John Lewis warned not to withhold stock after ‘price match’ watch row

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John Lewis has received a slap on the wrist from the Advertising Standards Agency for promoting discounted Apple watches online, only to remove them from its website until the next day when the product was marked up to full price.  

An offer on its website back in November advertised an Apple Watch at £249 as part of a price match deal coinciding with Black Friday.

But ASA received a complaint from a customer, who found the Apple Watch was listed as out of stock when she attempted to buy it at the price match price, but that it was available the following day at full price, challenged whether the promotion had been administered fairly.

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John Lewis said the offer was not a planned promotion but a reactive price match based on competitor activity which had resulted in an unprecedented increase in sales.

The retailer supplied spreadsheet information which showed its total stockholding (which included availability in its central distribution network, online and in stores) before, during and after the price match.

In terms of online availability specifically, it argued that its systems did not give it accurate by-the-minute stock information, but it would know the number of products it held at the start of the day.

It would then see the rate of sales as orders came in and, in this case, made a decision to remove the product from sale on its website as it was unsure whether it had enough stock to fulfil demand on that day.

It said product returned back to full price the following day because the competitor’s promotion had ended and appeared as ‘out of stock’ on their website until it was made available online again on Tuesday 29 November.

John Lewis agreed that the online availability of the item was perhaps removed earlier than it could have been, but said the decision was made in good faith in the context of significant sales uplifts on Black Friday (25 November 2016), which was now its busiest day of the year.

However, the watchdog upheld the complaint, noting that the term ‘price match’ as used on the home page of www.johnlewis.com, in relation to matching a competitor’s promotion.

Because in this context the price match was linked to a time-limited promotion, ASA considered that the promotional marketing rules applied.

ASA considered that the rate at which a product sold was likely to increase when the price was lowered temporarily, and that there would therefore be an increased risk that it would sell out.

“We acknowledged that the offer arose from John Lewis’ Price Match policy rather than a price promotion they had planned. However, while we acknowledged the surrounding circumstances, we considered John Lewis’ action to make a product unavailable on their website while their competitor’s promotion was still running denied online consumers the opportunity to purchase at the Price Match price, despite John Lewis still having stock available,” it stated.

As a result, it concluded that John Lewis had breached the CAP Code, which states that promoters must conduct their promotions equitably, promptly and efficiently, and avoid causing unnecessary disappointment.

John Lewis has been warned that the ad must not appear again in its current form. It has also been told by ASA that it must ensure it deals fairly with consumers in future, including not withholding availability of promotional stock.

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