What Lessons Can Be Learned From Barnes & Noble as It Competes Against Amazon and Other Booksellers?

Barnes & Noble has staged something of a miraculous comeback. In 2018, just seven short years ago, the company was staring down the prospect of a private sale, as Axios reported at the time. That sale was eventually finalized in the summer of the following year, with Elliott Management procuring the troubled brand and installing James Daunt as CEO.

Now, according to Modern Retail, the company's fortunes have taken a significant turnaround — and at least part of Barnes & Noble's successes in the interim can be laid at Daunt's feet.

Barnes & Noble Opening More Stores, Focusing on Local Markets and Employee Retention

The COVID-19 pandemic was particularly harsh to brick-and-mortar booksellers, especially with Barnes & Noble having operated so many of its locations out of shopping malls. During the pandemic era, foot traffic took a catastrophic hit, and a separate 2021 Modern Retail report underscored the damage done to the company as a result.

Following the conclusion of pandemic restrictions and a relative return to normality, Daunt was able to reorient the company on a variety of fronts, positioning Barnes & Noble for another kick at the proverbial can.

“The long and the short is that we have grown from 2019, so pre-Covid,” Daunt told Modern Retail in an interview. “We are hugely up in [the book category]. It’s just been fantastic.”

After a slew of store closures over the course of a decade, B&N opened 57 new locations across the U.S. last year, and the company projects up to 60 more store openings throughout 2025.

In a daring move, the CEO decided to opt out of previous arrangements wherein larger publishers would pay the company a premium to merchandise its titles in arrays near the front of the store and other high-visibility areas. While the immediate payoff was enticing, it also led to "cluttered stores with books that customers didn’t necessarily want to buy," driving return rates of unsold books returned to publishers up to a significant 30% before Daunt became CEO.

“I mean, it’s a big, big, big, big number. So that’s a bit terrifying,” Daunt said. “But it unlocks a dramatic cost saving on the other side. You don’t have to discount so much, so you’re not constantly just trying to get rid of stuff.”

Since instituting a change to locally curated displays and merchandising appropriate for each market, returns rates have declined to a much more manageable 7%. Further, Daunt has promoted a career-centric outlook for company employees, forgoing a part-time workforce with high turnover in favor of a promote-from-within framework where management figures are invested and properly remunerated.

"We’re shifting towards a career model where we have full-time booksellers who are invested in the business,” Daunt added.

Where Does Barnes & Noble Stand Versus Amazon and Other Booksellers?

Daunt was clear to point out that, in his view, Amazon was better at selling "boring" books such as technical manuals and similar texts — and also that due to its democratization of the publishing and reading business, it was contributing to the growth of the bookselling business more broadly.

Gesturing toward the fact that the American Booksellers Association (ABA) saw memberships tick upward by 11% in 2023, indicating that the business was healthy for Barnes & Noble and Amazon, as well as for independent booksellers, USA Today suggested a healthy and vibrant market in the segment, despite prevailing opinion over the fate of physical books and the stores that sell them. In fact, according to ABA figures, of the 291 bookstores that opened in 2023, 230 of these were brick-and-mortar operations.

There's something of a stark bifurcation between online book sales and physical book sales: As Research and Markets suggested in a November 2024 report, Amazon was responsible for "more than four-fifths of all revenue from books sold online," dominating that sales sector. And while it's difficult to pinpoint exact book sales figures from Amazon — the company keeps these cards close to its chest — Business Insider reported that, over the first 10 months of 2022, the company sold 456.5 million print books and 419.8 million digital books.

Daunt clearly doesn't see Amazon dominating the physical bookselling space, at least not according to a 2023 report from The Guardian.

“Amazon doesn’t care about books... a book is just another thing in a warehouse,” Daunt said. “Whereas bookstores are places of discovery. They’re just really nice spaces.”

The Accidental Marketer also appeared to agree with B&N's differentiation in this regard.

"To differentiate themselves, Barnes & Noble focused on creating an environment that provided the good opposite [sic] of what Amazon offered. They aimed to offer an experience that was intimate, personalized, and full of sensory delights. By embracing the opposite good, they carved a niche for themselves," the outlet explained.

Neil Saunders, managing director of GlobalData Retail and a member of RetailWire's BrainTrust, reinforced Daunt's approach to carving out a healthy market for B&N while also discussing how its business plan differed from that put forth by Amazon.

“The passion and understanding of the category is really important because James Daunt understands books,” Saunders said. “He has an intimate knowledge of how the category works and what the consumer wants.”

“Amazon recommendations are driven by an algorithm. That’s fine, and it works to a certain extent. But it doesn’t have the same personal touch as when you go into a Barnes & Noble, where you can receive a personal recommendation, and there are handwritten recommendation cards from members of staff who work in the store," Saunders added.

Daunt also mentioned his displeasure with B&N's current e-commerce strategy stateside, comparing it with his experience helming U.K.-based bookseller Waterstones.

“In the U.K., we’ve nailed the e-commerce side, but in the U.S., the platform is garbage,” Daunt admitted.

Whether Barnes & Noble will find room for expansion by refitting its e-commerce channel remains yet to be seen, but the company has clearly learned more than a few tricks over the past few years — lessons that have produced profits and a healthy market share.