6 John Lewis The John Lewis partnership is one of the UK's most successful retailers. It consists of 2 divisions: the John Lewis department stores and Waitrose supermarkets. The business is owned by its 90,000 employees who each receive a bonus payment linked to the amount of profit made. In 2015, each employee received a bonus worth 11% of their salary. John Lewis has continued to make impressive profits despite operating in a very competitive market and an economy that has only recently come out of recession. It's excellent reputation for customer service and quality products has given it a competitive advantage. The physical environment of the stores is an important attraction, with plenty of space and well designed layouts. John Lewis customers are generally wealthy and are happy to pay higher prices. The business has been quick to take advantage of the increased popularity of online shopping. Online sales rose by 19% between 2014 and 2015 and now account for 36% of total sales. Customers particularly like the 'click and collect online reservation service, enabling them to pick up their orders from their nearest John Lewis store. The business has invested heavily in new technology in order to improve the process customers experience when purchasing online. Extracts from John Lewis accounts 2015 and 2014 2015 (Em) 2014 (Em) Revenue 9,701 9,027 Cost of sales (6,427) (6,009) Gross Profit 3,274 3,018 Operating Profit 450.2 423.6 Profit for the year 143.5 101.6 However, profits made by Waitrose fell last year, despite increasing its revenue and market share. 13 new supermarkets and 20 convenience stores were opened and a loyalty card scheme was established. Due to increased competition Waitrose also had to reduce its prices for certain products.16.2 To what extent do you think that 'process' is the most important element of the John Lewis marketing mix? [16 marks]