
Barnes and Noble is dying, Waterstones in the U.K. is thriving. Why? - jseliger
http://www.slate.com/articles/business/moneybox/2015/12/barnes_noble_is_dying_waterstones_in_the_u_k_is_thriving.single.html
======
Someone1234
TL;DR: Slash costs (i.e. fire tons of people, discontinue unprofitable stock)
and target stores better for their demographics.

I've spent a lot of time in both B&N and Waterstones. B&N has a lot of
problems Waterstones never had even ahead of bankruptcy:

\- The stores are too big. 1/2 of a B&N store is tat, reference books, niche
stock, a Nook display area, and other nonsense. You could cut almost all B&N
stores in half and not notice as a customer.

\- They place them poorly. B&N is perfect for foot traffic. But B&Ns are
typically located as drive-up "out of town" shopping. Somewhere you need to go
to intentionally. They need to be in malls.

\- No good Nook tie-in for the stores. My SO often goes into B&N and looks at
books, and then says "I'll buy it on my Nook later." They should have made an
agreement with the publishers YEARS ago: When you buy a physical book, you get
the Nook book included.

\- The children's area is really nice, but poorly leveraged. No classes, no
reading groups, no reason to come in. Stay at home parents WANT a reason to
get out of the house, you offer a free reading group for small kids, the
parents will buy the books after the group.

\- Atmosphere in the coffee shop is bad. Waterstones feels like a nice little
swanky coffee shop, somewhere you'd go and work on your novel, B&N's coffee
shop feels like a generic coffee shop at the airport.

\- B&Ns has no brand, and keeps making it worse. 3D printers, toys, Nooks,
what is it that B&Ns is? They're all over the place, and now when you go into
a B&N store you'll never know what they'll be pushing this week.

I think B&N will go under. I just don't think the management is very good, and
every attempt they make to right the ship makes it worse. The whole business
needs to be restructured.

~~~
alistairSH
B&N's coffee shop _is_ a generic coffee shop. At my (now closed) local B&N, it
was a Starbucks. With very little seating. And too loud pop music. It was not
a place somebody would ever go to sit and read a chapter of the latest novel.

~~~
thoth
>At my (now closed) local B&N, it was a Starbucks.

It was probably a Branded Solutions Food Service store
([http://www.starbucks.com/business](http://www.starbucks.com/business) the
Food Service option, not a Licensed Store or Starbuck Office Coffee delivery
service) that served Starbucks brands from the "We Proudly Serve Starbucks
Coffee" portfolio.

Or it may have been a real store (licensed); I can't say for certain.

The B&N I live near also has a "Starbucks" inside it, except it is actually
one of the food service branded stores on closer inspection. It doesn't take
the Starbucks app or giftcards, small signs with the prominent mermaid logo
have the smaller "We Proudly Serve" print instead of "Starbucks", etc.

I think the Starbucks that are inside Target stores are also these sorts of
arrangements.

~~~
bluedino
>>I think the Starbucks that are inside Target stores are also these sorts of
arrangements.

Target stores have an actual 'licensed Starbucks store' where you can pay with
the Starbucks app or giftcard.

------
Doctor_Fegg
Insightful, and chimes absolutely with my experience.

I live near Oxford, UK, where we have the peerless Blackwells, an academic-
biased but broad-based bookshop
([http://bookshop.blackwell.co.uk/stores/oxford-
bookshop/about...](http://bookshop.blackwell.co.uk/stores/oxford-
bookshop/about-us/)) where you can literally get lost for an afternoon. I
would typically walk straight past Waterstones on the way there.

Now, since the Daunt era began, I spend almost as much time in Waterstones as
I do in Blackwells. Waterstones is where I go if I want to be surprised with a
new book I haven't yet heard of. The 'new titles' displays on the ground floor
often showcase books from smaller publishers which I'd never have found
myself. "Curated" is an overused word these days, but it's exactly what
they're doing, and doing well.

What the article doesn't mention is that Waterstones, under previous
ownership, took over other good UK bookshop chains - notably Ottakars and
Dillons. This was generally met with rending of garments and gnashing of
teeth, because Waterstones at the time was the lowest common denominator High
Street bookshop. But Waterstones now is better than I remember Ottakars or
Dillons ever being.

~~~
irremediable
I remember when Borders (another bookshop chain) went bankrupt and they closed
down the Oxford branch. By the time I reached it, they were desperately trying
to sell trash books at any price, just to make back money. They were also
begging people to buy the shelving.

~~~
JulianMorrison
I remember when that place was awesome, and I spent many happy hours there. I
was devastated to see it go, but yeah, in the end it had hollowed out to
garbage, stationery, and toilet humor. Bleh.

------
hibikir
B&N is really suffering from a way bigger problem in the US: The death of
retail. Other than a few big cities, the cost of going to a store in the US is
far higher than in Europe, just because e have to actively go to a store,
instead of passing them on the way to work. This is what made American stores
into big boxes: Since people had to make specific trips to the store, it paid
to make them big, fill them up with lots of inventory, and make them service
large areas.

But then the internet happened, and as internet retail gets getter and better,
the weakest stores suffer, and the weakest of the lot are bookstores and
electronics stores. We've seen competition in those areas dwindle already,
because the market just couldn't hold: CompUSA, Circuit City, Borders, are
gone, but it's not as if the survivors are thriving: Their sales are still
getting eaten by Amazon more and more every year.

So B&N will probably manage to stay alive until the next economic crisis
happens, consumers start buying a bit less, and the internet eats them alive.

In more dense urban areas, very efficient book retailers will still have a
chance for a while, because it is often more convenient to buy at a local
store than to buy online. They'll still have to be afraid of the switch to
ebooks though.

~~~
toyg
_> They'll still have to be afraid of the switch to ebooks though._

Not if they do it right. I buy ebooks and hardly ever go to a bookshop these
days, but I used to love browsing through physical shelves looking for
"enticing" items and miss that experience dearly. Would I pay an extra £1 or
£5 to get that experience back? In a heartbeat.

What they need is an augmented experience where i can show up at the store
with my e-reader, go through books, and when i find a nice one, let me "point"
the reader at it to download it seamlessly. The reader should figure out I'm
in a bookstore and, after fulfilling my request, send a percentage of
generated revenue to the store operators.

You could do this today, either as an Amazon affiliate or with a custom
website API. You don't even need to risk overstocking: get one book for each
title, nothing more. You could even open the API to third parties and let indy
shops bloom. But you would have to be competent, forward-looking and not
afraid of change -- qualities sorely lacking in the whole retail sector, and
not particularly valued in publishing either.

~~~
jdmichal
> What they need is an augmented experience where i can show up at the store
> with my e-reader, go through books, and when i find a nice one, let me
> "point" the reader at it to download it seamlessly. The reader should figure
> out I'm in a bookstore and, after fulfilling my request, send a percentage
> of generated revenue to the store operators.

This is actually a pretty great idea. After reading it, it feels plain silly
that B&N haven't leveraged the fact that they own both physical bookstores and
a reader. There's a huge relationship that they're completely not utilizing at
all. And since it's all B&N, they don't even have to worry about the latter
half of the idea.

~~~
mindcrime
I'm a B&N fan and shop there often, but that's one thing that always gets on
my tit - they have totally screwed the pooch on the whole "clicks and mortar"
thing. They should leverage the fact that they own retail stores and have an
e-commerce side and an e-reader and make one nice, seamless experience. But
no... Even worse, the experience on bn.com is pretty much shyte, especially
compared to Amazon.

The whole "one click" thing aside, bn.com totally fails at coming close to
Amazon in terms of discovery / recommendations / search, availability, and
even visual aesthetic. I almost cringe every time I wind up on bn.com for some
reason.

Somebody in another comment said their IT is stuck in 1995... I could totally
see that. I hope they get things figured out, but I'm not real confident.

------
alistairSH
I see parallels in other industries as well. I recently purchased a new camera
(Olympus PL6). Normally, I just order my electronics online. However, in this
case, the size and feel of the camera was very important to me, as I'll be
using it on a cycling trip next year. I wanted something to complement my
pocket-sized Canon S-series.

I swung by my local Best Buy to see some of the options in person. They didn't
have much of a selection. A few full size DSLRs and a bunch of cheap point and
shoots. Maybe one Sony mirrorless.

This seemed to be true of all the areas. The shop was a bit of a ghost town.
Lots of "stuff", but nothing to get excited about (and I'm a gadget geek).

So, I went to the local camera specialty shop. It's a bit further away, but it
was nice to get all the options spread out on the counter, chat with a
knowledgeable salesperson, and end up buying something. Yes, it was full
retail, but I got what I wanted, no regrets.

Same for my local bicycle shop. I can order most of the stuff online, but for
some items, having knowledgeable staff and items I can touch is worth the
extra retail markup. But, the items need to be in stock, the salesperson needs
to be able to help me, and the atmosphere must be something enjoyable.

~~~
gutnor
> Yes, it was full retail, but I got what I wanted, no regrets.

That's something worth noting. People say you vote with your wallet, but they
don't. If you need to see something in person, then by all means, pay the shop
the price it asks and do not buy it on Amazon later.

If you need to see it, then buy it where you can see it, not send mixed
signals: thumbs up for amazon, thumbs down to the local shop while you
actually needed the opposite. I have no shame shopping better price on Amazon
or others. But once I have needed to put a foot into a physical store, a
physical store will get my money.

~~~
pjlegato
> People say you vote with your wallet, but they don't.

They do; they just don't vote the way you think they ought to.

Empirically, given a similar quality item, almost all people vote for lower
prices, almost always, despite any amount of haranguing about how it'd be
morally better to pay slightly more because of this or that benefit.

Other examples:

* During the US deindustrialization of the 1970s-1980s, there was a big "Buy American" campaign, touting the many benefits of paying slightly more to preserve the US industrial base and its jobs. It was completely ineffective.

* The political climate in San Francisco is ostensibly heavily biased against chain stores, yet the new City Target in SOMA had lines around the block when it opened. Laws to restrict chain stores by fiat were even deemed necessary to stem the tide of chains, even though empirically they do pretty well in the city -- meaning many residents actually do want to spend their money at chains.

* Almost everywhere a new Wal-Mart opens, people complain about all the local mom and pop retailers that'll be put out of business. Yet the new Wal-Mart is usually packed. Years later, it remains in business. They close locations that aren't profitable.

People do indeed vote with their wallets. They just don't usually vote the way
you think they should.

~~~
gutnor
'Voting with their wallet' is actually an expression used to remind people
that what they actually buy is what is affecting the market, not what they say
or what they wish.

What I'm actually saying is that if you need to enter a physical store for
some type of goods, then it is not stupid to pay a markup. That's actually
paying for a service you need (and for the record, it is very unlikely that it
is a service I need).

In all the example you gave, it is ok to tell people to stop complaining and
vote with their wallet. eg: you complain you want mom and pop retailer to
survive but you only shop at WalMart, vote with your wallet or shut up. (
again for the record, a lot of the mom and pop retailer just sucked, the added
value they provided was limited to the convenience of being located where you
once did most of your shopping, not expert advices, choice, accessibility, or
any kind of flexibility or service. They were replaced because once they lost
the location advantage, they simply provided not reason to set a foot in their
shop ever again. If you regularly go to a village lost in the middle of the
countryside, you probably understand what I mean )

------
daxfohl
Seems like there was a move in the 90's to gigantify everything. Bookstores,
electronics stores, gyms, etc. It was awesome because they had so much more
selection than anything prior.

Now with the internet, that's no longer the case. There's absolutely no reason
to drive out to a strip mall to find the book / electronics you want. Mega-
gyms still succeed. Retailers need to find something else.

I wouldn't be surprised if malls start making a comeback in the US. There are
lots of times you want to browse through tangible miscellanea, and the
internet doesn't give you that. But it'll be different than the 80's, as shops
in the mall will have to know better how to cater to a specific local
demographic; generic won't cut it anymore. I wouldn't be surprised if they
were anchored by fresh markets, the quintessence of "local".

~~~
7952
In the UK we have "garden centres" that feel like an iteration on malls. They
tend to target a particular demographic very well (older people) and sell
various side lines that are very profitable (like gifts, clothing, toys, and
books). The quality of the plants act as very good word of mouth marketing
device that brings people in. They don't have to bother trying to appeal to
everyone.

------
noir_lord
I'm in the UK.

Most of this article sounds familiar from frequently visiting Waterstones, it
really has improved remarkably, the selection of books that people would
actually read is excellent, the sci-fi section expanded and they moved it to
the second floor (which made sense, ground floor is prime real estate for
shifting volume and sci-fi isn't (mostly) volume).

They put a Cafe in on the 2nd floor which is nice if you just want to grab a
coffee after a browse or buy your book and go read it with a coffee.

The staff where always pleasant and helpful so that hasn't really changed.

------
pjc50
_The number of unsold books that were returned to publishers fell from about
20 percent before Daunt took over to just 4 percent today._

A small but important waste reduction.

It seems that by freeing the staff he's created what's effectively a chain of
indie bookstores, where each one has its character determined by the staff.
This works because people who work in bookstores are far more likely to love
books than other kinds of retail workers love their product (except maybe some
fashion brands, but they're tightly brand-controlled).

~~~
TheOtherHobbes
That's not small - that's _huge._

Books are stocked sale-or-return. Upgrading your hit-rate from 80% to 96%
takes epic customer insight.

I suspect the range has shrunk, so there won't be many quirky or indie books.
But they're mostly doing okay online. So...

>It seems that by freeing the staff he's created what's effectively a chain of
indie bookstores.

There must be more going on, otherwise staff would make random picks of
whatever they're into and fail to sell them - which is what happens to a lot
of indies.

But I think there's another difference - the UK still has a culture of
literacy of sorts, while in the US that's much less obvious. So although the
population is much bigger, I wouldn't be surprised if the number of active
book buyers - as opposed to the best-seller-a-year crowd - is about the same.

Spread those over a much bigger geographical area and there are problems of
delivery, stock choice, and logistics that don't apply in the UK.

The Waterstones model could possibly work in the US, but B&N would have to
kill its warehouses, move its non-book stock online, and rent plenty of
smaller city centre shops near business and tourist districts - which would be
expensive and risky without some trial runs.

~~~
xemdetia
> There must be more going on, otherwise staff would make random picks of
> whatever they're into and fail to sell them - which is what happens to a lot
> of indies.

This was actually described in the article:

"Next came the staff. Daunt shrunk Waterstones’ central office and fired half
of the store managers. He gave those booksellers who remained almost complete
autonomy over how to arrange their stores—from the windows to the signage to
the display tables—but controlled the stock with a dictatorial zeal. Out went
books you wouldn’t want to browse: reference, technical guides, legal
textbooks."

The choice and local culture from the on-the-ground booksellers comes from the
layout of the store, but what could ever make it into the hands of the
bookseller is centrally managed which is probably the biggest difference to an
indie. Reducing the stock to things that are more likely going to be impulse
buys probably has a lot to do with it, since it is really impossible to keep a
wonderful reference book selection that is fun to browse and easy to take
home. The only time I see that work is if it is extremely close to a
university or it is a used bookseller. In the used bookseller case they get
the reference books for a fraction of the cost and can list them online as
well but they don't have to worry about the day to day events.

------
frisco
Wow, the current B&N CEO's resume reads like a hit list of terrible projects:
Sears, Brookstone, Best Buy, Toys R Us. I'd be really curious to know the
decision making that goes into hiring someone like that to run B&N. It's sad,
because I really like B&N, and feel like there is a strategy to make it
relevant in the changed reality - but a generic leader from "retail" with
experience mostly in companies that have specifically failed to adapt is not
going to get there.

~~~
astine
It's likely that they believe that even experience running a business into the
ground is better than no experience at that level at all. It's possible that
they don't even blame him for the failures and just chuck it up to the market.

------
tzs
Barnes and Noble is dying to me because of their idiotic website.

When you check to see if a book is available in your local store, you have to
enter a zip code.

Then when you check another book, you have to enter your zip code again. You
have to enter it for every damn book you want to check.

Have these people never heard of session cookies?

You can login to the site if you have a B&N account (and they remember
this...so they DO know about cookies). When logged in you can even set your
location, and they remember that...but as far as I can see that is only used
to determine what to show you when you ask for upcoming events. It doesn't
help with checking to see if a book is available at your local store.

B&N as a web seller of books has _nothing_ that tempts me to use them over
Amazon (especially since I have Prime). Their sole draw is that they have a
big store full of books 15 minutes away from my home, which means that if my
store stocks a book I'm waffling about buying online I can go in and take a
good look at it. And when I do that there is a good chance that if I decide to
buy the book I'll buy right there, both for the convenience of having the book
right then and because I do want offline bookstores to stay around. I'm
willing to eat the price difference over Amazon for that.

They need to have a way on the website to tell it "I'm here because I'm
interested in what is in stock in my local store right now...do not show me
anything else". If they did that, I'd buy a much larger fraction of my books
from my local B&N store.

------
dmfdmf
I used to hang out at the B&N a couple of times a month and bought a number of
books per year. They got rid of all the comfy chairs and tables throughout the
store and now the only place to sit and read or peruse a book I am thinking
about buying is in the noisy, uncomfortable in-store Starbucks. To avoid this
customers are sprawled uncomfortably on the floor, sitting in windows sills,
etc. amongst the books, its a bad joke. I stopped going and haven't bought a
book from them in years.

------
zschuessler
I recently visited a Barnes & Noble for Christmas shopping. I was shocked at
the markup! A $13 brand-new hardcover on Amazon is $30+ at Barnes & Noble. All
books were 2-3x the price I saw on my phone. I noted a few I wanted, and
bought them from Amazon the next day. Same-day delivery, no less! I understand
competing can be hard, but the markup they are pushing is unnecessary.

I fondly remember in my youth grabbing a book and a drink from their cafe. I
would sit down and read an hour or two while my mother shopped around. I'd
love to see B&N survive by innovating instead of relying on egregious markup.
Perhaps a coffee shop with a book rental service? (Pay by the hour, all you
can read, or something along those lines. Additionally, sell new books as they
do now)

At any rate, B&N needs to get creative. Their current model will be
increasingly difficult to perpetuate.

------
lmm
All the books mentioned in the article are links to Amazon. Which is why I
ultimately think Waterstones is still doomed; I kept going in until recently,
but even when I saw a book I liked, I'd be put off by how heavy the paper
edition was.

Still, the lesson is a good one. Many people are good at their jobs if you
trust their judgement and delegate responsibility.

~~~
Symbiote
> All the books mentioned in the article are links to Amazon

They link to Amazon with referral ids from Slate Magazine, so Slate earn a
cut.

But Waterstones run an online book shop:
[https://www.waterstones.com/](https://www.waterstones.com/), and the
"Christmas" banner at the top seems to link to a semi-curated collection of
titles.

------
prostoalex
Digging into the financials of Barnes & Noble, it's mainly suffering from
Nook's underperformance and its inability to command a reasonable share of the
ebook market. Here's a news piece on their last quarterly report

[http://www.bloomberg.com/news/articles/2015-12-03/barnes-
nob...](http://www.bloomberg.com/news/articles/2015-12-03/barnes-noble-posts-
loss-as-nook-e-reader-unit-weighs-on-sales)

"The company, which spun off its college-bookstore division earlier this year,
also has seen store closings eat into revenue."

"The bookstore chain said it expects comparable-store sales to be flat this
year, with the Nook weighing on results."

"Sales decreased 4.5 percent to $894.7 million. But comparable-store sales
only fell 0.5 percent when excluding Nook products."

"The retailer also has worked to stem losses from the Nook unit by lessening
investment and teaming up with Samsung Electronics Co. to produce the
devices."

So overall the Barnes & Noble brick-and-mortar book+coffee+accessories
business is doing relatively okay, what's hurting it is previous investment in
e-readers and e-books that's tough to wind down.

I remember a similar thesis explored when Borders went bankrupt - comparable-
store sales were relatively flat, but the company borrowed immensely to
finance expansion, and it was the expansion that didn't pay off. The old
school business, if left alone, would've tagged along.

------
Apocryphon
Similarly, Eslite in Taiwan is flourishing by marketing themselves as a
24-hour source of nightlife, while other large book stores are closing down:
[http://www.cnn.com/2014/11/23/world/asia/taiwan-
bookstores/i...](http://www.cnn.com/2014/11/23/world/asia/taiwan-
bookstores/index.html)

------
Elvie
Back in the day (2000) I worked in a branch of Books, etc. A chain, mostly
London based, with some airport branches, soon before their takeover by
Borders.

When I started working there it worked like the current waterstones in a way,
as we, at branch level, saw the publisher's reps and chose the stock for our
branch. Only the big 3 for 2 promos came from head office... Then it all
changed and we were left with stock that wouldn't shift - 20 copies of a Bjork
book in a small branch in the City is an example I remember...

Then Borders took over thinking selling books is the same as selling baked
beans. By then I was working in the head office getting more and more
disillusioned... Honestly, I'm not surprised Borders went down as it tried to
follow the B&N system of huge branches in out of town locations...

------
GregQuinn
Waterstones also has a click and collect system.

You can order books on-line through their website and pick them up at any
store. The on-line price is also lower than the store price.

------
macjohnmcc
I went into a B&N store and found a book that I was going to buy. They wanted
far more in the store than they did on their own online bookstore and offered
no in store pick up on the web. I would have bought the book from them then
and there if they had matched the price or met me somewhere in the middle.
Instead of buying from BN.com I just went to Amazon.com and got it in two days
all this while I was still in the store.

------
hardlianotion
Sounds like Daunt simply recalled what made Waterstones so attractive as it
rose to prominence in the 1980s.

------
daemonk
I guess there is value in the experience of purchasing a book as much as the
book's content.

------
eggestad
the US is just ahead in the curve. The brittish are naturally so onservative,
if not outright reactionary, that the new buisness models haven't had the same
impact yet.

In Scandinavia online shopping has taken on almost as well as in the US, and
bookstores there is suffering just as bad a B&N.

This is despite actually having done much of the advice offered in this
thread. ARK in Norway have outlets in all the Malls (still the most popuar
shopping places in Norway) adn outlet in walking market districts in the
cities. They cut their inventory to high volume books only. Still
struggeling....

~~~
justincormack
No the UK is one of the largest online shopping markets per capita in the
world.

~~~
ascorbic
Not just one of the largest: it is the largest, and by a large margin too.
[http://www.cityam.com/205546/uk-has-most-valuable-online-
sho...](http://www.cityam.com/205546/uk-has-most-valuable-online-shopping-
market-developed-world)

------
bonesinger
I love Barnes and Noble, however, one of my issues with BN is that they are
mostly out of the way and not near malls where they'd get a lot of traffic.

Another issue I think is absolutely mind boggling is that their online prices
are not what's in store; you can't even price match their website with their
own in-store pricing, let alone price matching with Amazon.

I generally browse BN and then pull up Amazon to check pricing there, and
either order the book with same-day delivery/next day or buy the e-book. Its
still cheaper to pay for same day/next day than to buy it in store.

~~~
kevin_thibedeau
That sort of behavior is what is killing retail. If you're going to browse the
showroom it is more than a little backhanded to then buy from an online
competitor with less overhead.

If I find a product I want to buy in a store I will buy it there. More often
than not, though, retailers don't have what I need and I end up forced to buy
online anyway.

~~~
bonesinger
I'm in no way obligated to buy something in the store, especially when they
have obfuscated policies regarding pricing. How can you justify a higher price
in store when you have a lower price online and your competitor has a lower
price and same day delivery? I get 25% BN discount from my gf's teacher
discount and stuff is still more expensive than their own online pricing.

If I find a significant price difference, I'm going to buy it online. However,
I will go out of my way to purchase at small business because there are
benefits to that.

~~~
kevin_thibedeau
The higher price is because they have to pay for employees to serve you, HVAC
and lighting so you can be comfortable and see at night, the capital
investment for everything needed to run the store, plus local taxes. All for
the convenience of letting you see the product first hand.

Taking advantage of all those things and then robbing them of a sale isn't
fair to the business trying to stay afloat. Comparison shopping between
proprietors on equal footing is fair. Not between brick-and-mortar and a
warehouse operation with huge economies of scale.

