WH Smith has traditionally occupied an emotional space alongside the Sunday roast and dressing gowns in the British psyche - while traditional and comforting, it is unlikely to rouse much excitement.
But, alongside the HMV music store chain, the retailer has now begun what is, in effect, a high street revolution. It is enabling shoppers to burn their own CDs with PC applications ranging from basic educational packages and games such Tomb Raider 2, to high-value development tools such as those produced by Inprise/Borland.
HMV has introduced a similar burning system into its London Oxford Street branch, while WH Smith has installed it in seven major stores so far, although it plans to roll out the device in its other 529 shops by the end of next year. But while the idea is innovative, is there a market for it?
Simone De Bruin, a senior analyst of software partnering and alliances at IDC, says: "The only question I would have is that I'm not really sure what audience it's reaching. But it might be a good new channel."
Matthew Cherry, WH Smith's merchandise manager of music and multimedia, explained that the company started discussing the idea with Tribeka, which built the CD burning system, about 18 months ago. "As soon as the concept was presented, we saw what the benefits were for our customers. They could, in theory, chose from any product that's available in the marketplace and have it ready for them within six to 12 minutes," he said.
The iMac makes its mark in middle England
But the retailer is not only offering PC software but also Apple Mac packages, which have traditionally been more difficult to get hold of. Such a range could be a lucrative one as the iMac rapidly becomes middle England's computer of choice.
Cherry said: "We have a lot of Mac software, which has come across as really positive for our customers because no-one really supports the Mac format in terms of product."
But consumer benefits appear to be mainly centred around choice rather than pricing. The software costs roughly the same as users would pay elsewhere, although introductory offers are providing some discounts. As far as cost is concerned, the real economies are being made by WH Smith itself.
Daniel Doll-Steinberg, Tribeka's chief executive, explains: "We eliminate many of the costs associated with software distribution such as manufacturing lots of products and not knowing what to do with them; trying to gauge demand; the actually physical distribution of getting there; damage while it's being physically distributed; the shelf space requirements of the retailer; theft; the cost of the damage done to shelf-space products; and all the returns at the end of the cycle."
Tribeka is also widening its net in continental Europe, having just done a deal with FNAC, a major software retailer in France.
Cleaning up on the top lines
So the benefits of such a system to retailers are clear. But where they could really clean up is in top-of the-range product lines. The rationale behind this is that if products are normally returned to the vendor unsold, it is generally not because they do not sell at all, but because they do not sell well enough.
According to Doll-Steinberg, the Tribeka system circumvents this problem, however. "We have a lot of Borland products on our system at around £50 which would be much too slow selling for WH Smith. But when the system is marketed properly, they are going to be cash cows for Smith's. The value of the item is £500 and that is the equivalent to 15 Playstation products. If they sold one a week, the system is halfway to breaking even," he claimed.
But what effects is such a system likely to have on software vendors, and does its introduction imply that consumers are becoming more sophisticated?
Simon Moores, an analyst at The Research Group, argues: "There is a divide in the market. On one side, we have the emergence of the ASP [application service provider] model, where the big vendors are looking for opportunities to expand their volume by licensing their software."
"On the other side, you've got consumers who are far more canny and aware of business software. You see these titles in PC World and Dixons, and I think we are moving increasingly to a burn and play environment where you can have any book, that piece of software, that piece of music," he added.
Moores also believes that in the not too distant future companies such as Sky TV will become ASPs and begin serving applications to consumers through the digital boxes on their TVs. As a result, he foresees that the CD burn system may simply be a transitional sales channel that could soon disappear under the onslaught of high-speed internet access and greater bandwidth.
But Doll-Steinberg raises one important issue in defence of the system. "Eventually direct download is going to become a powerful force, but that won't happen until towards the second half of this decade. And I think retailers will compete very well because consumers do like physical product. Some 70 per cent of entertainment products are sold over Christmas. When you download a software product for your child for Christmas, it's not very romantic. You want to give them a physical product," he said.
So it seems that for high-street retailers faced with the power and reach of the internet, there really is a Father Christmas after all.
Smells like teen spirit
But Neil Spencer-Jones, managing consultant at NCCL Services, is unsure whether the system takes account of consumer psychology. "I can see them going into Smith's to buy Tomb Raider and getting it cut while they're there. But that assumes there is no fashion element - having the original Eidos CD in the original pukka box. Teen fashions may be such that you have to have the original," he said.
He also believes that for the system to have an effect on traditional software retailers such as PC World or Dixons, consumer shopping habits will have to change.
"I think it's very rare that a consumer goes into the High Street, and particularly WH Smith, and buys software on impulse. They might buy it on impulse if they go into PC World to buy a new printer and buy a new FIFA game while they're in there. I can't see someone going in to buy Tomb Raider or whatever it is and deciding they'll have some Borland software as well," he says.
As a result, it is clear that retailers using this system can make savings. But questions still remain as to whether the system will fit with existing consumer shopping habits and whether it can match the increasing ease with which users can download their software from the internet.
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