Photo: Canva
The New Barnes & Noble Is Your Hipster Next Door
It’s no surprise that Barnes & Noble has once again been feeling the heat of competition from Amazon. After all, Amazon started out as a bookseller and pushed Borders out of business in 2011.
Even with victory appearing all but in its grasp, Amazon tried to double down on its increasing dominance but eventually decided to shut down all 68 of its brick-and-mortar bookstores.
That leaves Barnes & Noble as the lone major brick-and-mortar retailer of books in the U.S.
According to NPR, “The book chain is planning to open some 30 new stores this year. Many are returning the retailer to areas it previously abandoned. In a few, Barnes & Noble is even taking over former Amazon bookshops.” They also note, “Barnes & Noble sales have been rising, and last year grew more than 4%, according to Shannon DeVito, director of books.”
But that doesn’t mean staying profitable and relevant is easy.
In December 2020, the Wall Street Journal reported that “Barnes & Noble has suffered seven years of declining revenue in the face of Amazon.com Inc.’s dominance in online retail. The pandemic crushed sales in big cities, with revenue down 50% at major metropolitan stores, as well as the in-store cafe business.” The then-newly appointed CEO, James Daunt, stated that “the very survival of bookstores is on the line.”
As a result, Daunt decided to do something that no retail expert could have predicted: grant more creative free rein to each Barnes & Noble location so that they can all cater to their local customers. In turn, this will allow each bookstore to independently function as more of an indie community bookstore than a corporate chain, according to the WSJ.
“By shifting control of the process to individual store managers across the country, Daunt is giving local booksellers permission to do things they were never able to do before,” the WSJ noted. “They have discretion over purchasing, placement and even pricing. He wants Barnes & Noble locations to feel welcoming but not overwhelming—a chain store should be more inviting and less intimidating than a truly independent shop—and that means he needs the people who run them to make sensible decisions for their markets.”
The CEO also hopes that this will encourage customers to spend more time enjoying their local Barnes & Noble, browsing and discovering other books and items they would not have found otherwise.
This reinvention of sorts began on the Upper West Side of Manhattan, where the retailer’s most iconic store “has been the site of a grand experiment for much of the past year. The chain invested millions of dollars to rebuild this Barnes & Noble into a model for its other stores to emulate as the company transforms into a bookseller for the modern age.”
The idea that corporate chains need to be cookie-cutter clones is being challenged. “Barnes & Noble used scale and uniformity to its benefit in the 1990s and 2000s, but those advantages have since become liabilities. Bookstores don’t have to be the same from one to another. They shouldn’t be, either. The best managers know the books they sell and the customers who buy them—and what works on the Upper West Side might not work in West Des Moines.”
On the other side of the coin, others are wary of this new strategic shift. The WSJ’s report points out how publishers fear this change “will translate into the nation’s largest chain purchasing fewer books. The managers of individual stores having more control over what they stock and how they price it means the publishers have less. Others in publishing are skeptical that local tastes matter as much in a business increasingly driven by national bestsellers.”
In New York specifically, there are plenty of successful indie bookshops brimming with personality and charm. One such owner, Dane Neller, the CEO of Shakespeare & Co., remarked how “an indie bookstore is always going to have that idiosyncratic, owner-operated feeling that you’re not going to get in a chain store.”
Daunt agreed but said there is a place for both types of bookstores. “A large store like this will always be much more and much less,” he stated. Even though they aren’t the same, indie bookstores and chains can still have some overlap. “Within a chain,” Daunt said, “you can create an awful lot of the ethos of an independent bookstore.”
Discussion Questions
DISCUSSION QUESTIONS: Is this local and community-influenced strategy something all chain retailers need to consider? Would Barnes & Noble be more successful if they focused on hosting more regular in-store events that genuinely invite more customers and unique experiences?
Poll
Loading …BrainTrust
Brian Cluster
Director of Industry Strategy - CPG & Retail, Stibo Systems
Cathy Hotka
Principal, Cathy Hotka & Associates
First, I do not agree that Amazon was the main reason Borders went under. Massive debt, too many stores, enormous flagship shops which were hideously expensive, a poor digital strategy and so forth, were all reasons for its demise.
However, there is no denying that Amazon has made the book category much more competitive and has exerted pressure on Barnes & Noble. The current reinvention of the chain seeks to rebalance this by doing what Amazon cannot. Amazon is a place to buy books; Barnes & Noble wants to be a place to browse and buy books. This means ditching the corporate standardization, doing away with sterile stores, being more sensitive to the needs of customers, and letting staff on the ground – who know their customers – make decisions about what to stock and how and where to display things. In other words, Barnes & Noble wants to become a chain of independent-style bookstores that offer something compelling to draw people in. This strategy has worked in the UK where Waterstones (a bookseller also run by Daunt) is profitable and has seen sales and the bottom line grow.
Barns & Noble have come through some very difficult times, so seeing progress is encouraging. While there is merit in having a more community-influenced store strategy, I don’t believe that this alone will put Barns & Noble on a significant growth path. The book retailing category has been permanently impacted by Amazon and so while in-store events may be a useful traffic stimulation strategy, it won’t lead to any meaningful change.
As a teenager, going to our community library, whether to browse and take out a few books, or to join others in group discussion was always a very positive experience. A librarian who truly took an interest in helping teenagers through group discussion made a big difference in the lives of kids, me included. If B&N can somehow capture that same feeling, one that gives patrons a sense of belonging, a sense of community – then the selling of books becomes a more natural experience that one cannot always get when ordering from Amazon. I love my kindle and through membership of the New York Public Library, I have access to millions of books, but I still love to wander through B&N and other book stores, and hope they never go away. Should other chains follow suit? Yes, just as Deli’s cater to a local crowd, why not chains?
Barnes & Noble’s “double down on local” strategy sounds like a winner. Congratulations on BN for its flexibility and vision, both of which will be necessary to evade Amazon’s onslaught.
Books are a more individualized and intimate purchase than most other categories so having a localized strategy that caters to the community makes a great deal of sense. When you think about the variability of many of the factors that make up a community relating to books & media, such as literacy rates, # of indie bookstores, politics, and other lifestyle preferences; it is logical to have local retail leaders help set the tone for books merchandised and programming that best cater to desired local target customers. The ongoing challenge will be to help maximize the benefits of the scale of their operation while still delivering a community approach.
I love the local first merchandising focus. There is still a void in the market for small bookshops that are deeply rooted in the community. B&N should focus there. Smaller footprints, relevant frequent events, community author displays and select curated gifting will create a surprise and delight environment that amazon cannot provide. I would also applaud the introduction of a pre-read section to encourage customers to bring back books and make them more affordable to other market segments. Perhaps try some “library” like services with a membership card. It is time for true out of the box thinking here.
“…a chain store should be more inviting and less intimidating than a truly independent shop…” What does that even mean? Mr. Daunt needs to visit a larger variety of independent booksellers. They are not all hipster hangouts. And a chain store can never lose all of its one size fits all homogenous look to truly fill an indie booksellers shoes.
The new Barnes & Noble stores are beautiful. Fixtures are cool, also smaller than stores of the past, and nicely merchandised. The tie-in to independent bookstores is the local flavor and solid staff recommendations, but that’s about it. And actually, the older model B&N stores offered these things as well, just in a larger, stuffier setting. Book signings and in-store events happened at both versions – Barnes & Noble has always done a good job connecting with the community.
I love an indie bookstore, but I also enjoy spending time (and too much money) at our new local Barnes & Noble. I don’t think the retail media gives them enough credit for what actually happens on the sales floor. B&N store teams have always worked hard to deliver local flavor.
Agreed the new Barnes & Noble stores are beautiful! I love the turnaround they’ve had in the past several years and their increased focus on local and letting store managers have more say in merchandising.
I believe books are a different animal than most retail formats, so giving creative freedom to the individual location more closely mirrors the clientele. This is a curated business with local depth and nuance that corporate can’t capture from afar. Book customers, especially younger ones, are looking for experiences. They can’t get the in-store book browsing experience online, and they don’t want to be able to walk into a chain store blindfolded and still find the book they already knew they wanted.
Amazon, built on book sales, closed all its stores. Even though Covid hit them hard, one critical failure point was probably also that it was too good at scaling up. Amazon is not known for giving much free reign to store management, and Barnes & Noble realized that that very empowerment could be its superpower. It’s also a good lesson for many retailers. Yes, you have the ability to make every store look and feel essentially the same. But is this what your customers actually want?
Localize at scale…!!! Sounds like an oxymoron, but looks like Barnes & Noble is about to give us all a master class in precisely that. With a strong brand promise and the right boundaries, local teams can indeed maximize regional relevance.
As Brian Cluster notes, “Books are a more individualized and intimate purchase…” Per today’s discussion, what sells in NYC might not sell in Des Moines. Hence, the localized strategy makes perfect sense.
If you have read me regularly, I am not a big fan of reboots. Rarely are they successful. I beleive this one has a chance. The key is the measure of corporate expectation. Don’t shoot too high. Think strategically. Focus on drawing customers for reasons other than buying books.
Personally, I love to browse bookstores, small or large. But rarely do I buy. If I discover something to read, I buy it on my Kindle. Funny, as a result, I haven’t bought a physical book from Amazon in years and years.
Consumers embrace familiarity, but are also drawn to novelty, which form a happy convergence in book stores for both Boomers rediscovering their love of books, and Gen Zs seeking IRL experiences as a break from digital screens. By ceding more power to each store location Barnes and Nobel has given their stores the ability to enmesh themselves into the fabric of each local community, giving loyalty inducing appeal to their customers. This store individuality aligns perfectly with the ability of every individual reader to select from an almost unlimited number of book genres. Book readers are rebels, and now Barnes and Noble stores can be too.
Barnes & Noble is taking a page from grocery stores — even those operating on a national scale have learned how to satisfy local preferences. Liberating the store managers to meet market demand is a good lesson to other chain retailers who place homogeneity above localization. It’s harder and arguably less efficient — but B&N is learning that the principle works.
Leaning into community and in-store events is a winning strategy for bookstores.
However, Barnes & Nobile would be wise to tap into digital trends. #BookTok is a huge trend-setting and sales-driving force that shouldn’t be ignored.
We interviewed an independent bookstore earlier this year, and leaning into BookTok to help inform product assortment and merchandising strategies really helped their sales.
One part of this discussion that I can’t ignore is: “a chain store should be more inviting and less intimidating than a truly independent shop.”
I am not sure what indie bookstores James Daunt has visited, but in my experience, indie shops are extremely inviting, cozy, and run by people who are passionate about their products. Indie bookstores typically know their communities best (because they are part of it) and are masterful with creative merchandising.
I said the same thing about chains vs. indie bookstores. Makes no sense.
I saw your comment after! Wild. Given the success indie booksellers have seen in recent years, you would think that Daunt would want to learn from them.
I really think this is merely a necessity because consumers have been going back into physical stores. Closing as many stores as B&N did was quite drastic, and I see this as a recalibration. For me, buying books actually ends up being more of an impulse, less-planned purchase because I realize I’m about to finish a book, or I need a gift. So, proximity and assortment dictate my choice, and I’d guess those two variables dictate most people’s shopping decisions. Fortunately my non-chain, local bookstore four doors down has great assortment so I can make purchases that align with both those habits and my values.
Every one of the panel members seems to feel this is a great move. I agree, but it will not work if they do not build a culture and systems, hire the right managers, and give them the tools, training, and freedom to do their jobs.
I have worked with plenty of national and international brands. One big strategy is personalization at scale. Customers’ different preferences and needs in cities, states, and regions must be addressed. For example, Ace Hardware stores sell a lot of snow shovels in Maine. Not so many in Miami. B&N is smart to take a local approach to its stores.
Barnes & Noble was historically one of my favorite stores to visit without the specific intent to buy an item. However, their outstanding visual merchandising, relevant title features, and in-store events usually meant that I rarely left the store without buying something.
The concept of local merchandising makes a lot of sense, provided that your local team has the training and expertise to pull it off. My local B&N store has gone downhill, generally and with regard to local merchandising specifically.
A great idea is only as good that the people who are charged with executing it and bringing a compelling customer experience to life in store.
Barnes and Noble has done a good job attracting Gen Z’ers to experience the tactile feel of book pages and reading for enjoyment. For those who want an escape from shopping mall traffic, in a safe and chill place, the vibes are good here.
Like a good independent grocery store focusing on curated products, a local offering and an experience, Barnes and Noble is capturing a good niche in retail.
I love browsing in bookstores! I always find something – and buy – unexpected and interesting in addition to what was on my list. I’m glad BN is taking the same approach as Waterstones to engage in a personal level with local readers.
Store managers at chain drug and regional grocery stores have long since had autonomy to opt in or out of national programs and to set their stores to drive local sales; why not managers of chain book stores? The world is a different place now. Every Barnes and Nobles has to sell books…because that’s what they do. Where is it written that all stores need to do it the exact same way? It’s smart and brave for Daunt to give store managers more creative freedom. He has everything to gain or, everything to lose either way. I am banking on the smarts of local store managers.