Trends & Features

Is retail success down to providing a service or serving a need?

When Which? announced recently that WHSmith was Britain’s “worst store”, you would naturally expect considerable concern at the retailer’s top table and whilst the share price dropped around five per cent in the immediate aftermath of the report (it has since rebounded), there are few signs of financial worries at one of the nation’s longest serving shop fronts.

It’s been a tough few months for WHSmith’s PR department though, where it has been accused of profiteering by selling a tube of toothpaste for £7.99 at one of its hospital stores, has been forced to become more transparent with its VAT policy at airports, and faced heavy criticism for the aisles and aisles of sweets and chocolate around the checkout. However, one quick glance at the share price over any given period since the mid 90s shows that WHSmith is more than surviving the retail crunch – it is positively thriving.

As brands or as retailers, do we want to be loved, or do we want to be solvent and profitable?

In its populist heyday of the 1980s, a generation or two (myself included) would spend hours in WHSmith (Smiths to you and me) flicking through books, choosing stationery, playing computer games, testing out toys and choosing records, cassettes or CDs. It was a destination, a place we loved to go, despite its infamous grey/brown carpet, we would make a beeline for that cuboid logo as a place for escape from the weekly shop at a high street supermarket (back when they existed).

Those days are gone. Sure, some of the town-centre locations still offer great selections of travel books, or sports biographies or magazines that no other store will offer, but those stores are not the ones driving the revenue or the profit.

WHSmith’s financial success, and possibly its popularity bypass, is driven by its “Travel” stores. Often smaller units in airports, railways stations and hospitals, providing not what we want to buy but what we need to buy. At a price. Profit is not garnered by cutting edge customer service or an unbeatable shopping experience, but simply by meeting a demand.

In an airport, you want to buy a bottle of water for your flight? That will be £2.50 please. You want a little sweet treat to get you through take off and compensate for rubbery pasta and a frozen bread roll? Well how about a kilogram pack of teethrotters for six pounds, although if you buy two for a tenner, it feels better value. Unexpectedly staying overnight in a hospital? Forgotten your toothpaste? Best get your credit card out.

Is retail success about providing a service or serving a need?

WHSmith are an anomaly in modern retail in that they are succeeding despite consumer opinion and despite the customer experience rather than because of it.

As the great British public, we use WHSmith because we have to, because of its virtual monopoly in certain locations (airports, train stations and hospitals), rather than because we want to.

But isn’t this a bleak and cynical outlook? Who wants to succeed because you’re the only option? Sure, based on the WHSmith experience it’s good for shareholders, but where’s the joy in that?

Who wants to be the brand that people need rather than the brand that people want?

How about the big brands who strive for more than this? BMW? Lego? Apple?

One of the most valued measures that all of these brand use is the “Net Promoter Score”. Simply asking consumers how likely (out of ten) they were to recommend a business and counting those who scored nine or ten out of ten and subtracting those who scored less than six. This is a drastically simple consumer survey needing only one question. Word of mouth has forever been the most powerful tool in advertising, and now with social media we all have the ability to reach more ears (or eyes) than ever before.

One key aspect of the Net Promoter Index is that it’s not equivalent to customer satisfaction ratings. In those annoying surveys that pop up on our screens or through our letterboxes, as consumers unless something is particularly bad, we are generally positive about our shopping (or other) experience. Research across multiple industries shows that the correlation between satisfaction and business growth is almost non-existent, certainly in comparison to our nine-or-ten-outof- ten advocates.

By giving consumers reason to love your business, you can inspire them to tell their family, friends and acquaintances that they should try you too.

We need to offer something that no one else can for our businesses to be respected, enjoyed, loved – and profitable.

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