From Forbes:
Barnes & Noble’s Chief Executive James Daunt is leaving behind the strategy that, decades ago, made it a bookselling behemoth.
Instead of focusing on maximizing economies of scale and simplifying the in-store shopping experience—tactics that once fostered success but, in the age of Amazon, are now leaving stacks empty—Mr. Daunt is looking to empower individual store managers to curate their shelves based on local tastes. In doing so, he is letting go of those who supervised large groups of stores and firing nearly half of the company’s New York-based book buyers who once decided which titles to put on shelves.
Personally, I think this is a really smart strategy, yet the question remains: will this turnaround effort be enough to save the bookselling giant in a post-pandemic world?
When I first read the news of Barnes & Noble’s seismic shifts, I’ll admit, I was shocked.
Yet as I thought about it more, I came to realize that in a time when purchasing the latest bestseller can be done with just a few clicks from the comfort of one’s own home, Mr. Daunt’s new approach may not be so far-fetched.
Barnes & Noble has suffered from seven years of declining revenue as Amazon’s dominance in online retail grows. By giving store managers more autonomy to make decisions based on their knowledge of the local market, Barnes & Noble may be better able to tailor what it does within its individual stores to give shoppers the experience they’re craving.
Rather than just being a place where you could buy a book, what if Barnes & Noble could become a place where you could discover a book? I spend a fair bit of time in Duck, North Carolina where our family loves Duck’s Cottage—a charming book and coffee store that has a very well-curated selection of titles. We have all bought a number of books from there, almost entirely based on the owner’s handwritten recommendation notes.
As we navigate the Covid-19 pandemic and start the long process of recovery, what will bring shoppers through Barnes & Noble’s doors may not be the desire to simply purchase a book, but the desire to be a part of something in the community. I would suggest that is something shoppers will remember, talk about and that will bring them back.
. . . .
The prior operating model for this 50+ year old business did not have a strong balance between local autonomy and standard processes across all locations, which meant clients did not have a consistent experience. This created an operational management nightmare—a challenge when trying to delight clients—and allowed competitors to find easy ways to chip away at their market share. Fast forward to the introduction of one national set of processes and the permission for local leaders to do what they thought necessary to appeal to their market, and the results were transformed.
. . . .
Contrary to a lot of decisions coming out of corporate HQ, consumers across the nation are looking to support their local businesses during the pandemic. We are seeing more and more “Buy Local” campaigns targeted to smaller communities, whether through Facebook or other platforms, and there is strong support for the local service provider or restaurant owner who remembers our usual order. Fundamentally, the team who manages every local Barnes & Noble store knows what their community is talking about, what they are interested in, what the local issues are and who the influencers are.
Link to the rest at Forbes
In many places large enough to support a Barnes & Noble store, there are are independent bookstores that really know how to do local very well and which have (for PG) a more welcoming quirky little bookstore feeling than the bland corporate design that characterizes every BN store that PG has ever entered, even in college/university towns where one might expect more local touches.
While PG has some good memories of quirky bookstores with a local flavor that he last entered a long time ago, no particular memories of any Barnes & Noble store come to mind (even some where Mrs. PG did author signings during ancient days and PG came along to provide unskilled labor for a couple of hours).
And it’s not just the small size of memorable unique bookstores that PG remembers. He still has clear recollections of going to the giant Powell’s Books mothership in Portland, wandering around their immense stacks and talking to a couple of employees who would probably not have been anxious to work at Barnes & Noble.
There’s also the fact that PG doesn’t think Daunt has a lot of money to throw around to remake the physical design of Barnes & Noble stores everywhere. This is a company that went bankrupt a few years ago and hasn’t really turned around anything since.
PG suspects that a great many BN store managers who could get work elsewhere have already done so. Plus, Covid has taken down retailers with much more savvy people running stores than BN has.
Finally, although Daunt is very good at getting press for himself, PG questions how many smart people are left on BN’s headquarter staff to put Daunt’s visions into actions. What sort of person would go to work there or stay there if they had other viable options?
BN is owned by a hedge fund (approximately $41.8 billion in assets) that didn’t buy it out of bankruptcy because the hedge fund partners all loved books. This private ownership means that the general public will only hear the Barnes & Noble financial performance information that the hedge fund wants the public to hear.
How many unique titles are on the shelves of the average B&N? 10,000? 50,000? 100,000? I don’t know, but I wonder how a manager can match all them to the tastes of the local consumers. What tools does he have? Does something aggregate them into groups? Groups defined how. This is a lot of titles to wrestle with.
On he margin, this can work. I can see a few hundred books dealing with local history, tourism, or authors. Maybe more or less of the best-sellers. But looking at the full stock of titles in a store, how much do the tastes and preferences of people in Fresno differ from those of people in Richmond?
Groups most likely.
Most bookstores stock on a zone based approach. (B&N does.)
Recent releases in one area. Discount books in another. Perennials in another.
Then there’s the stacks, organized by topics. Stacks for the classic genres. Stacks for local interests. An example of the latter, a bookstore near an engineering school should stock lots of SF&F while a store in Oberlin or near Howard would be wasting that space.
Instead, they should be stocking lots of today’s bete noir, CRT. 😉
Remember, B&M stores operate on a pareto-like economy, where some 75% of the revenue comes from the 10% of new releases and front table promotions. The ROI on the rest of the floor space is very low so any boost in sales from the stacks is significant. Think of it as the flip side to the law of big numbers: if you only sell 4 books a day from tbe stacks, moving 5 is a 20% boost. 😀
As for local variation, there is a lot. Really.
Not in basic culture but in tastes and especially on the fringes. Hobbies, local interests, Local trends. Some regions folks engage in quilting or canning or bowling. Hunting and fishing. Home gardens. How many books on those hobbies might move in NYC? How would book buyers in Manhattan know where they’d sell? Or that people in Washington state might be interested in Killer Hornets this month? Or know that featuring books on Mexican history in some California stores in April would work but not others? Plus, yes, local history, local landmarks, and local authors.
The idea is solid. Execution? TBD.
Ditto for impact. Because the bulk of revenue will *still* come from new releases and perennials. But that market has been essentially flat all century. And it is out of their control. Any gains they can control *have* to come from the stacks…
…or by taking business from standalones.
He won’t say it but the idea is really to turn B&N stores into a federation of lower operating cost quasi independents; go back to the early days of the big box stores when they grew by decimating standalones. Now they hope to save themselves by doing it all over again.
The questions are on execution and scope; can they cut costs and vulture enough sales to survive?
B&N should survive but they are pivoting to swim in the non-chain bookstore pool which will put those (and Bookstore.org) as their main competition. Those are the ones at biggest risk.
Essentially Daunt is playing out the oldbjoke of the hunters and the lion: They don’t need to be better than Amazon, they just need to be better than the standalones.
I actually remember when there was a single B&N in Manhattan and my uncle, who a NYC fireman, would take me on Sundays to wander around in. I do have fond memories of that. I think the new approach is the only possible option. They certainly screwed up with Nook. I actually gave Nook the idea of Nook First, before Amazon even was doing it. My first book they did it with hit #2 on Nook, right behind The Help. But then they watered down the program.
In essence he’s trying to make B&N a corporate indie bookstore.
My only (and ancient) memory of B&N is frustration. No matter the subject, I could never find what I was looking for.