are serving – if people are going to go to a shop you need to make it worth it.’ Thank you Charlie again!
3. Product to Service: naturally with digital it forces a product-centric company to think service. Which is the transformation undergone by Under Armour. They are a product company first. To quote their founder Kevin Plank ‘ we tell and compel with amazing stories – it was the year of the MVP for Under Armour in 2015′ (in reference to the success of their sponsorship deals).
They moved from a wholesaler to a retailer. Plank said ‘retail began as a liquidation experiment for us, we have factory houses which is the only place the brand is off price’. This has developed to ‘brand houses, fully fledged experience for the customer’. They currently have 400 stores in the US. For them physical presence and product is important but they want to move from changing the way athletes dress to the way they live. Enter Connected Fitness.
Plank said ‘we’re not worried about the next shoe up-and-comer but the competition that doesn’t exist yet’. So with that in mind, Under Armour bought a raft of apps ‘Map My Fitness (ride and run)’. ‘Endomondo’, and ‘My Fitness Pal’. Beyond the apps this gave the business a bunch of awesome engineers, as well as a new CDO (Chief Digital Offier, Robin Thurston co-founder of Map My Fitness) and 160 million registered users. This means Under Amour now have the largest digital fitness community. Plank’s goal is to merge them together into ‘Under Armour Record’. This is all being done in partnership with IBM’s AI/cognitive computing tool Watson. His idea is to move the business from ’selling at someone to helping them – I know if someone went on 7 hikes last month…so they might want to buy a hiking shoe’.
Finally another word from Charlie and maybe his most profound point:
‘We’re dealing with businesses models that aren’t as efficient as they use to be – people are defending those old business models’