Memo: To the New CEO of Barnes & Noble

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Shawn Rossi, “Barnes & Noble” [CC BY 2.0] via Flickr

Last week, Elliott Management agreed to buy Barnes & Noble for $683 million. Elliott owns Waterstones in the UK, with James Daunt as its CEO. He would become CEO of Barnes & Noble. Many hailed this move because under Daunt, Waterstone’s has experienced a significant turnaround, and Daunt came up through the ranks as a bookseller and has spoken about reclaiming the “honourable profession” of bookselling. The picture became a bit murkier when Readerlink announced that it is pursuing a counteroffer to that of Elliott Management. Readerlink supplies books to retail outlets like Walmart and Target. If deeds done may predict the future, I think most booklovers would appreciate the approach of Daunt and Elliott Management to Readerlink. Many think Barnes & Noble has already suffered as it has been “Walmart-ized.”

I asked the question at my Bob on Books Facebook page of what advice my followers would give the new CEO at Barnes & Noble, either Daunt or someone else. The page has a number of dedicated readers, and they gave a dedicated response. Here are some of the areas they commented on:

The “vibe” of the store: People like the comfortable atmosphere, want to keep the coffee shop, and would like stores to offer more comfortable seating.

The bookseller: This was one of the most significant areas where a number noted decline. In earlier years, people found the booksellers interesting to talk to and knowledgeable. Some noted that in recent years, the booksellers have been replaced by fewer, and more part-time people, still trying to be helpful and polite, but under more pressure. Hopefully the new CEO will realize that the greatest asset in these stores that set them apart from online sellers is the bookseller and allocate funds accordingly. What makes every successful indie successful are booksellers who love books, and cater to readers who love and want to buy books.

Selection:  Readers lamented the declines they’ve seen in the selection of books, particularly in the area of fiction. One reader offered this example: “The fiction selection there is horrible now. For example, if you’re looking for Herman Melville, you’ll get several editions of Moby Dick, but no Typee, Billy Budd, etc.” Another reader said, “In short, try to appeal to a more discerning crowd instead of all the formulaic, mainstream crap.” Some would like more international periodicals and newspapers as well. Several readers made the point one reader made succinctly: “More books, less toys.” (However one reader pointed out that educators find the toys and games section an important part of the shopping experience.) One reader suggested QR codes on shelves to link readers to the Barnes & Noble website for other books by an author, or similar books, a feature that might discourage them from “showrooming” with that online retailer.

Price: Most readers are aware of how retail sales of new books are critical to supporting authors. However price is an issue, especially for those who read many books. At $30 or more for a hardcover, new books are out of reach for some, who choose the library or second-hand stores and charity sales instead. But people don’t want Barnes & Noble to become a Walmart of books: low prices on a limited, mainstream selection. One wonders if a discount could be scaled to the number of books or amount spent by a customer a year.

Promotions and partnerships: People would like to see promotions to bring people into the store, whether a free beverage each month or occasional BIG booksales to draw in the community. Other readers suggest partnerships with schools and libraries, particularly in communities distant from a Barnes & Noble store (in many cases from any bookstore).

I was surprised by how many people love their Barnes & Noble store (I do too). They want to keep them open and see them do better. My sense is that they want to encounter a store run by passionate booklovers for booklovers, a store with an interesting and diverse selection, and one where the feeling is, “make yourself comfortable and stay awhile.” Is that so hard?

 

 

The State of Book Selling 2016

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Amazon’s first brick and mortar store

Yesterday I wrote about the trends of print and e-book sales and the future of both media and suggested that both will continue to be with us. I touched as well on textbooks and preferred media for these, indicating that students continue to favor print, and for good reason.

What does all this mean for book selling? It is interesting that indie bookstores reported a 4.7 percent gain in revenue this past year.It seems that “buy local” programs in many cities have contributed to this sales growth. Publishers Weekly reports that 60 new indie stores opened in 2015, continuing a trend from 2014 when 59 new stores opened. I’ve observed a trend of local booksellers becoming increasingly savvy at cultivating clientele, and making their stores attractive “third places” through author readings, book and writing groups, coffee and wine bars, and attention to service. Still, they struggle with obtaining credit for business expansion and also pricing practices that favor the large buyers.

This may be a crazy idea, but given that e-books will continue to be with us, I wonder if there might be a way people could purchase e-books through indie bookstores. If stores serve as a showroom for books, might there be a way they can benefit from e-book sales when people prefer this format? This means either a competitive alternative to Apple and Amazon, or some arrangement with these online sellers. One advantage of the latter would be a chance to support rather than compete with “buy local” movements. Probably won’t happen.

Barnes and Noble also showed a slight increase in profit with print and college sales offsetting losses in their Nook market. But this chain continues to retrench and it is facing a new challenge with Amazon opening its first brick and mortar store in Seattle and rumored to be planning additional openings. It will be interesting to see how “brick and mortar” Amazon competes with online Amazon!

What has been less covered but may be equally significant for Barnes and Noble is that Amazon has begun opening Campus Pick-up Points at various universities including UC Berkeley, UC Santa Barbara, University of Cincinnati, Purdue University, and University of Massachusetts at Amherst. For now these simply serve as a pick up point for students ordering textbooks who may have difficulties receiving them at campus addresses. They also offer faster delivery of orders for Amazon Prime or Amazon Student members. This could be a serious challenge to Barnes and Noble as well. Nearly 30% of their revenues are in college sales.

As with the books we buy, where we buy them and in what form will continue to shape this industry going forward. The question of how important the physical community in which we do commerce is to the kinds of lives we want to lead will have a big part in determining the mix of local independent merchants, large retail concerns, and online sellers in our future.

And Then There is The Big Box Bookstore

I wrote yesterday about my visit to a wonderful little independent used and antiquarian bookstore. As it happens, I also had a chance to visit our nearby Barnes and Noble store, incentivized by a 20% coupon I’d received by email. Turns out I was able to score a copy of Capital by Thomas Piketty (my BIG summer reading project) at under $20 (retailed at $40) using my Barnes and Noble membership, the coupon, and the discounted price they were selling it at. Perhaps they knew that sooner or later potential readers would figure out this is a LONG book even if it is a best-seller.

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It is interesting to reflect on how my experience compared to my visit to the Indie bookstore. Both certainly offered the experience of browsing long aisles of books and discovering books of interest I was unaware of. Barnes and Noble occupies far more space of course, and one of the big differences is no floor to ceiling bookcases and much wider aisles. There was no Norman in the basement lovingly preparing books for the shelves because there was no basement.

Still, the booksellers were friendly and I was asked if I needed any help. So were the people at checkout, but with a big difference. It was all very inefficient, and impersonal. No one knew any names. The customers by and large didn’t know the booksellers or each other. I suppose there are times we want it that way. But the feeling was, as I reflect on it, that this was just a big box store for books and media–and pastries.

Our local Barnes and Noble.

Our local Barnes and Noble. Picture from B& N website: http://store-locator.barnesandnoble.com/store/1968

That was the other thing. At checkout, we were given a coupon for $10 off cheesecake from their cafe’. And we were really encouraged to go buy one. So we wandered over, only to find out that the starting price was $40. We didn’t need cheesecake that badly. But we were given plenty of reasons why we could need it. It was plain that they really wanted to sell us a cheesecake.

It was interesting that the greatest effort to engage me as a customer in a bookstore was to try to sell me a cheesecake. In the other store, what they cared about were what kind of books I was interested in. It is fascinating that there is something of a resurgence in the Indie stores, at least according to this Salon piece. What I wonder is whether this season of discontent with Amazon over its treatment of Hachette might be an opportunity for Barnes and Noble stores to take a look at the Indie stores and how they might operate more as a “third place” than as a big box store for books, media and pastries. I don’t say ditch the pastries– a cup of coffee and a scone are wonderful adjuncts to leafing through newly purchased books! But thinking about how to make this like the neighborhood bookshop might be worthwhile as well.

What strikes me is that the Barnes and Noble booksellers I’ve met also know and love books. And my observation is that most of what people are actually buying in the stores are books. In the small Indie store I wrote about yesterday, they help foster a community of booklovers. It occurs to me that there are many members of the same tribe frequenting Barnes and Noble–and working there. I can’t help wondering if working on that connection could make Barnes and Nobles a more enjoyable place for booksellers and customers alike. And I can’t help wondering if it would enhance sales. I could be totally out to lunch here. What I do know, and maybe this is a function of age, is that I am increasingly attracted to the places where that connection happens.

What do you think? What do you value most about going to a brick and mortar bookstore?

So Who Will Help Barnes & Noble?

James Patterson captured a great deal of attention in the book store world as he announced his intent to give away $1 million dollars to a variety of independent bookstores. A PW Daily story chronicles the first round of these grants, totalling $267,000, given after he meticulously reviewed grant requests.

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The question is, what knight in shining armor is out there to bail out bookstore giant Barnes & Noble? They just announced a 10% drop in revenues during the third quarter. They say  EBITDA (earnings before interest, taxes, depreciation and amortization) increased from $59 to $173 million over this period, but many consider EBITDA a clever accounting ploy to dress up a balance sheet. Revenues dropped in retail (including BN.com), college, and e-book and Nook sales. Were it not for draconian cuts in the Nook division (with more reportedly to come), things would have been even worse.

This is troubling news to me. In our market (Columbus, Ohio) they are the only significant retail outlet left, apart from some small indie stores with limited selections (none near us), grocery stores marketing the bestsellers, and a healthy segment of second hand stores. We’ve often been helped by book and media sellers when we have visited their stores. Sometimes that in-person assistance is far easier than searching around online when you have an idea of what you want but don’t have a particular title you are looking for.

For so many, this is just a market and convenience driven thing. Amazon is so easy to order from when you have a good idea of what you are looking for. E-books are incredibly easy to download and nobody beats Amazon’s selection, although I’m told by many that the Nook is actually a better reading device and doesn’t confine people to the proprietary format Amazon uses. Sadly, many thought Sony’s Betamax a better video format as well.

I suspect we are at a cultural tipping point. Patterson is helping indie operators attempt to innovate to stay in business. I actually wonder if some of these will survive longer than B & N, because they will figure out how to market to, attract, and serve a loyal clientele who still enjoy hanging around physical bookstores and value the service of booksellers and will pay for that privilege. I wonder if B & N needs to take a hard look at which stores in their operation are achieving this same kind of customer loyalty and both learn from them and figure out what the demographics are that make this work.

What troubles me is what will Amazon become if they face no serious competition? What I wonder sometimes is if one of the other new media giants like Google or Apple (I’m not convinced Microsoft is nimble enough) might join forces with Barnes and Noble. Apple has actually figured out how to use brick and mortar outlets to sell its products. It scares me at the same time to write this for fear of whether they might preserve physical book stores, but in some very new iteration alien to many of us.

What I wonder above all is that in turning so much of our commerce over to the virtual world, will we lose the physical spaces that add a richness to life and exchange them for our personal caves with our electronic devices that connect us to this brave new world?