Building a whole business on trust: How John Lewis builds trust in every aspect of what they do from their business model to their advertising
Author: Alex Zarifis
John Lewis is a large retailer in the UK with 48 large stores and a strong online presence from as early as 2000. In this case study we look at how the business model, advertising build trust and create a reciprocity from customers and the government.
Business model and employees
John Lewis is a cooperative owned by its employees. This is quite rare for a company of this size. This structure was set up by the son of the founder of John Lewis. He wanted to ensure that the management did not take advantage of the employees and that they were accountable to the employees. Based on this arrangement employees get dividends at the end of the year based on the profits. Therefore, the model ensures trust within the organization as everyone has a say in the decision making and their share of the profits. The person the customer comes into contact within the store will, either in one or several interactions, convey this positive trustworthy culture.
Advertising: ‘Tell me the story of trust’
John Lewis Christmas adverts are very popular in the UK and have become an important part of the country’s festive traditions. Many people feel the Christmas holidays start when they see the festive John Lewis advert. Many people want to see if it will move them to tears this year.
What was the idea behind these adverts and why are they so impactful? The CEO of John Lewis at the time, Andy Street, said that the brief he gave was ‘tell the story of trust’ (Street, 2020). He wanted them to do this because he felt the trust between John Lewis and its customers was the core of the company and hard for the competitor to match. Building trust has been proven to strengthen the relationship between retailers and consumers in several context (Zarifis et al, 2019; 2020).
Reciprocity: Trust building from the customers and government
Having trust at the core of an organization does not just mean it sends positive trust building signals like a bright sun. These signals and trust building are also bounced back creating a virtuous cycle. Consumers directly support John Lewis and they also encourage their government both local and central to do the same. An example is that the Sheffield Council bought the lease on the building housing John Lewis in the town for 3 million in order to ensure it stays in their city (Jahshan, 2020).
Fig. 1: The virtuous people focused trust building cycle of John Lewis
This can be described as a people centric trust, as opposed to a system centric trust. A people centric trust, where your employees build trust is harder to achieve compared to a system centric trust but often also harder to replicate, as the case of John Lewis shows. Therefore, John Lewis is an interesting contrast to many organizations that want to have the trust embedded in the system, with features like reviews and guarantees, so that the staff are less important, lower paid and de-skilled. As most of us are both workers and customers and we are interdependent, let’s hope more companies follow the example of John Lewis.
References
Jahshan E. (2020) ‘John Lewis to overhaul Sheffield store after signing new lease’, Retail Gazette. Available from: https://www.retailgazette.co.uk/blog/2020/08/john-lewis-sheffield-new-lease-refurbish-renovate/
Street A. (2020) ‘Inside John Lewis: Trouble at the Tills’ Channel Four.
Zarifis A., Cheng X. & Kroenung J. (2019). Collaborative consumption for low and high trust requiring business models: From fare sharing to supporting the elderly and disabled, International Journal of Electronic Business, vol.15, no.1, pp.1-20. Available from (open access): https://www.inderscienceonline.com/doi/abs/10.1504/IJEB.2019.099059
Zarifis A., Kawalek P. & Azadegan A. (2020). ‘Evaluating if Trust and Personal Information Privacy Concerns are Barriers to Using Health Insurance that Explicitly Utilizes AI’, Journal of Internet Commerce, pp.1-19, Available from (open access): https://doi.org/10.1080/15332861.2020.1832817
Recommended citation:
Zarifis A. (2020) ‘Building a whole business on trust: How John Lewis builds trust in every aspect of what they do from their business model to their advertising’, TrustUpdate.com, pp.1-2, Available from: https://www.trustupdate.com/case-studies/