Report on WH Smith's Retail Environment: Offline and Online Strategies

This report provides a comprehensive analysis of WH Smith's retail environment, comparing its online and offline strategies. It begins by examining the supply chains of both online and offline retail models, illustrating the distinct processes involved in order fulfillment and product distribution. The report then delves into the evaluation and comparison of the online and offline retail environments, highlighting the advantages and disadvantages of each. It also addresses social and behavioral practices, specifically focusing on the digital divide and its implications. Furthermore, the report explores traditional and digital marketing practices, innovation strategies, and how value is created in e-business through the application of the value chain. Finally, it offers recommendations based on the analysis, concluding with a summary of the key findings and insights into WH Smith's retail operations.

OFFLINE AND ONLINE
RETAIL ENVIRONMENT

TABLE OF CONTENTS
1. COMPARING OFFLINE AND ONLINE RETAIL ENVIRONMENT OF WH SMITH..........1
A) (i) Company to Consumer supply chain for online retail market......................................1
A) (ii) Company to Consumer Supply Chain for Offline Retail Market................................3
B) Evaluating and Comparing the online and offline retail environment..............................5
2. SOCIAL AND BEHAVIOURAL PRACTICES AND ISSUES: THE DIGITAL DIVIDE .....6
3. TRADITIONAL AND DIGITAL MARKETING PRACTICES AND ISSUES........................7
4. INNOVATION PRACTICES AND ISSUES .............................................................................8
5. HOW VALUE IS CREATED IN E-BUSINESS BY APPLYING VALUE CHAIN ................9
6. RECOMMENDATIONS ..........................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Retailing is the process of selling products or services to the end users directly in a open
market. The present retail environment is based on consumer's convenience. One of the most
innovative and convenient platform is provided by internet. In the modern world various
innovative technologies and practices have been evolved but internet remains to be the most
significant inventions of all times. The retail market of the world has gained a lot from it and has
undergone a drastic change (Brynjolfsson, Hu and Rahman, 2013). Internet is serving the
modern world's retail market by making it very convenient for the consumers and has enabled
the consumers to gain control over the movement of the market.
The present report is an attempt to analyze and compare the offline and online retail
environment of WH Smith plc. It is a retail chain of high street shops based in Britain and
operating on railway stations, airports, hospitals, motorway service stations and ports. The retail
chain is primarily selling books, magazines, newspaper and other entertainment products. The
report shall also compare the practices of traditional and modern market.
1. COMPARING OFFLINE AND ONLINE RETAIL ENVIRONMENT OF
WH SMITH
A) (i) Company to Consumer supply chain for online retail market
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Illustration 1: Online purchase flow chart
WH Smith has adopted the above illustrated supply chain, with a simplified and standardized
approach, which has further assisted the company in accelerating the supply chain and attaining
efficiency in working. The whole process of supply can be illustrated in the following manner:
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Placing an order for purchase of 16 GB pen
drive
Obtaining confirmation of the order
Making payment for the 16GB pen drive
purchased
Giving order to supplier of 16GB pen drive
Procurement of the good and final delivery of
pen drive

 Place an order: The process is initiated at the point when a customer places an order on
the official website of the company. The customer shall browse through all the products
available on WH smith website online and make a selection to be ordered. Followed by
the same the customer shall make a final selection and make his/her order (Weng, Lu and
Wei, 2016). Payment: After placing the order the customer shall opt for any one of the available
payment options i.e. either an instant payment would be made using credit/debit card or
the option of Cash on delivery (COD) is selected so as to give the payment at the time of
delivery. This payment is received by WH Smith through its website. Contact Supplier: One of the major issues in e-commerce business is maintenance of
inventory. WH Smith incur huge costs in warehousing the available inventory. Hence,
WH Smith has adopted a system of procuring the products from the suppliers as and
when the demand arises (Chang and Chin, 2011). After the customers place an order and
choose the suitable payment option, the company approaches the respective supplier for
inquiry and availability of the required product. In the event there is more than one
product ordered by the customer, the firm would be required to contact separate suppliers
for separate products. Procurement of required goods: Once the company enquirers about the availability of the
products with the respective suppliers, the next step is to procure different goods from
different suppliers as per the requirement of the buyers. This can also be termed as
Product sourcing. The company itself is not involved in printing of the products and
hence shall maintain or locate sources of various products available on the website. At
this stage, WH Smith procures products from the respective sources, to further the
process. Assembling: The products so ordered from various sources shall be then required to be
assembled at one place for packaging as required. As stated above, an individual
customer may order more than one product which would be procured from different
suppliers. Hence, the procurement shall be followed by assembling the products from
different sources and getting them ready to be delivered to the customers. However, there
may be instances when the customers receive products ordered at one time in a gap of
few days (Dholakia and et.al., 2010). For the purpose of assembling and receiving the
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procured products the company has opened consolidated centers. These centers receive
the products from suppliers and split them in accordance with the order received and
categorize them area wise for further delivery.
 Final Delivery to customer: The last stage of the chain is the delivery of the obtained
products to the end users. After the products are consolidated area wise and further
consolidation has also happened order wise, the products are dispatched for final delivery
from the centers of WH Smith. Thus, the consumer receive the products they ordered on
the official website of the company.
The above-mentioned stages constitute to be the fully functional supply chain of WH Smith
online retail market.
A) (ii) Company to Consumer Supply Chain for Offline Retail Market
Illustration 1: The Offline Supply Chain
The supply Chain of the offline retail market functions in a different manner, irrespective
of the fact that the components remain to be almost the same. The supply chain of WH Smith for
the offline market functions in the following manner: Manufacturer: The supply chain of the offline market begins with the manufacturing of
the product (Verhoef, Kannan and Inman, 2015). In respect to the supply chain of WH
Smith offline market it begins with the printing press or manufacturing unit of various
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products. There is a established range of manufacturers or publishers who shall remain
to be the indirect suppliers of the company at all times. Hence, at this stage the product
is developed by the manufacturers. Wholesaler/ Distributor: The wholesalers are the people or organizations who act as a
mediator between the manufacturer and the retail store. They procure products directly
from the manufacturers or publishers of WH Smith in large quantities and at lower
prices, to be supplied in the market. It is an intermediary entity in the supply chain. It is
often seen distributors and wholesalers are the channel partners of the supply chain. The
wholesalers and distributors may have products from a variety of manufacturers in
accordance to the demands of the market (Emrich and Verhoef, 2015). WH Smith
contacts the established wholesalers as and when the demand arises however, in the case
of daily newspaper or daily/weekly/monthly magazines the company has entered into an
agreement with such entities for a continuous supply of the same. Retailer/WH Smith Store: The next component in the supply chain is the retailer. With
respect to the company, the offline WH Smith store shall form the next component of
the supply chain of the company. The retailers procure products from the wholesalers or
distributors and maintain a range of products in the store. In respect to the daily or
monthly newspapers or magazines the store receive a regular delivery of the same, as
per the agreement and the company does not require to contact them each and every
time. However, in respect of other entertainment products the company need to contact
the manufactures and maintain the range of products. The offline retail store enables the
customers of WH Smith to visit the store and choose the desired product physically.
 Customers: Last in the supply chain comes the Customers, who are also the end users of
the products. The customers of the company are required to visit the physical store,
make a selection of the product and then finally purchase the same. The store maintains
a range of products as per the demands of the customers in the market. The customers of
the brand are generally people traveling by air, road or sea and hence the brand maintain
its stock accordingly.
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Customer purchase of 16GB
pen drive
Approaching suppliers
present in the market.

B) Evaluating and Comparing the online and offline retail environment
The modern revolution in the technological world has led to the invention of a whole new
world of digital market, which further led to the bifurcation of the retail market into online and
offline retail market (Fassnacht and Unterhuber, 2016). The two markets differ in the way they
function and in the way the consumers behave in each of the markets. Traditionally, the WH
Smith brand was present only in the offline retail market. With the changing times and a drastic
change in the demand of the market, the company has marked its presence successfully in the
digital world as well. One of the major benefits of this expansion is reduction of cost and
enhancement of the value proposition made to the customers. The traditional 'brick and mortar'
approach is the tried and tested one by the market and the players.
The online store of the company was easy to be installed in comparison to the physical
store. The advancing technologies have made the process even more easy and convenient for the
companies in the market. As against the offline stores are highly expensive to be installed and
consume a lot of time. One of the added bonus experienced by WH smith was that it was not
required to formulate any online marketing strategy and as it enhanced the sales by undertaking
the already existing market route. The brand is one of the known ones in the nation and hence at
the time of tapping the online market not much marketing was required. The offline market of
the company is primarily serving at the specific spots such as railway stations, ports etc., serving
the customers who are traveling and may require something to pass the time. It has been
observed that at such times you may instantly decide to buy a newspaper or magazine and buying
it online may always not be possible.
The online stores are safe from the acts of shop lifting, thefts or any other damage as
against the physical store (Zheng and Guo, 2016). The former maintains an online display of the
products which in no means can be taken by the customers without making the appropriate
payments. The same may not be true in offline stores as the products are physically displayed
and clever headed people my mange to flick any of the newspaper or any other product. WH
Smith has experienced a increased number of clientele as it also entered the digital market. The
online retail business is able to cater to a variety of customers and geographical distances and
boundaries were no more hurdle for the customers as well as the company in reaching each
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other. In addition, the online market is open at all times and hence there is no time limitation in
accessing the same. The customers can make purchase as per their time and from their own
place. Lastly, the offline store enables the customers to view and analyze the product after
physically checking and gaining the satisfaction of buying a known product, which is one of the
missing elements in the digital market (Shankar and et.al.,2016). The online market does not
provide for creation of personal bondage with the customer, which is one of the most important
benefit of the offline market.
2. SOCIAL AND BEHAVIOURAL PRACTICES AND ISSUES: THE
DIGITAL DIVIDE
The digital world is the 21st century's innovation, leading the children of the present
generation to grow with the idea of digital market and the whole world existing within it. This
new world has currently become quintessential for living a smooth and convenient life. The idea
of using and existence of internet is so known to the present generation that they automatically
learn how to use it and get acquainted to it at a very early stage of their lives. However, same is
not the case with the older people. There idea of living a comfortable and convenient life is
totally different from the younger generations. Learning internet and using it for routine task
poses great difficulties for them (Yap and et. al., 2010). Hence, arises the concept of Digital
Divide which has been created between the old and the young ones. For instance, a younger kid
would prefer to buy bread online and get it home delivered, however, an older person would
always prefer to visit a good store, check the bread to be bought and then, buy it physically.
WH Smith is running a retail business of newspaper, magazines etc. Accordingly, there
customer base is comprised of people from all generations and hence they have also experienced
the digital divide on the basis of different generation. The wide range of customers are being
served by the company through the medium of physical as well as online store. It has been
observed that the maximum people buying products online are people from the younger
generations. On the same lines, the customers of the offline store are comprised of maximum
older people. The older adults are not much interested in learning the new ways of living the life
through internet and do not even see the amount of benefit it carries with it. They are of the
belief that visiting the physical store is easier than browsing through the online store (Nenycz-
Thiel, Romaniuk and Dawes, 2016). This generation prefer to visit the store browse through
options physically, give some time and thinking to the option and then finally decide to buy the
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final choice. They feel that they have sufficiently open to the physical market and even have
great exposure to the society through this medium. They find visiting the physical store more
convenient than learning the whole concept of internet and the way of using the same. One
another prominent manner prevalent in the older generation is that they are more used to logical
thinking, reasoning and systematic processes of learning which may not be possible with the use
of technology (Walsh and et. al., 2010).
On the other hand the younger generation feel internet and technology is the way to live the
life. Their emotions, passions, desired, ideas business, research etc. are all internet oriented. The
first solution to every problem of the younger people is internet. Such people consider internet as
the functional necessity and not a modern form of convenience. WH Smith has observed that
younger generations do not want to give much time to a single thing and hence, end up making
fast choices which are available to them on the official website of the brand. This generation is
not very time specific in its ways and in this respect digital market best serves their interest by
being available and open at all times (Landers and et. al., 2015). Hence the company has
experienced a great digital divide among the wide range of customers it is serving, and it is
primarily because of the difference in ideologies of the younger and the older generations.
3. TRADITIONAL AND DIGITAL MARKETING PRACTICES AND
ISSUES
Every business organization aims to grow and develop, and the same is done with the
help of advertising or promoting the brand name. There are various traditional marketing
methods which have done wonders for many business units, however, the same have been
replaced by the modern methods of marketing which includes digital marketing (Shankar and et.
al., 2010).
The Traditional marketing methods which were employed by WH Smith were advertising
through newspapers, magazines, radio etc. For instance newspaper was considered to be one of
the most popular options for marketing as each and every household would receive newspapers.
Newspapers was the only source of news and information about the rest of the world and hence,
was read by everyone. It has long served its role successfully but with the changing times and
development of various marketing practices, people have started seeing many issues related to
this type of marketing. One of the major issues observed was that this way of marketing is not
interactive in nature and the companies are not able to know the reaction of the public at large,
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instantly in a instant manner (Keijzer, 2015). However, many business unit are still using these
traditional methods, others have completely adopted the new and modern form of marketing
methods. These methods are very innovative in nature and have been successfully attracting new
businesses and customers. The major issue of the traditional marketing is also best addressed by
the modern form of marketing i.e. Digital marketing.
Various methods of marketing are available on this platform, out of which Social media is
one of the most popular one (Riquelme, Román and Iacobucci, 2016). The biggest of all the
advantages of this method of marketing is reduced cost of marketing and minimum deployment
of resources for the same. It brings to the firm real time results in a very instant fashion, which
enables the companies to into consideration all the negative reviews and work on the same.
However, this area of marketing is also not aloof of problems and issues. One of the major issue
faced while undertaking this method of marketing is that of data privacy and security.
Companies have faced this issue and have faced great loss in their business due to leakage or loss
of data. The fast moving world of digital marketing is not saved by this critical issue, even
though many techniques have been developed for securing the data.
4. INNOVATION PRACTICES AND ISSUES
The present market has become very competitive in nature and hence requires regular
innovative practices from the business units. In order to gain a competitive edge in the market,
every organization attempts to create new ideas and innovate practices to attract maximum
possible customers. For instance, the exceptional user experience provided by the company
Apple became the basis of its huge success all over the world. Similarly, many other companies
of the world like Amazon have introduced innovative and creative practices, which enabled them
to lead the way in their respective markets (Melis and et. al., 2015). In pursuance to the same
WH Smith has also adopted various innovative ideas and services in the past which has led to
great profits for the company. With the motive to understand about the concept of innovation in
better manner theory of innovation is quite effective where takes into consideration various
stages such as innovator, early adopters, early majority etc. Innovator is the first stage where
small group of individuals explores idea where in online marketing different blogs and media
sites are present. WH smith has adopted the concept of innovation through development of its
online platform with the help of which customers can easily purchase products, Early adopters is
another stage where large number of individuals preferred to access website of WH Smith which
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