“I led WHSmith Direct through the most significant period of business change in its history, delivering step change improvement in sales and profit performance”
In April 2003, I was engaged to lead WHSmith Direct through this period of significant business change and opportunity. This would allow the main board director responsible for the business to focus on issues of strategic direction and on his other responsibilities within the wider WHSmith Group.
Below are set out some of the notable achievements during this assignment.
Developed and Agreed a Multi-Channel Strategy
With a strong heritage as a privately run start-up dot.com, the internet bookshop had been ring-fenced by WHS for several years after acquisition, and little effort made at integration with the rest of the business. The result of this was a customer proposition that had very little consistency between the online channel and the high street stores.
With the business operating in one of the most fiercely competitive online environments (books, CDS, DVDs etc), competing solely on price was not a feasible option. Our point of difference versus the major competition was the network of over 500 stores, and we therefore developed a strategy that focused on tight integration of the consumer proposition across multiple channels.
Some of the major components of this strategy were implemented during this assignment, and these are described below.
In order to implement the strategy efficiently and effectively, we developed alongside it, a detailed approach to planning and monitoring – our own programme management methodology – simple and pragmatic, yet very effective.
Redesigned and Re-launched Web Site
The WHS web site was tired and dull by comparison with the competition, built on leading edge technology of its time, but lacking in investment since its launch 3 years earlier. Customers found it difficult to navigate, lacking in product information and imagery, and without inspiration or excitement. In addition, it didn’t really have the look and feel of the WHSmith brand.
One of our first initiatives was therefore to give the site a facelift, focusing on:
- Removing the clutter – keeping visible only what you’re likely to want to see, not everything you could ever think of
- Introducing more images – both promotional point of sale and specific product images
- Enhancing the navigation – extending the department hierarchy across the full product range and making it navigable from the main pages
- Making the look and feel consistent with a high street experience with WHSmith
- Amending the technical construction of the site to allow greater business-user control over the navigation construction and the look and feel.
The project management, creative design and image creation, and technical development were all carried out internally by our own teams, and the project delivered to planned timescales. The result was an immediate uplift in conversion rate of visits to orders of over 30%.
Refocused Brands and Channels
The original bookshop.co.uk web site, operated under the “Internet Bookshop” brand had continued to operate under WHSmith ownership, alongside the whsmith.co.uk site. Both sites used similar (but different) technology and required not insignificant content management to keep it running, despite selling exactly the same range of products at the same prices.
This dual-facia approach was confusing for customers, and a distraction for the business. We therefore made the decision to close it, communicating with customers and redirecing them to the core WHSmith site.
We also refocused our selling channels – web-based sales being the focus for remote selling, with telephone support and small catalogue enticers. Interactive TV services were closed down, and consideration of new channels (e.g. WAP) parked.
Restructured Internet Service Provider (ISP) Business
An ISP service was launched in 2000, whsmithnet, with discs distributed through high street stores. The service was branded as WHS, although it was operated entirely by Affinity Internet.
Just prior to this assignment, an Administrator was appointed to Affinity, and crisis hit as WHS was faced with the likely immediate closure of the service. This would lead to customers losing their internet connection and their email accounts.
Much time at the start of this assignment was spent negotiating with Affinity to continue the service in order to protect the continuity of the service to customers.
Our efforts culminated with the commercial disposal of the whsmithnet service to a new business under a different brand, and the promotion of Tiscali’s ISP service in WHSmith stores.
Aligned Product Range and Pricing with High Street Stores
A high street WHSmith store stocks tens of thousands of products, yet the WHSmith direct catalogue contains nearly 2 million products, most bought-in to order. There was no integration of product files or prices of products between the core store chain and the online business, and no consistency of promotions. The result was confusion for customers, complaints about price differences, and inability to promote the online business on any product advertising by the high street chain.
We therefore made the significant decision to align pricing across all channels, and to run the same promotions online as in high street stores. The potential fear that what, for many products, amounted to a price increase online, would impact sales, did not materialise in trials, and the changes were implemented successfully, having an immediate positive impact on gross margins.
Launched Free Delivery to Store
At the start of the assignment WHS was running free delivery to home on orders over £39, to compete with Amazon. This offer was profit dilutive, and no better than the competition.
We therefore launched a major change to our postage and packaging proposition, offering either flat rate £2.99 delivery to home, or free delivery to a WHSmith store, regardless of transaction size.
In order to achieve this, a major new supply chain operation needed to be created, with a significant proportion of the warehouse being converted to a cross-dock operation from a pick and pack operation.
The changes were extremely well received by customers and profit enhancing.
Launched In-store Ordering of Full Product Range
If a product wasn’t stocked by a high street store, the store staff could order it for a customer – using a paper catalogue for entertainment products and a computer screen attached to the book wholesaler. The service wasn’t great, and lead times were long.
We implemented a new system integrated to the online web systems, whereby any online product could also be ordered by a store and despatched to that store through the WHS Direct supply chain – much more effective and much more efficient.
We trialled this in 6 stores and rolled it out to over 100 during the assignment – a great step towards true multi-channel retailing.
Implemented New Supply Chain – Delivery Direct From Suppliers
All customer orders had historically been fulfilled from the Oxford warehouse, dedicated to the online business. Product was either stocked in the warehouse or bought-in from suppliers and then packaged and dispatched.
To increase our capacity to handle the significantly growing order volumes, and to reduce lead times from customer order to delivery, we introduced a new order management system and processes which routes orders to suppliers for them to fulfil direct to customers, using WHSmith stationery and packaging.
This allowed a significant reduction in lead time on a large proportion of orders, and will have a major impact on customer service.
Generated New Traffic From Search Engines
A very small proportion of traffic arrived at the WHSmith site from search engines, primarily as a result of poor search engine rankings, a common issue with dynamically generated ecommerce sites.
In order to improve this situation, we changed the construction of the site to dynamically generate content-relevant page titles and meta tags, and to ensure that search engine spiders could crawl all product and department pages.
These changes, together with a programme of selective sponsored links, resulted in a 4-fold increase in search engine traffic.
Tightened Controls and Improved System Robustness
Security, performance and reliability are significant issues for online retailers, and its rare for this area not to require attention.
During the assignment we implemented a database upgrade of SQLServer, a new payment authorisation and settlement system, a new wireless link to the internet, a significant expansion of our web hosting infrastructure, a completely new scalable order management infrastructure based on microsoft’s .NET technologies, and numerous smaller enhancements to the systems.
Improved Trading and Performance Management Processes
Real focus was given to understanding the underlying business drivers of financial performance, and developing measurement and reporting tools to make them visible.
For the first time, the business started tracking the correlation between visitor numbers, order numbers, items per order and price per item, rather than merely sales orders and values.
This helped us to understand where the greatest performance improvement could be achieved – in conversion of visitors to orders.
Commenced a Cultural Change Programme
Last, but certainly not least, was the significant changes to the way of working in the online business. Coming from a privately run dot.com to part of a large quoted PLC had been a difficult transition for many in the business, but lack of integration had been accepted and expected.
Greater integration with the rest of the business would naturally be treated with suspicion, and a major programme of communication and organisational changes were necessary to support the “task” changes being implemented.
Regular team “huddles” to improve communication across the business were introduced, good news bulletins and other initiatives introduced to re-instil a sense of pride and ambition back into the business.
Job satisfaction and motivation always improve when you’re part of a winning team, and it was therefore essential that the business initiatives that we implemented had measurable results.
Measurable results
So what were the measurable results? We obviously cannot share actual data outside of WHS for sensitivity reasons. However, the graphs below show how revenues increased during this 9 month assignment.
