WH Smith benefits from expertise with international product mixes and global brand
Such is the highly localised nature of the product mix in WH Smiths stores around the world that it prefers to use partners in each country - and it has a large number of them compared with other international retailers. By Glynn Davis
Unlike when fashion brands venture overseas, largely supplying their own products to their stores (helped by the fact they are predominantly the same products) around the world, for WH Smith the products are mainly brought in from local suppliers and the ranges are also very different.
Speaking ahead of his participation in a panel discussion at the forthcoming Retail Bulletin International Expansion Conference in London, sponsored by GfK, on March 27th , Louis de Bourgoing (pictured), director of international business at WH Smith, says: “We don’t supply our own products and they are absolutely different products for each country. We’re therefore more comparable with a supermarket than a fashion chain.”
He cites the ‘press’ as being very different, and also books, which will be in different languages and where each country will likely have its own supply chains in place for delivering such product.
“This is the beauty of the trade and that’s why it’s wise to have local partners...and there are many different partners for us,” says de Bourgoing. The majority of WH Smith stores are either part of 50:50 joint-ventures with partners or operate as fully franchised outlets.
The company does also have some directly owned stores in certain countries. A recent direct entry into a new market was in Australia last November where the company won tenders to operate company-owned stores in airports including Melbourne International and Sydney.
The decision of which way to enter a new market is based on two key factors: whether there are any regulations in a market - that preclude the company from both entering directly and in a joint-venture arrangement; and what is the potential size of the market.
“If it is a small country with potential for only three, four or five stores then it is best to join with a local retailer. A joint-venture would also be best when a partner is needed for its local knowledge, supply chain, and also when we want to take some risk and maximise profits. And it shows the partner that we can trust them,” explains de Bourgoing.
What also adds to the number of partners it works with is its two-pronged strategy, which involves opening in both travel locations such as airports and train stations and also commercial centres such as shopping centres.
In the Middle East WH Smith operates in both types of store location and has a franchise partner because de Bourgoing says it is “not easy going it alone” in the region.
He confirms that travel is the main priority for international expansion at WH Smith: “It is helped by traffic growth and there’s a big awareness around the world of the WH Smith brand. Travellers know our brand and we are one of the main names in travel sites. The airport operators and landlords like that. “
Having 200 years of history in travel retail certainly gives the company a great “USP” says de Bourgoing, which has helped the international business become an increasingly important part of the mix at WH Smith. There is also the benefit of leveraging some of the product expertise in the home market into the group’s overseas operations.
“I’d say international is becoming an important part of the company. It’s a good way to use our know-how and when we experiment with products and own label goods in the UK (within both travel and high street sites) this can be used internationally,” says de Bourgoing.
For the full programme and registration, click here.
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