What James Daunt did and did not say about Barnes & Noble’s future

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.

. . . .

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?

. . . .

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.

. . . .

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.

However:

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.”

31 thoughts on “What James Daunt did and did not say about Barnes & Noble’s future”

  1. “customers who want to buy online and don’t want to support Amazon have a robust new alternative that is not named Barnes & Noble.”

    Mike is talking up bookshop.org, and is doing so because all of bookshop.org’s business is fulfilled by Ingram, and as I have said, Mike has been shilling for Ingram for years. It’s what he does.

    Bookshop only carries tradpub books. If you happen across a great self-pubbed author on Amazon and want to purchase a paper copy for someone, you’ll have to do it on Amazon, like it or not.

    Bookshop barely discounts. If you don’t want to comparison shop, or are still thinking that Amazon is evil because their stock workers actually work all day, well then, good for you. For many titles bookshop is $10 more than Amazon, and shipping is tacked onto that.

    On top of that, I did a quick look for a current seller, “Where the Crawdads Sing” on both. Bookshop shows two results which are “Journals”. Apparently these are books that say “Where the Crawdads Sing” on their cover, but are blank inside, for $6 (and $3.50 shipping, and $0.55 sales tax). These ‘books’ are scams to entrap the unwary shopper. Amazon does not show these in a search, which means that bookshop.org is already getting used by scammers, probably by putting these items into the Ingram database. Whoopsie.

    • Amazing about “Crawdads” journals.

      I just did a search on the title and the apparently legitimate English-language and Spanish-language books showed up followed by a “Where the Crawdads Sing Summary & Study Guide” and two “where the crawdads sing” notebooks (no caps in the original titles).

      I didn’t see anything similar to Amazon’s Look Inside feature so prospective purchasers can check out the contents.

      I found some examples of something like this on Amazon. In some cases, there was a disclaimer at the very end, but nothing prominent other than the full title of the book.

      The Sales Ranks for two books I checked indicate that very few are being sold.

      It made me wonder if Ingram is doing any screening at all for rip-off artists.

      UPDATE: There is a CliffsNotes on Amazon for “Where the Crawdads Sing” which is cheaper than the others I found.

  2. When people say xxx will be around forever (substitute books, malls, B&M storefronts of whatever kind, etc) they’re forgetting about tipping points. A business doesn’t need to hit zero to collapse; it just needs to go low enough it can make enough above overhead to make it worthwhile.

    The issue with B&N that brought their valuation from its multibillion dollar peak to it current low point isn’t that nobody goes there; but that the people who do go to many of the stores aren’t enough to make ends meet. And the pandemic is teaching shoppers new habits.

    Like grocery shopping: a lot of people used to pick up a few days groceries on the way home. Or eat out often. Eating out is less common, ordering delivery more so. Mom and pop pizzeria are going to hurt, Dominos’s is thriving. Supermarkets will likely see less traffic but the average grocery load will be much bigger; why risk crowds weekly or more when you can limit your exposure to one grip a month. That may result in bigger fridges, auxiliary freezers, more meal kit subscriptions…

    Theaters are trying to reopen and get back to normal but “normal” isn’t going to be anything recognizable. Too many people have been spending too much time watching streaming video to go out for just any old movie. Even when theaters reopen and going to a movie isn’t a gamble with your health people have learned that all movies will fairly quickly come to their living room. Minus screaming babies, fidgety kids kicking tbe seatback, teenagers giggling or making out…

    Blockbusters will still draw crowds but the crowds will be smaller, exclusive theatrical runs shorter. We may have seen tbe last billion dollar box office for quite a while.

    Lots of industries will be evolving and publishing at all levels is going to be impacted.
    The industry pundits may refuse to accept it, the corporate overlords might blame it on their serfs, but change is coming to stay. Publishing is no special snowflake.

    And the folks doing best aren’t going to be the ones who change the fastest; the best perfecormers will be the onds who were *already* doing what tbe changes demand.

    First overs tend to prevail over latecomers, regardless of how well the laggards copy them.

    • Thing I heard on the radio the other day, about theaters. CineMark (and King, I think) chains are now offering reservations for you and up to twenty of your friends to have a “private screening.”

      The radio people said $99 for an older film, $149 for a new release. That’s $4.95 or $7.45 per person.

      Wow.

      Edit – and I just managed a typo on a desktop with a regular keyboard. (“thats” when I meant “that’s”).

  3. As I mentioned in the earlier thread, Shatzkin’s advocacy of bookshop.org (and of Ingram) emits the stench of undisclosed conflicts of interest for which I don’t have documentation… but do have probable cause to look for it.

    And now, I’m going to specifically excoriate Ingram’s historical (and present, I’ve just consulted in the last month with two academic clients of mine on this) disdain for “small group orders” of non-NYC-published works. Consider, for the moment, a graduate seminar that requires all eight to fourteen students to work from the same “critical edition” of an otherwise-public-domain work; let’s say, for the sake of discussion, Melville’s The Confidence Man. So we need to order fifteen copies (allow for a spoil and/or underfill… <sarcasm> but Ingram never has those problems, right? </sarcasm>) to be available with a hard delivery date of 22 September 2020. (This hypothetical campus is on the quarter system.) About a quarter of such orders historically through Ingram would glitch on quantity and/or timing.

    Ingram’s mindset is “single copies or case lot.” It’s one that works for it (or, at least, its absentee investor-landlords) and admittedly it’s a significant part of the potential marketplace. But it’s not universal by any means, and the pretense that it is disserves everyone.

    Remember, folks: There are thirteen distinct publishing industries. Ingram purports to serve them all… but actively ignores three of them and disserves at least four of the others. And that’s before getting into The Library Problem.

  4. For BN to gain the market share it needs to survive, Amazon will have to lose market share. Show of hands. Who’s betting against Amazon?

    • Well, now…
      This isn’t a two horse race.
      It’s like the campers and the bear; you don’t have to be faster than the bear. Just faster than the other camper.

      Instead of taking share from Amazon they should be targetting the rest of the also-rans.

        • I hurt myself laughing.
          Didn’t know anybody actually contemplated that.

          The joke as I heard it was lions and hunters on safari. But since safaris are now politically incorrect…
          There’s definitely no room left for humor anymore. (sob!)

          😉

          Still, B&N should be working on taking share from the other 30% that isn’t Amazon, in print, and from Kobo and Apple in ebooks. Always go for the weaker prey. There can be good money in being number 2.

          • Umm, because both the objective and the probable (ok, nearly certain) methods violate antitrust law, unfair competition law in general, and are probably prohibited by contracts? Just maybe some of the maroons who run the absentee-landlord funds trying to “dominate” have read (or their counsel have read) United States v. Apple, Inc., 952 F.Supp.2d 638 (S.D.N.Y. 2013), aff’d, 791 F.3d 209 (2d Cir. 2015).

            • Uh, the idea is to compete instead of whine.

              If you can’t beat Amazon, at least try to beat everybody else.
              That is effectively what Waterstones has done in the UK.
              Amazon has lost no market share but everybody else has. And he did it by putting more distance from the big publishers, not breaking the law.

              Shatzkin’s little online bookstore? B&N can crush it in a week.
              All they have to do is sell promote BN.com instead of pretend it doesn’t exist. Let the world know they’re cheaper.

              For ebooks, sell ADEPT epubs. Or better, DRM free.
              The silliest thing tbey do is sell readers that can accept ADEPT books from Kobo, google, and other white label stores but not the corresponding ebooks.

              Amazon on the brain only helps Amazon.

              • Not going to happen, Felix. That method implicitly admits that they were wrong before. (And are wrong now.) No, they’ll act like Apple did and got slapped down for doing. Those sorts of shenanigans are hard-coded into the MBA curriculum.

                • It’s new management.
                  Daunt can do the three letters routine:

                  https://www.kevinkruse.com/the-ceo-and-the-three-envelopes/

                  A new CEO was hired to take over a struggling company. The CEO who was stepping down met with him privately and presented him with three numbered envelopes. “Open these if you run into serious trouble,” he said.

                  Well, three months later sales and profits were still way down and the new CEO was catching a lot of heat. He began to panic but then he remembered the envelopes. He went to his drawer and took out the first envelope. The message read, “Blame your predecessor.” The new CEO called a press conference and explained that the previous CEO had left him with a real mess and it was taking a bit longer to clean it up than expected, but everything was on the right track. Satisfied with his comments, the press – and Wall Street – responded positively.

                  Another quarter went by and the company continued to struggle. Having learned from his previous experience, the CEO quickly opened the second envelope. The message read, “Reorganize.” So he fired key people, consolidated divisions and cut costs everywhere he could. This he did and Wall Street, and the press, applauded his efforts.

                  Three months passed and the company was still short on sales and profits. The CEO would have to figure out how to get through another tough earnings call. The CEO went to his office, closed the door and opened the third envelope. The message said, “Prepare three envelopes.”

                  The first version I saw was Stalin leaving the letters for Khrushchev but this version is on topic. 😉

                  Daunt has no reason to defend Riggio’s policies and every reason to throw him under the bus.

                  It’s a basic intelligence test.

        • Thank you for the morning laugh! I followed your link to the Park Service’s Facebook page, where someone posted this poster. Photoshopped? Genuine? Hilarious either way:

          https://www.facebook.com/photo.php?fbid=3433218466710508&set=p.3433218466710508&type=3&theater

          I saw a Reddit thread a while back where some hikers were angry that an obese friend of theirs started trying to play with some bear cubs during their hike. For Instagram, naturally. The clueless friend got angry when the experienced hikers began shouting to leave the cubs alone. Finally the Reddit poster got through to the twit by pointing out, “You’re the biggest and slowest of all of us! Mama Bear is going to get YOU first!”

          At first I wondered if the post was a fake — who is that stupid?! Nice of the park people to address that scenario 😀

          • Oh, go look up Darwin Awards.
            There’s plenty of folks that stupid and more.
            https://darwinawards.com

            Most of them help improve the breed by limiting the damage to themselves. As in:
            —-
            5 May 2018, Odisha, India)

            Driving home from a wedding, Prabhu Bhatara idled the car on the roadside to relieve himself in the woods. From a squatting position he spied an INJURED bear–but instead of calling the authorities to help the bear, he opted to get a #selfie with the distressed animal.
            Meanwhile, instead of intervening, the passengers in his car pulled out their mobiles and filmed the carnage…

            As he neared the bear, the passengers advised him against his plan. Mr. Bhatara, however, was determined to fulfill his selfie mission. Once he was within reaching distance, though, the bear was not as injured as it seemed (or it was just having a bad hair day) and lunged forward, pinning Mr. Bhatara to the ground, “killing him on the spot,” according to Forest ranger Dhanurjaya Mohapatra.

            Then, perhaps disgusted at this epic display of homo-sapien apathy, a stray dog joined the fray in an attempt to save the man, and tried to fight off the bear! The bear, however, seemed to believe that the world had one too many selfie-seeking humans and finished off poor Mr. Bhatara.

            According to media reports, once the body was retrieved, forest officials treated the bear for its injuries. The dog, although probably still disgusted, was unharmed.

  5. This continued schilling for bookshop.org seems to be a waste of time. Other posters have pointed out most of the problems. This is yet another retailer who eschews e-ink readers altogether, except perhaps those running Android, and basically wants customers to read only on their Android or IOS apps or on a computer. Presumably this is in large part due to a desire to have effective DRM. Ironically the more successful such retailers become, the more likely they are to attract the attention of hackers wishing to circumvent the DRM. Nevertheless, relatively few readers seem to care about either DRM or e-ink readers. The real problem I see for this and similar ventures is the question of why. I recall seeing an article on a similar venture some time ago, which suggested there was finally an alternative for Amazon customers. What the article left out was why anyone would rationally leave Amazon for such an untried, overpriced, limited and restricted ecosystem. A look at the marketing material for that particular venture was quite revealing, as it focused entirely on benefits to publishers to the exclusion of readers, including not only robust DRM but the availability of extensive statistics.

    So, from a readers perspective, the question is:

    Bookshop.org. Why?

    • Bookshop.org. Why?

      I initially thought that Bookshop might come in handy for indies, to let them partner up with a local store. Imagine using the local store to sell your autographed copies of your paperbacks. The last time I saw a teacher of mine, he was signing a stack of copies of his novel at Borders — wow this was long ago! Borders liked to sell “signed local author” editions, and since he lived in Chicago where the Borders store was located, he qualified. I figured Bookshop might be a way for Indies to do similar.

      But Bookshop only carries tradpub books, so I officially don’t see the use for them. The first time I saw the site, I genuinely thought it was broken because of the lack of links to Amazon. I can’t be the only person who had that reaction.

    • The hackers have already broken the scheme. And it’s inevitable. Since this is information that is in public and I learned it before ever being affiliated with the source of my terminates-after-the-heat-death-of-the-universe NDA, I can suggest that it’s worth reading David Kahn’s The Codebreakers (any edition after the 1968 original) and perusing chapter 22 while keeping in mind the concept of a “known-plaintext attack.” (Hint: That’s how the Content Scramble System — the new-fangled DRM on DVDs — was fully defeated less than 72 hours after the first DVDs using it hit the street.)

      DRM is not, and cannot be, secure — not theoretically, not practically.

      • They were significant enough for somebody to bother with their DRM?
        Or was it just trivial to break?
        (That’s what happened to the original Nook DRM; it was cracked in less than two weeks.)

      • DRM is not, and cannot be, secure — not theoretically, not practically.

        Of course not. Neither is the lock on my front door. It’s easily defeated by a determined attacker. But the lock is a deterrent to the less determined, and provides a marginal barrier to the truly determined.

        Any security system has a specification defining the level of attacks it should be able to deter. A system is a tool, and I’d ask the guy who deployed the tool whether it is meeting his needs. My front door is meeting mine.

        • If all we were worrying about was entry through the front door, that would be fine. And in that sense, your point is well taken.

          But we’re also worrying about whether we’re ever allowed to move to a new place, or even just replace the front door. That’s where the analogy of DRM to “basic physical security devices” breaks down, because DRM isn’t about security — it’s about lock-in, or (to those who actually remember a certain photocopier company’s policies in the 1960s and 1970s) unlawful tying arrangements.

          • Sure, those are indeed additional worries from various quarters.

            I’m limiting my comments to the security aspect of DRM and the intent of those deploying DRM. If they are satisfied with the security results of using the tool, then I consider it a security success. They know their own intent far better than I do.

            If others are not satisfied with that, think the users of the tool should not be satisfied, or don’t like the externalities, OK.

            • What they might think doesn’t necessarily reflect reality. And demonstrably doesn’t, quite often.
              The original NOOK DRM was cracked in days.
              (At least Mobi took a couple years to crack.)

              Latter versions of NOOK DRM have fared no better though the incetive to crack has faded with their market share.

              • What they might think doesn’t necessarily reflect reality.

                Could be. But, how do you know what they think?

                If a hacker cracks DRM, have the publishers failed to meet their objectives?

                • What’s the point to DRM?
                  To lock the contents to a specific reading device/app.

                  If the DRM was broken and removed in days then all the time and money spent developing the proprietary “protection” was a waste. Since no company wastes resources *on purpose* it is a safe bet they thought they were achieving something. Which they did not.
                  Total failure.

                  To be clear, the cracker broke the DRM and released a user-friendly app to remove it, so the ebook could be read in any epub reader/app or converted to Kindle or Sony formats. This negated the need to buy a Nook reader at all since the files worked in free ePub app anywhere.

                  And he achieved this alone, in less than 12 days, from Nov 30, 2009 to Dec 12. He even critiqued the “quality” of the DRM coding and sneered at their “competence”. It was a joke for quite a while in techie circles.

                  That is still the record for fastest DRM crack. 🙂

                • The point of DRM is what the people deploying it say it is. They are the ones using the tool, and they define the reason they use the tool. It doesn’t matter what independent authors think.

                  The publishers don’t have any reason to accept the goals and objectives set for them by independent authors.

Comments are closed.