From veteran publishing consultant, Mike Shatzkin:
In what has to be considered a bit of a coup, BISG Executive Director Brian O’Leary scored a lengthy interview with B&N head James Daunt as the feature of BISG’s annual meeting which took place on September 11. Daunt had a lot to say about his plans for change at B&N, including more diversity in what the stores stock which will be a by-product of more power for individual store managers.
What publishers undoubtedly took note of were Daunt’s announced notion to lighten up on initial buys and depend more on rapid replenishment to keep books that move in stock. He seemed to expect the rapid resupply that requires to continue to come from B&N’s own warehouse infrastructure, a system of support built during a more expansionist time.
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What presents publishers with a bit of a conundrum, though, was Daunt’s firm position against publishers calling on the B&N stores to inform store managers about offerings that the central office might have skipped for them that they might want to consider. In fact, this “all the information has to go through the home office, but the store managers can do some stocking as they see fit” is both a logical and logistical oxymoron in the plan. If the central office doesn’t like a title enough to buy it, why and how would they pass along information to a store sufficient for them to make a different decision? And if the titles not bought are never presented to the stores, how would they know what to buy from what was skipped?
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Although Daunt answered every question put to him, he also clearly had his own checklist of things to say and emphasize. The most glaring omission from Daunt’s presentation was the fate and role of BN.com. This is particularly ironic because competition with Amazon (always, and disconcertingly for me, pronounced “AmaZIN”) was a frequently-arising topic. Daunt was acutely aware that much of what had been his chain’s business is flowing to them. But, curiously, he had absolutely nothing to say about his own dot com competition with them. Not one word.
And if Barnes & Noble sees any inherent advantage in having an online complement to their store presence, such as a “buy online, pick up in store” or “buy in store, have delivered by post” capability offer, Daunt did not to choose to mention them in this conversation (although the store pick up capability has been talked about him in the past and curbside pick-up has been featured during the pandemic). If B&N sees any threat from Amazon expanding its physical store footprint with much smaller stores, that also wasn’t mentioned.
In fact, Daunt’s hopes (you couldn’t call them “plans”) for the Nook got a lot more airtime than the zero allocated to dot com sales. This despite the fact that dedicated reading systems started out in service to dedicated devices. Dedicated devices have been superseded by multi-function devices. There is no real discernible point or competitive advantage to the Nook reading system. These realities were not acknowledged in the dialogue.
The movement of book sales from shops to clicks is now a much bigger story than Amazon and B&N alone. Big retailing brands like Walmart and Costco are selling books online as well as in their stores. Bookshop.org is a new indie-friendly online sales capability that is starting to get real traction, although it is still tiny compared to Amazon or BN.com. But customers who want to buy online and don’t want to support Amazon have a robust new alternative that is not named Barnes & Noble.
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The inexorable shift of book sales to clicks is a bigger question than the merchants and the pricing. Temporarily accelerated by the pandemic, the movement of consumers to buy more and more online for home delivery — of just about anything but especially those things that don’t have to be tried on or tasted — is a trend that shows no sign of abating. It would seem to me that acknowledging that reality would be front and center thinking for any retail operation with a big physical footprint and a significant digital infrastructure.
Link to the rest at Idealog
PG will attempt to control his impulse to bloviate and opine and comment in a more bullet-pointish manner. (Update after finishing his comments: PG failed.)
Daunt appears to be a smart guy, but PG thinks he’s out of his depth (and culturally-unsuited) to save Barnes & Noble (which would be a very, very difficult job for anyone).
The true costs of the pandemic have yet to be calculated and at least some long-term impacts yet unknown.
Amazon has benefitted greatly from the great shutdown as a whole lot of people who were Amazon customers have broadened the range of items they purchase from the Zon.
Perhaps more importantly, a lot of people who weren’t Amazon customers or were sporadic Amazon customers have become regular Amazon customers.
Some unknown percentage of people (at least in the US – PG claims no expertise elsewhere) will continue to purchase more online instead of automatically reverting to their prior physical retail shopping habits after Covid dies.
As Mike pointed out, Walmart, the largest retailer in the US, has (finally) gotten its online presence worked out so it’s usable and, at least in PG’s locale, offers free two-day delivery for online orders. If any meaningful percentage of Walmart customers continue to purchase more online than prior to the Great Shutdown, such behavior will have a significant impact on physical retailers. It’s really, really easy to add a discounted physical book to your Walmart order.
A whole lot of retail purchases are made when someone is going to work or returning home after work. A great many people, including many with a significant amount of disposable income, who used to travel to work are working from home at present. Many prognosticators PG follows predict that a significant portion of those working from home at present will continue to do so after the facemasks disappear, at least some of the time.
Care to guess which is easier for someone working at home – Ordering from their computer OR getting in the car/on the bus-subway and traveling to a physical retail establishment to pick up a few things? Yes, sometimes, it will be nice to get out of the house. For relief, exercise and pleasure more than for shopping.
Free pickup of essentials ordered online from grocery stores and elsewhere will not disappear with Covid.
Back to Daunt and Barnes & Noble
Who’s going to be around to go back to work at all the Barnes & Noble stores that are closed or operating on reduced hours with reduced staff?
Store managers? Maybe, but some may have found better opportunities elsewhere during shutdowns.
Store staff? Nope. Low-wage jobs are available elsewhere during Covid and PG suspects many former BN staff will stick with what they’ve been doing after being laid off by Barnes & Noble instead of going back (being laid off always leaves a bad taste in the victim’s mouth).
So re-opened Barnes & Noble stores will be filled with newbies able to provide precious little customer service to those who decide to try out a physical bookstore after having bought all their books from Amazon or electronically borrowed them from their local library for months and months.
Basically, Barnes & Noble stores will be in a position of having to win back a significant portion of their former customers. A great many were marginal business operations before the shutdown and will be money-losers if even a relatively small percentage of their prior patrons don’t come back.
In one of the comments to a prior post on TPV, someone pointed out that the geography of England allows Daunt to drop in on most of his Waterstones retail stores to impart his personal touch on operations with relatively little travel time. That will definitely not be the situation he will encounter in the US. Daunt’s idea of each Barnes & Noble store manager curating stock for the local populace won’t include Daunt’s tips and critiques provided to Waterstones store managers in Old Blighty. Additionally, unless Daunt relocates, regular trans-Atlantic flights take a toll on anyone who makes them on a regular basis.
Daunt is correct to not talk about Barnes & Noble’s ebookstore. It’s a giant hot mess. Barnes & Noble will have a very hard time hiring talented tech people with the ability to bring it up to basic non-Amazon internet retail standards and even very well-funded competitors of Amazon have a hard time competing with the Zon head-to-head. Amazon is the best on the planet at ecommerce and anyone who thinks they can build an ebookstore that’s remotely competitive to Amazon’s without spending obscene amounts of money has only the shallowest understanding of what goes on under the hood on Amazon’s website.
Mike is correct in his assessment that Nook reading devices are dead, dead, dead. And cannot be revived with any hope of ever reaching financial break-even.
In the OP, Mike mentioned a new online bookstore saying, “customers who want to buy online and don’t want to support Amazon have a robust new alternative that is not named Barnes & Noble.” PG gently suggests that the size of this “don’t want to support Amazon” target market is miniscule. If such an enterprise tries to operate without discounting to Amazon’s prices (a very difficult thing to pull off without Amazon’s scale), it will struggle to survive in the nichiest of niche markets.
PG will end with a quote from the OP: “The movement of book sales from stores to clicks will continue and, near as I can tell, B&N has no plan in place based on an understanding of that inevitability.”