What next for WHSmith
Having sailed through Christmas on the back of the Ladybird spoof books (last year was the colour book craze). Link. The challenge for this retailer now is that they are operating in a world of impulse purchases. This clearly works in the travel sector, as this is the over riding mindset for consumers in that space, and the landlords are clever in the way they curate retailers to avoid serious competition.
Where is gets more interesting is in the other 500 of their stores which are based on the high street. When shoppers are looking for either one-stop shops (grocers) or “leisure shopping” spending time browsing and drinking lattes (see John Lewis as a prime example of this executed well). Why would you visit a WHSmith on your hight street? I get my paper when I buy my lunch at the local Waitrose (along with a free coffee), my books are downloaded to my kindle. OK I wouldn't download a spoof ladybird book to my device (or a colouring book for that reason) — so maybe thats their niche, physical gift books……I’m not sure a long term business model is built on that premise.
The travel sector is also going through an interesting period of change — post Brexit UK shoppers may feel that “staycations” are better, and cheaper and safer. Rail commuters are having a torrid time with strikes, and for them a free paper is normally just a short stroll away. Overall consumer confidence looks like its tipped over the top and is starting to decline — first to be impacted? Impulse purchases.
This year they have a 225th birthday to celebrate……..my experience is that todays shoppers are not that nostalgic, unless you can make it relevant by redoubling on your initial purpose (which was selling newspapers at train stations) — the worry is that the delivery of news has pivoted beyond recognition with 24 hour minute by minute updates, TV channels galore, push notifications.
So the future for WHSmith? Ride the maelstrom? Pivot? Vertically integrate (again?). In a world thats rapidly moving, it feels like WHSmith is stuck in the 90’s, and likely to get further behind the retail curve by the year. The good news is that there is still time to change.