the value gamble.

Looking after the equity of your brand in the retail space right now is incredibly tricky. 

For the many companies across the Fashion & Sportswear spectrum faced with the conundrum of revamping their brand in a bid to secure their long-term future, every decision you make feels like a crunch one.

“Do we stick by our values and our existing customer base, and hope to ride out the storm?”

“Do we make sweeping changes to our model to capture a new audience?”

“Can we strike a balance that achieves both?”

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A regular risk mitigation strategy in these situations is to go all Chris Tarrant, and ask the audience : conducting a comprehensive consumer study.

Here you learn more about what they do, how much money they’ve got, where they shop, what colours they like, why they like (or dislike) your brand, and so on. 

From there, the insights gained provide valuable direction on how your brand can meet their needs and stay relevant.

An example consumer study by McKinsey & Co.

On paper the approach makes a lot of sense. This is something I’ve seen on multiple occasions in my past, and has the immediate effect of bringing the weight of objectivity into the big decisions.

But despite the methodical approach, does it present some risks too if you follow those insights to the letter?

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John Lewis are the most recent example of a retailer reaching for an insights study to help shape their future after suffering a tough 3 years, compounded by the pandemic wreaking havoc on their profits.

They spent the best part of 2020 gathering feedback from more than 20,000 people across their workforce, shareholders, customer base, supply chain and local communities. 

And what came out were a range of new strategies, two of which are particularly salient for their Homeware, Fashion & Accessories categories:

• Making Value and Quality more Accessible

• More Sustainable and Ethical

Let’s start with the first one: accessible value & quality.

It’s not hard how from these findings in October 2020, the own-brand ANYDAY label was born in April 2021, offering “customers John Lewis quality at prices they wouldn’t expect”.

As we now know, the label has stretched to Clothing & Footwear starting last week - with 700 items being introduced, all priced at less than £100.

John Lewis ANYDAY : “Quality you’d expect at prices you wouldn’t”

So we are looking at very affordable clothing that the people of the UK need more than ever.

After all, their research showed that “60% of UK adults are more money conscious now than they were at the start of the Covid-19 pandemic and despite the easing of restrictions, we know value for money is more important than ever to customers who are facing increasing financial pressures”.

John Lewis did their research, and have therefore delivered what the customer needs today.

And the customer is buying it - the ANYDAY categories launched in April have already generated £60m in revenue, attracted 750,000 buyers, with 25% of those new to purchasing from John Lewis, with students particularly keen to get involved.

By any measure, those stats represent a genuine commercial success, and I’d expect the clothing to be equally well supported. 

Critically, what we haven’t yet seen is how this move has potentially detracted from their branded business.

Are the £59 ANYDAY Chelsea boots going to take sales away from the £80 equivalents from Clarks? Or are they servicing 2 different audiences?

Certainly if I were in Clarks’ wholesale team, I’d be keeping a close eye on this metric and I’d expect all other brand partners to also see how ANYDAY alternatives might impact their business.

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So Risk #1: if you decide to compete against your equity-driving brand partners with your own gear, they may choose to walk away altogether. 

What impact might that have on your own equity if suddenly you become a predominantly own-brand retailer? 

How does that keep you elevated above the big-box accessible fashion labels from the H&M or Inditex brand stables?

That ties in closely with Risk #2 : making the value game work is a fragile balancing act. 

Even if the premium brands stick around, you will certainly see a shift in reliance onto lower cash-margin product, meaning you simply need to shift more of it. 

To generate increased volume and ensure the product is replenished and available in high quantities at all times, that places an extra strain on your entire supply chain.

The Guardian: the “Perfect Storm” impacting the UK Supply Chain.

Replenishment and stock availability are dependent on a smooth logistics operation, but a perfect storm of COVID & Brexit is presenting a formidable obstacle that may persist for more than just a few months.

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Which brings us to the second key strategy of this John Lewis revamp: more sustainable and ethical. An admirable ambition, but is it realistic when you play the value game?

Already with the move to a model reliant on pumping out more volume, the idea that an entry-price offer can contribute towards this goal is problematic. 

And there’s Risk #3: when you play the value game, you jeopardise any reputation of responsibility you may want to project.

After all, how can such low prices not mean a person or a natural resource is being exploited somewhere along the value chain?

And with a tagline like “new drops daily”, is this not just encouraging the throwaway culture that fuels over-consumption and tops up landfill sites?

Having delved deeper into the ANYDAY clothing, it’s hard to find convincing answers to these questions. 

With that said, there are some merits. 

For instance, all of the cotton is certified by the Better Cotton Initiative (BCI). To be clear, that doesn’t mean the products themselves end up being made from better quality cotton. The scheme is more focused on supporting more sustainable practices at farm level, such as efficient use of water and minimised use of pesticides.

The Better Cotton Initiative: how it works

The other merit is that the product is designed - at least aesthetically - with longevity in mind: it doesn’t conform to short-term trends, and it has an air of timelessness and versatility.

All of which supports a move towards “slow” fashion, in theory.

But for that to work in practice, the materials needs to endure as well. Again at these prices, I have my doubts that the quality stacks up - but I’m short of information to make a proper judgement.

And that’s a critical issue at this end of the market - lack of information available to the shopper. This crops up in several areas:

• Materials: how are they manufactured? What tangible environmental impact does each item have?

• Workers: who is making these garments, and what are their living & working conditions like?

• Care: how can the shopper look after the garments responsibly to maximise their lifespan?

• End-of-life: what can the shopper do with the item when they’re finished with it?

Which presents Risk #4: playing the value game means achieving low prices at every step of the value chain.

A knock-on effect of that is losing visibility of all the hands that are involved in getting your £6 t-shirt in front of your customers. 

And losing visibility means losing information that your customers are increasingly interested in having as part of their decision-making process.

A lack of information at best breeds suspicion, and at worst points to a cover-up of unethical practice, deliberate or otherwise. 

My concern with any value retailer with sustainability ambitions - and new ambitions continue to emerge on a frequent basis - is that those ambitions will always be second-best to perpetuating their volume model.

“Primark cares”…

When it comes to the crunch, and you need a 50 cents reduction off the cost of that sweater to achieve target margin, will you overlook the corners that you are forcing your supply chain partners to cut in order to make that happen?

Without the available information on how these prices are achieved, we - as shoppers - are now conditioned to assume the worst.

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Call me romantic, but I remain hopeful that ANYDAY by John Lewis can eventually present a robust model for ethical, accessible, responsibly-consumed clothing to be available at scale. 

It needs to happen. After all, why should responsible fashion be ring-fenced off to those who can afford to drop £100+ on a pair of VEJAs? 

The average weekly spend on clothing & footwear by household is at £23.40 in the UK.

What incentive is there for the average household - under more financial pressure than ever thanks to job insecurity, credit cuts & tax increases - to shop responsibly when prices are as inhibitive as they are today?

So it’s a hugely important problem to solve. And some credit goes to John Lewis on listening to their customers’ needs and trying to respond to them.

They don’t appear to have nailed it straight out of the gate, and the impact on their brand equity remains to be seen.

But the more we continue to voice our concerns & needs as shoppers, the more policy-makers, brands & retailers will need to innovate accordingly to meet those needs.