UK's John Lewis looks to harness AI agent shopping in 'difficult economy'

By Sarah Young

LONDON, Sept 3 (Reuters) - John Lewis, Britain's largest employee-owned retailer, is stepping up investment in content creation as customers increasingly find products through AI agents, seeking to keep them engaged in what it called a "difficult economy".

The department store group said searches from AI agents had risen to 2.5% from just 0.3% a year ago, and the trend was accelerating.

"It's exponential, and it's all age groups," said Peter Ruis, managing director of John Lewis department stores. 

The group unveiled a new studio in its flagship Oxford Street store on Thursday where influencers can record content daily, generating the online buzz that AI taps into. 

It is also producing its own video content, starting with a regular mini-series starring celebrities. The retailer gave no financial details of its investments.

Ruis said British shoppers were being "very careful" about discretionary spend as they worry about inflation and higher interest rates. 

Asked about summer trading, he said while the economy was difficult, there had been bright spots such as booming sales of air conditioning units and garden furniture during successive heatwaves. 

British economic data over the summer showed surprising signs ​of strength, but economists have warned over the country's vulnerability to high inflation ‌stemming from the Iran war.

"It isn't an economy where you're going to splurge when you know you've got that inflation swirling around you," he told reporters.

The retailer will report half-year results on September 10. 

In August, the Financial Times said John Lewis had warned employees that the department store chain was facing "really tough" trading conditions.

Ruis said a lot of "key customers" in their 40s and 50s were worried about interest rates rising and whether their children at school and university would be able to get jobs in future.

Ruis is due to step down on September 6 and be replaced by Will Kernan, currently a non-executive board member.  

(Reporting by Sarah Young, Editing by Paul Sandle)