Amazon’s vast selection of books, low prices, data-driven recommendations and speedy delivery have decimated traditional booksellers. Industry stalwarts Waterstones and Barnes & Noble hope to survive by transforming bookshops into idiosyncratic, communal spaces that sell more than books. It’s a strategy that just might work.
Waterstones, the UK’s largest bookshop chain with 283 bookshops across a handful of European countries, has shown confidence in its plan with its recent purchase of rival Foyles. Its sales were flat at £404 million last financial year, but cost-cutting and a greater onus on lucrative stationery and toys drove profits up 82% to £18 million. US competitor Barnes & Noble, which operates 630 stores across the US, has fared worse: four CEOs have left in the past five years, it continues to cut staff and close unprofitable stores, and headwinds such as lacklustre demand for Nook e-readers and tepid online sales drove underlying sales down 5% to $3.7 billion (£2.8 billion) last financial year, swinging the company to a net loss of $125 million. Nonetheless, both companies have compelling visions of the modern bookstore.
James Daunt took charge of Waterstones in 2011, returned it to annual profit in 2016 after eight years of losses, and sold the company to hedge fund Elliott Advisers earlier this year. He credits an emphasis on the personality and identity of individual bookstore and making them “fun and worthwhile and an absolute pleasure”. Coupled with cutting costs and ceasing to flog window space to publishers, he trusted store managers to select most of the stock for their branches, create localised displays and organise community events such as Harry Potter book nights. Waterstones also stopped selling Amazon’s Kindle e-readers in 2015 – a defiant show of its faith in physical books.
Similarly, Barnes & Noble merchandising chief Tim Mantel’s goal is to “create excitement and stimulate conversation among customers”. Specifically, the company is removing Nook fixtures from the front of stores to improve access to books, updating in-store signs to clearly communicate promotions and make navigation easier, and adding ‘shelf talkers’ with recommendations, reading lists and reviews. Barnes & Noble also hosts events such as Thursday Game Night and an official book club – perks include special editions with exclusive author essays - which attract new customers, boost book sales and position stores as community venues. The bookshop chain is also racing to snatch market share from recently shuttered Toys R Us by pushing educational toys and games, improving its website to drive more traffic to its stores, and has even experimented with restaurants.
Rather than challenging Amazon’s digital dominance, Waterstones and Barnes & Noble have wisely focused on turning their stores into engaging social spaces for local communities. Neighbourhood bookshops can’t generate the same volumes of sales or customers as selling online, but they can foster greater loyalty and engagement among local residents and build a range of revenue streams. The modern bookstore won’t have the largest range or the lowest prices, but could still have its charms.