If there's one area of retail that was particuarly disrupted by the digital revolution 20 years ago, it was bookselling. Given the ecommerce behemoth that it has become, it's easy to forget that Amazon was first-and-foremost an online bookseller when it emerged. And it forever changed book retailing.
But in a fascinating about-turn, as 2023 begins we are seeing many digital platforms struggling - while a 137-year-old book retailer is flourishing once more.
Indeed, while the likes of Facebook, Netflix and Twitter are in turmoil, and even Amazon itself is shedding jobs, Barnes & Noble is profitable and growing - recently announcing plans to open 30 new stores. So what's going on?
The Barnes & Noble horror story
A brilliant article by critic and historian Ted Gioia has examined how Barnes & Noble has turned around its fortunes, concluding that a renewed focus on the customer and the products have been the reinvigorating factors.
And it really has been a spectacular turnaround in fortunes. The company was paralysed by the digital age, and even as fellow bricks-and-mortar rivals such as Borders collapsed, Barnes & Noble was still unable to regain momentum and find a strategy that could keep it competitive as ecommerce asserted its dominance.
Amongst its many attempts to revive its fortunes was the introduction of areas in-store dedicated to selling toys, cards and calendars. ("Do people really go toy shopping at a bookstore?" ponders Gioia. "Toys R Us also filed for bankruptcy in 2018, and if they couldn’t compete with Amazon, how could B&N hope to do any better?")
B&N also started installing cafes inside stores and then, in a particularly desperate roll of the dice, decided to launch freestanding restaurants, branded as Barnes & Noble Kitchen. This, too, failed to gain any traction amongst consumers, with company chairman Leonard Riggio conceding: “I have no experience in the hospitality area... Things like controlling food costs and payroll costs are not in our DNA. So [it’s] a lot harder than you think it is."
Even its apparently sensible attempts to capitalise on digital consumer preferences were caught in the company's downward spiral - with its Nook ebook reader seeing a 90% decline in sales.
In 2018, Barnes & Noble made a loss of $18 million, resulting in a drop in share price of over 80% and around 1,800 redundancies.
Breaking the rules of book retailing
At this point, if Barnes & Noble was a book, it would be a horror story. But incredibly, there is a twist in the tale. And it is heralded by the hiring of a new boss - John Daunt.
Daunt had successfully turned around the fortunes of British book retail chain Waterstones, and had garnered reputation for breaking the rules of bookselling.
For a start, he refused to discount his books, despite the fierce price competition in the market. As Gioia notes: "If you asked him why, he had a simple answer: 'I don’t think books are overpriced.'"
But the most revolutionary thing that Daunt did at Waterstones was to refuse to take promotional money from publishers. For those unacquainted with the dark arts of the publishing / book retail game, publishers give retailers promotional money in exchange for purchase commitments and prominent placement in stores and shop windows. Often books will be aggressively pushed in a bid to drive a book onto the best-seller lists, regardless of its quality.
"Everybody wins. Except maybe the reader," says Gioia. But Daunt refused to play this game.
