Why WHSmith is still on the fast track to long-term success, while the rest of the high street is left at the station..
Introduction
In the rapidly evolving retail landscape, where the digital juggernaut seems to steamroll everything in its path, one British institution stands defiant. WHSmith, with its storied history dating back to 1792, is an enigma in the face of the retail apocalypse. In an age where brick-and-mortar stores buckle under the pressure of online giants, WHSmith’s story is not just about survival; it’s a masterclass in strategic evolution.
Background
Tracing its roots back to the late 18th century, WHSmith began as a humble newsstand. Today, it’s a dual-faceted retail giant. On one hand, there’s the High Street segment, an ode to traditional retail, offering a wide array of books, stationery, newspapers, and magazines. On the other, the Travel segment thrives in airports, train stations, and other travel hubs, catering to a dynamic, on-the-go consumer base. This dichotomy forms the crux of WHSmith’s resilience, but it begs the question: in an era where clicks trump foot traffic, what is WHSmith doing right?
Let’s Look at the Numbers
The financial health of a company is the truest litmus test of its strategy. WHSmith’s fiscal report of 2023 paints a picture of robust health in a seemingly ailing industry. Boasting a total revenue of £1.8 billion and a headline profit before tax of £143 million, the company stands strong. This is a marked increase on the 2021 figures which saw nearly £800m less in revenue. The diluted earnings per share are at an impressive 80.3p, with dividends per share reaching 28.9p. These figures speak volumes, but they’re not just a testament to financial acumen; they’re a narrative of savvy adaptation. Along with revenues, costs have increased as well and both can be attributed to the newest focus for the retailer. The Travel segment, a relatively newer foray, has emerged as the company’s powerhouse, overshadowing the traditional High Street segment. It’s a clear indicator of WHSmith’s ability to pivot and prosper.
Heavy investment in new stores, specifically around travel hubs such as airports, train stations and motorway service stations has cost the company a small fortune, but it has been a gamble that has paid off. Now boasting 1886 stores, WHSmith were able to open 126 new stores in 2023 only closing 13, showing a marked net increase in their store count and a continued investment in expansion. These new stores have primarily been in the aforementioned travel hubs and it is clear that this is the strategy for the company. Of the 1886 stores, 640 are overseas with half of them being in North America. WHSmith has no intention of slowing down and given their fundamental understanding of their competitive advantage and strategic agility, they are only getting started.
Where do they create value?
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In the digital era, innovation is the only constant. For WHSmith, the path forward is paved with technological advancements:
1. Geomarketing: The future of retail lies in understanding customer patterns. By leveraging data on customer locations and preferences, WHSmith can strategically plan its expansion and deliver tailored in-store experiences. Imagine the WHSmith app alerting a customer passing by about a new release in their favourite genre — that’s geomarketing in action.
2. IoT and Smart Inventory Management: Efficiency is key in modern retail. Implementing IoT for real-time inventory tracking and automated restocking can significantly enhance WHSmith’s operational efficacy. It’s not just about having the right stock; it’s about anticipating customer needs before they even step into the store.
3. Robotics and Automated Store Assistants: The retail floor is ripe for a robotic revolution. Automating routine tasks and customer interactions can streamline the shopping experience and free up human staff for complex customer service roles, thus enhancing overall efficiency and customer satisfaction.
So let’s imagine…
In an age where the once-vibrant high streets began to echo with the silence of abandonment, where storefronts that hummed with life stood shuttered, victims of the relentless surge of online commerce, WHSmith charted a different course. Amidst the slow decay of traditional retail, this venerable institution, steeped in the lore of British commerce, emerged not just resilient but visionary, redefining its identity in the face of an evolving world.
The Last Light on the High Street: In the dwindling high streets, WHSmith stood as a rare beacon, a reminder of a richer past. Yet, it did not linger in nostalgia. Instead, it embraced a bold strategy, pivoting towards the bustling travel hubs that had become the new crossroads of commerce and community. Airports, train stations, and bus terminals — these were the new high streets, teeming with life, and WHSmith claimed its place at their heart.
A Haven in Transit: In these travel centres, WHSmith transformed into more than a retail store; it became a haven of convenience and familiarity for the transient traveller. Where the hurried steps of commuters and the weary strides of long-haul travellers intersected, WHSmith offered a respite — a place to find not just a book or a magazine but a moment of peace in the chaos of travel.
As you approach one of these modern marvels, your mobile device, now an extension of your intuition, will gently nudge you with bespoke offers and suggestions, courtesy of WHSmith’s AI-driven app. The allure was irresistible — a tailored recommendation for a book echoing your recent musings, or a travel accessory you didn’t know you needed until that very moment. This digital concierge transformed each visit into a personalised odyssey, turning the mundane act of shopping into a delightful discovery.
Balancing Tradition and Innovation: As WHSmith ventured into these new territories, it carried with it a legacy of adaptation. It wove the convenience of digital technology into the fabric of its physical presence. The stores, equipped with AI and smart systems, offered personalised experiences, while still retaining the human touch that had long been the soul of WHSmith. Online shopping portals complemented their physical stores, providing a seamless shopping experience, whether one was miles up in the air or seated in a bustling train station.
The Evolution of the Workforce: This strategic shift brought a transformation for the WHSmith workforce as well. Employees, once the traditional purveyors of books and stationery, now became ambassadors of convenience and comfort in these travel hubs. They adapted to new roles that merged the art of retail with the efficiency of technology, ensuring that WHSmith was not just a store, but a part of the traveler’s journey.
A New Chapter in Retail: In this reimagined world, WHSmith wrote a new chapter in the story of retail. It stood as a symbol of resilience in an industry beleaguered by change. While other high street stores faded into memory, WHSmith reinvented itself as an indispensable part of the travel experience. In every airport lounge, in every railway station kiosk, WHSmith offered a promise — a promise of a world that still valued the touch of a book, the personal greeting of a store clerk, the convenience of a travel necessity grabbed on the go.
In this quiet revolution, WHSmith became more than a retail store; it became a part of the journey, a steadfast companion in a world constantly in motion. As the high streets whispered their final stories, WH Smith penned its own narrative, one of adaptation, innovation, and an unwavering commitment to meeting its customers wherever they might be.
Conclusion
In the grand tapestry of retail evolution, WHSmith emerges not as a relic of a bygone era, but as a dynamic protagonist in a narrative of adaptation and foresight. In the face of a shifting retail paradigm, where the digital realm has all but eclipsed traditional brick-and-mortar sanctuaries, this storied institution has deftly navigated the tides, charting a course that many might deem improbable in today’s e-commerce-dominated world.
WHSmith’s strategic pivot towards travel-centric retailing, coupled with a robust embrace of technological innovations, paints a picture of a company that is not only surviving but thriving. By integrating cutting-edge technologies like geomarketing, IoT, and robotics into its operations, WHSmith can do more than just keep pace with the times; it will set a new benchmark for what it means to be a retailer in the digital age.
As we look to the future, WHSmith’s journey offers invaluable lessons in resilience and innovation. In a world where the narrative of retail is constantly being rewritten, WHSmith stands as a beacon, illuminating a path forward for others in the industry. It’s a story that continues to evolve, a story of a company boldly stepping into the future while keeping one foot firmly rooted in its rich heritage. In this ever-changing retail landscape, WHSmith is not just a survivor; it’s a trailblazer.
