March 1, 2023
Photo: Wikimedia Commons/Suiren2022
Do sensible retailing principles make for ‘boring’ bookstores?
James Daunt made Waterstones the largest bookstore chain in the UK and has brought about a turnaround at Barnes & Noble that many never thought would happen.
How did Mr. Daunt do it? Apparently, by getting rid of many of the “sensible retailing principles” that helped tank the business in the first place, said the Barnes & Noble CEO on a recent episode of the “Business Studies podcast.
Those principles, which almost every retailer uses, create consistent experiences from one store to the next.
“If you walk into Booths, you want to be able to find the shampoo in the same sort of place in the same sort of ranges, and when it is really consistent, that’s an easy way to shop. And that’s true of pretty much every retailer,” said Mr. Daunt.
Following that approach in bookstores, however, leads to an “inherently boring” experience for customers whose tastes vary based on the local community, according to Mr. Daunt. Uniform bookstores also leave curation, or the lack thereof, to publishers who pay for their titles to be placed on display tables.
Mr. Daunt said that when he joined Barnes & Noble and walked into a store, he would find the best-seller ranking with books from the same five or six authors displayed on tables. He said these were the same authors who had been on the tables for some 20 years. “Good authors, but literally the same ones” who are churning out books every six months or so, he said.
“If you apply those same principles of homogeneity across all of your sections, you really end up with something terrible. And because it’s terrible, you don’t sell very much and your sales drop,” he said.
As a result of lower book sales, Barnes & Noble moved into other categories to compensate for its shortfall, which it did not.
The Daunt model calls for turning over bookstore decisions to the managers and associates who engage daily with customers and share their love of reading. This approach means that experiences are tailored by the community, making Barnes & Noble the local bookstore.
Barnes & Noble hasn’t shelved all sensible retailing principles. The retailer recently joined Amazon.com, Walmart and others in launching an annual $39.99 subscription plan. Members receive 10 percent discounts on purchases, free shipping of online orders, rebates based on purchases, bigger lattes and a free tote, reports The Wall Street Journal.
The chain also offers a free option whereby members earn a virtual stamp for every $10 spent in stores or online. Members receive a $5 credit for a future purchase once they have ten stamps.
BrainTrust
Kevin Graff
President, Graff Retail
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Discussion Questions
DISCUSSION QUESTIONS: Do you agree that sensible retailing principles lead to boring bookstores? Would other chain retailers benefit from breaking away from homogenous store experiences?
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The “sensible” retail principles were not actually sensible for bookstores and, as a master bookseller, James Daunt knows this better than anyone. Traditionally, the offer in big chain bookstores has been driven by publishers: they pay stores to promote and display certain books they want to push. This leads to uniformity and blandness. It also means that what’s being promoted does not always align with customer demand — particularly as tastes can vary from location to location. James Daunt broke this model and allowed store staff, who understand their customers, to decide what books to display and push. Unsurprisingly, the result has been an improvement in satisfaction and a recovery of bookstores as a place to discover and browse.
Localization is a key to successful bookstore retailing. (A “boring principle” like ease of navigation may not matter as much in a business devoted to browsing and extended visits.) Barnes & Noble is applying the mindset of independent bookstores to its culture, and the empowerment of local managers is making a difference.
I’m not convinced there is anything sensible about homogenous assortments in every store. People in every community have unique tastes, preferences and experiences. As such, it follows (at least to me) that sensible retailing means aligning your assortments and offers to the community each store serves. I applaud the work done by Barnes & Noble and am not at all surprised to see it paying dividends for them.
Leaving the same authors on feature tables for 20 years makes about as much sense as leaving the same fashion on the racks for 20 years. An apparel retailer who did that would go bankrupt in two years, not 20. I was in a bookstore yesterday that has been open in the same location since 1876. (Vroman’s in Pasadena CA.) Talk about treasure hunt. The range of authors and topics was amazing. And the attached boutique coffee shop was jammed with people reading real live books. Turning pages rather than scrolling through their phone. Wonderful!
This topic was enthusiastically examined on a LinkedIn discussion recently. The bookstore is for book lovers and readers. The stores should be a bit of a treasure hunt for them. Localization is a de facto requirement of almost all retail and bookstores are less of an exception than other retail categories. Mr. Daunt appears to have this one all figured out.
Bookstores thrive on the concept of discovery, hence the need to toss out so many of the black-and-white retail rules. Getting lost in a bookstore, roaming the aisles, and discovering books and products you didn’t even consider before is a great experience.
More retailers need to look at how they can shake up the merchandising approach. Take the pharmacy for example. Yes, there is a good argument for consistent merchandising. But think about how most customers shop by “ailment.” If someone is suffering from arthritis, they would currently need to visit two or three aisles to find what they need for treatment and relief. But if you created sections in the store based on “ailments,” the customer experience (and sales) would increase significantly.
Shake up what used to work, keep what still does, and reinvent the rest.
I don’t know if sensible retailing principles, whatever that means, lead to Barnes & Nobles’ woes, but common merchandising strategies are still in play at the new prototype store near my house.
This store is beautiful, the fixtures are cool — I love the semi-circular bookcases that feel like you are getting a hug while browsing — and the cafe and reading areas are comfy. Speed bump tables throughout the sales floor are now stacked with new books, replacing the half-off coffee table books they used to house.
I love books, so I have always been a fan of Barnes & Noble, no matter what the stores looked like, but I shop this new version more often.
Retail is a game of discovery. It does not sound like Mr. Daunt has done anything but play the game better. Kudos.
Localized assortments, neighborhood-centric store experiences? This is not just for bookstores. No one likes a boring store, even for essential household items.
Localization and personalization is the fastest path to incremental sales growth. Kudos to B&N for showing the way on this.
In retail, store localization efforts and chain efficiencies often butt heads. Each retail category and format has its trade-offs; reducing the strategic choices to either “boring” or exciting makes for good copy but doesn’t materially contribute to advancing retailing.
Retailing used to be a simple business but now it is all about customer personalization, technology stacks and data, etc. “Barnes & Noble” implemented a new business model with a focus on learning about its customers, aligning the assortment with customer demand and localizing the selection at every location.
Starbucks has implemented same approach — it formulates the menu to fit the needs of the locals without compromising the signature brand, and has an innovative store design adapted to the culture of the location.
Sensible retailing principles are only boring if you make them so. I agree with consistency, but there is also a place for special promotions, clever sales, local promotions, and other innovative ideas to enhance the already good experience. And there is nothing wrong with trying new ideas. If they work, scale them to other stores. If they don’t, move on.
I’m with those who like the adventure of browsing through a bookstore. That experience opens up the possibilities of future reading pleasure and sales for the store. So the new approach for Barnes & Noble feeds into that delight/win-win. I may be mistaken but I think TJMaxx does the same thing. I walk into that store for the joy of finding something I wasn’t planning for. The different placement of categories within stores, from day to day and from store to store, keeps me engaged and purchasing.
Bookstores have evolved from the original concept of lots of rows of stacked books with the wording, “If you want to read a book you must buy it first.” Borders and Barnes & Noble changed the paradigm with reading areas, refreshments and other interactive elements. Next came Amazon who changed the paradigm again with the Kindle and instant access. Bricks & mortar book stores barely evolved which led to their downfall. All retail is local and Mr. Daunt seems to understand this formula.
I completely agree. How many James Patterson novels can one read? Okay a lot, but this lack of “curation” is why independent book stores (kind of) thrive. Regarding other formats following a similar path, some of them do — go into a Nordstrom store in Los Angeles and then visit the one in Durham NC … the one in Durham does not have as many labels available, because someone made a decision that most people who shop at Nordstrom’s in Durham drive in from Mayberry … okay this is a case where the selection was not accurate, however I would like to see more individuality at chains based on local management and the zip code the store is in.
The issue here is whether buying books is a “want” or a “need.” The type of sensible retailing described by James Daunt may make sense for a grocery store (think about walking into one Kroger vs another — you probably want to find the chicken stock in the same aisle every time, but don’t mind seeing different fresh food specials in the center of the store) here consumers are buying “needs” and value the consistency. For a bookstore, where consumers are shopping (and buying) “wants” — specifically “wants” that will entertain them, help them escape, and otherwise deliver a unique (and special) experience. That’s not the same as the sensible retailing approach!
Retailers have an opportunity provide an outstanding customer experience by executing against key performance indicators as well as being flexible to feel like part of the local community. There are a few key actions and outcomes that are critical for retailers to satisfy their customers. First, the customer needs to feel that they were able to come into the retailer and feel accomplished in finding the product and information they are needing. Second, the customer needs to leave the retailer feeling successful in their visit. And third, the customer wants to be able to get in and get out on their timeline, without feeling that the experience took longer than they wanted or not feeling that they received the level of service they needed. In this context, retailers have the opportunity to operate at an exceptional level, while also meeting local customers’ specific wants and needs.
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The “sensible” retail principles were not actually sensible for bookstores and, as a master bookseller, James Daunt knows this better than anyone. Traditionally, the offer in big chain bookstores has been driven by publishers: they pay stores to promote and display certain books they want to push. This leads to uniformity and blandness. It also means that what’s being promoted does not always align with customer demand — particularly as tastes can vary from location to location. James Daunt broke this model and allowed store staff, who understand their customers, to decide what books to display and push. Unsurprisingly, the result has been an improvement in satisfaction and a recovery of bookstores as a place to discover and browse.
Localization is a key to successful bookstore retailing. (A “boring principle” like ease of navigation may not matter as much in a business devoted to browsing and extended visits.) Barnes & Noble is applying the mindset of independent bookstores to its culture, and the empowerment of local managers is making a difference.
I’m not convinced there is anything sensible about homogenous assortments in every store. People in every community have unique tastes, preferences and experiences. As such, it follows (at least to me) that sensible retailing means aligning your assortments and offers to the community each store serves. I applaud the work done by Barnes & Noble and am not at all surprised to see it paying dividends for them.
Leaving the same authors on feature tables for 20 years makes about as much sense as leaving the same fashion on the racks for 20 years. An apparel retailer who did that would go bankrupt in two years, not 20. I was in a bookstore yesterday that has been open in the same location since 1876. (Vroman’s in Pasadena CA.) Talk about treasure hunt. The range of authors and topics was amazing. And the attached boutique coffee shop was jammed with people reading real live books. Turning pages rather than scrolling through their phone. Wonderful!
This topic was enthusiastically examined on a LinkedIn discussion recently. The bookstore is for book lovers and readers. The stores should be a bit of a treasure hunt for them. Localization is a de facto requirement of almost all retail and bookstores are less of an exception than other retail categories. Mr. Daunt appears to have this one all figured out.
Bookstores thrive on the concept of discovery, hence the need to toss out so many of the black-and-white retail rules. Getting lost in a bookstore, roaming the aisles, and discovering books and products you didn’t even consider before is a great experience.
More retailers need to look at how they can shake up the merchandising approach. Take the pharmacy for example. Yes, there is a good argument for consistent merchandising. But think about how most customers shop by “ailment.” If someone is suffering from arthritis, they would currently need to visit two or three aisles to find what they need for treatment and relief. But if you created sections in the store based on “ailments,” the customer experience (and sales) would increase significantly.
Shake up what used to work, keep what still does, and reinvent the rest.
I don’t know if sensible retailing principles, whatever that means, lead to Barnes & Nobles’ woes, but common merchandising strategies are still in play at the new prototype store near my house.
This store is beautiful, the fixtures are cool — I love the semi-circular bookcases that feel like you are getting a hug while browsing — and the cafe and reading areas are comfy. Speed bump tables throughout the sales floor are now stacked with new books, replacing the half-off coffee table books they used to house.
I love books, so I have always been a fan of Barnes & Noble, no matter what the stores looked like, but I shop this new version more often.
Retail is a game of discovery. It does not sound like Mr. Daunt has done anything but play the game better. Kudos.
Localized assortments, neighborhood-centric store experiences? This is not just for bookstores. No one likes a boring store, even for essential household items.
Localization and personalization is the fastest path to incremental sales growth. Kudos to B&N for showing the way on this.
In retail, store localization efforts and chain efficiencies often butt heads. Each retail category and format has its trade-offs; reducing the strategic choices to either “boring” or exciting makes for good copy but doesn’t materially contribute to advancing retailing.
Retailing used to be a simple business but now it is all about customer personalization, technology stacks and data, etc. “Barnes & Noble” implemented a new business model with a focus on learning about its customers, aligning the assortment with customer demand and localizing the selection at every location.
Starbucks has implemented same approach — it formulates the menu to fit the needs of the locals without compromising the signature brand, and has an innovative store design adapted to the culture of the location.
Sensible retailing principles are only boring if you make them so. I agree with consistency, but there is also a place for special promotions, clever sales, local promotions, and other innovative ideas to enhance the already good experience. And there is nothing wrong with trying new ideas. If they work, scale them to other stores. If they don’t, move on.
I’m with those who like the adventure of browsing through a bookstore. That experience opens up the possibilities of future reading pleasure and sales for the store. So the new approach for Barnes & Noble feeds into that delight/win-win. I may be mistaken but I think TJMaxx does the same thing. I walk into that store for the joy of finding something I wasn’t planning for. The different placement of categories within stores, from day to day and from store to store, keeps me engaged and purchasing.
Bookstores have evolved from the original concept of lots of rows of stacked books with the wording, “If you want to read a book you must buy it first.” Borders and Barnes & Noble changed the paradigm with reading areas, refreshments and other interactive elements. Next came Amazon who changed the paradigm again with the Kindle and instant access. Bricks & mortar book stores barely evolved which led to their downfall. All retail is local and Mr. Daunt seems to understand this formula.
I completely agree. How many James Patterson novels can one read? Okay a lot, but this lack of “curation” is why independent book stores (kind of) thrive. Regarding other formats following a similar path, some of them do — go into a Nordstrom store in Los Angeles and then visit the one in Durham NC … the one in Durham does not have as many labels available, because someone made a decision that most people who shop at Nordstrom’s in Durham drive in from Mayberry … okay this is a case where the selection was not accurate, however I would like to see more individuality at chains based on local management and the zip code the store is in.
The issue here is whether buying books is a “want” or a “need.” The type of sensible retailing described by James Daunt may make sense for a grocery store (think about walking into one Kroger vs another — you probably want to find the chicken stock in the same aisle every time, but don’t mind seeing different fresh food specials in the center of the store) here consumers are buying “needs” and value the consistency. For a bookstore, where consumers are shopping (and buying) “wants” — specifically “wants” that will entertain them, help them escape, and otherwise deliver a unique (and special) experience. That’s not the same as the sensible retailing approach!
Retailers have an opportunity provide an outstanding customer experience by executing against key performance indicators as well as being flexible to feel like part of the local community. There are a few key actions and outcomes that are critical for retailers to satisfy their customers. First, the customer needs to feel that they were able to come into the retailer and feel accomplished in finding the product and information they are needing. Second, the customer needs to leave the retailer feeling successful in their visit. And third, the customer wants to be able to get in and get out on their timeline, without feeling that the experience took longer than they wanted or not feeling that they received the level of service they needed. In this context, retailers have the opportunity to operate at an exceptional level, while also meeting local customers’ specific wants and needs.