WH Smith has just been voted the worst high street brand in Which?’s annual retail report… for the eighth year in a row. Time to worry?
Yet in the last four years its trading margin has increased from 10.3% to 12.8%, sales have grown 1% and trading profit has increased 6.7% per annum - with the most recent quarterly figures showing a continued buoyant performance for the group. So what’s going on?
It depends whether you care about financial results today or financial results tomorrow– because while WH Smith’s financial results are currently good, customer satisfaction is the one reliable measure of future financial success.
I have a soft spot for WH Smith. When I was a geeky teenager I had to spend my pocket money somewhere and the rest of the high street was too intimidating. (I’d get ignored in HMV and didn’t we all get stared at in Woolies in case we were shoplifters?). Under WH Smith’s one roof, I could buy a train magazine, a new book and the latest must-have vinyl – while mum picked up the Radio Times. The place had a solid vision: a weekend’s worth of distractions in a safe and reliable environment.
Yet one branch I visited recently had no member of staff in sight – just an old-fashioned bell on the counter with a hand-scrawled sign telling me to ‘ring for attention’. How did it come to this?
The high street has been challenged, but WH Smith’s niche has been especially challenged by everyone else selling what it sells, while the bright, imaginative chain food outlets take the lunchtime spending money.
WH Smith has responded not with one unifying vision for the whole business, but with three disconnected ones: an investor vision, a brand vision and a customer vision.
The investor vision - slashing costs - can be robust and reliable in the short term. That said, it was also the strategy employed by Toys R Us, Maplin and BHS, amongst others.
The brand vision is blurred: stuff as much in the store as possible and hope someone will buy it.
Is there a customer vision? At best, it’s probably based on distress purchases: I’m on my way to a kids party, so I need a gift voucher (or, I’m in hospital and I need a tube of toothpaste, even if it costs £7.99).
This leaves the staff demotivated by the lack of investment in their environment; being told to tidy up overstocked shelves that have been torn apart by a parent in a hurry, and having to deal with frustrated shoppers. Very few people go to work in the morning hoping to do a bad job and disappoint their customers.
Compare that with Lush, voted top in the Which? report. It has a clear vision and a clear story, clearly expressed: ‘cosmetics should be fresh, fun, and ethically produced, that’s why all our products are handmade so we know exactly what goes into them’. Where would your teenage son or daughter rather shop? And where would they prefer to work on a Saturday?
Like all great unifying visions, Lush’s makes every decision in the company easier: what products do we stock, how do we test them, who do we hire, how do we price, what’s our in-store experience, what’s our social media about?
Staff understand who they’re working for and what’s going to add value for Lush’s customers.
But more than that, having a strong unifying vision also allows a brand to engage with its customers (and the press), even outside of the moment of purchase.
So is it too late for WH Smith? No. But it needs to align the whole organisation with one consistent vision, tell one story and speak with one voice.
What made WH Smith appealing 30 years ago could be what makes it appealing today. A safe and reliable place to shop, with carefully curated selections, offering the promise of distraction and entertainment.
This vision would direct product choices, frame staff training and direct store fit. And ultimately it would delight investors for the long term too. After all, I will pay an extra 10p in the pound for a distress purchase, but I’ll pay extra 30p for a delightful experience.
Chris West is founder of Verbal Identity