The Passive Guy recently shared a post by Jane Friedman on the future of Barnes & Noble; a topic you may remember from my earlier post, “How Amazon Destroyed Barnes & Noble.”
Quite frankly, Jane’s post made me sad. The latest chairman, James Daunt, is credited with saving UK’s famous bookstore, Waterstons. However, all you got to do is read the following quotes to understand that he really doesn’t get B&N – or books.
Early on, when Daunt was asked what he thought of Barnes & Noble on his last store visit, he said, “There were too many books,” by which he meant that featuring the right inventory is more important that stocking a big blur of titles. Back in 2015, he commented to Slate, “My faculties just shut down when I go in there.”
So… the big problem with a bookstore is that it has too many books.
And this gem:
Daunt loves the physical book, but he wants to give customers a digital option to get them into reading as an entry to physical books.
An entry. To physical books. Like, kids use digital books but us, highbrow grownups, know better. “Thank you, Amazon, B&N will stick to our guns and our lovely paper. No need for this new fandangled way of doing things.”
Sigh…
It’s all about the ROI
While Jane’s post almost made me despair, it was The Passive Guy’s commentary that I found most interesting. As he points out, in retrospect, Len Riggio picked a pretty good time to sell his controlling interest in Barnes & Noble. The bookstore chain is now owned by Elliot Management. Elliot says the following about itself:
There are a number of elements of the firm’s investment and risk-management activities that Elliott believes are essential to its goal of generating a consistent return to its investors. These elements include an opportunistic trading approach, the creation – not just the identification – of value, effective liquidity management, and managing operational and counterparty risk. The firm employs a value-added global investment approach.
What does Elliot think about its investment in Barnes & Noble based upon that statement?
The Passive Guy shared several possibilities:
- Elliot’s other investments and businesses may have been so badly damaged by the economic effects of widespread pandemic shutdowns that it has much more urgent issues to deal with than paying attention to or spending any money on Barnes & Noble. One possibility that comes to mind is that Elliot may have to sell itself to another company. Or divest itself of some of its major assets.
- Elliot may apply the greater fool theory and search for someone who will buy Barnes & Noble.
- Elliot may give James Daunt some time to see if Daunt has any book magic left that might work to bring Barnes & Noble back from the dead. Based on Daunt’s comments, that doesn’t look very likely to me.
- Elliot may require a huge cutback in the number of stores Barnes & Noble operates, keeping only stores in the most wealthy and book-loving locations and dumping the rest. Choosing this alternative might involve taking Barnes & Noble through a Chapter 11 bankruptcy proceeding.
What about the employees?
The Passive Guy then moved on to what may be an even more important question – what’s happened to the Barnes & Noble employees that were staffing the stores prior to the shutdown?
- How many experienced bookstore managers have retooled themselves or otherwise obtained other jobs? Other than an unknown number of managers who have been sitting around waiting for Barnes & Noble to reopen, how many managers will decide they like their new jobs more or feel more secure in their new jobs than their old jobs managing a Barnes & Noble store? Will those managers willing and able to return to Barnes & Noble be the best of Barnes & Noble’s managers, the worst, or something in-between?
- Most of the peons working at Barnes & Noble stores prior to shutdown have probably found something else to do, maybe something that pays more than they earned at Barnes & Noble. At a minimum, the managers of reopened Barnes & Noble stores will have a big job hiring and training a bunch of newbie employees to avoid driving away early customers who venture into the reopened stores.
And the customers?
And here is the final round. These crucial questions relate to Barnes & Noble customers:
Presumably, many regular purchasers of books who used to patronize Barnes & Noble and other physical book stores and who have not been subject to personal financial stress have continued to buy books.
Where have they purchased those books? Quite likely from Amazon.
Some percentage of those book buyers have likely become familiar with how to find books on Amazon and have enjoyed being able to order any book they like and having it delivered to them in one or two days. There may even be a small bit of satisfaction that arises from not having to pay the full retail price as they would if they had gone to a bookstore.
In its typical Amazonian fashion, the Big A has closely watched which books these new customers have purchased and started suggesting other books they might like. Perhaps the new Amazon customers have found some enjoyable new authors and their books via Amazon’s suggestions, including talented indie authors. Maybe Amazon’s suggestions have proven to be better than those they received when they asked a question of a clerk at Barnes & Noble.
One of Amazon’s largest competitive advantages over its online competitors is the extraordinary variety of ways that it helps its customers discover products they might like. There are lots of tools like Also Boughts and sub-sub-categories of books that let fans of Cowboy Science Fiction Romances find more of their favorite reads. Some book purchasers who have taken a deeper than normal dive into Amazon’s book section will become hooked. Amazon’s magic works for fishing lures, cooking utensils, and leaf blowers. It also works for books.
Jane’s post is titled, “Everyone wants Barnes & Noble to survive.” Based on what I read today, I’m worried.
I would miss Barnes and Noble if they went under although there is admittedly no Barnes and Noble book stores in the city where I currently live.
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Same here!
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Being English, I don’t know B&N, but I wonder if the stores are just simply too big? Economy of scale doesn’t always [to my untutored eye] always work, especially where a potential sale involves a selection process that is rather more complex than simply picking a tin of baked beans off a shelf. Also, the interest in, and, ideally, love for the product should extend all the way to the top of the food chain in these companies, rather than just seeing books as mere commodity units to produce a profit for the investors. You might guess I’m not much of a businessman 😉 Cheers, Jon.
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The moment you’re talking about the number of books being the problem in a bookstore, you know something’s going seriously wrong…
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Reblogged this on Wilfred Books and commented:
Are traditional big bookshop chains doomed?
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Reblogged this on Chris The Story Reading Ape's Blog.
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Reblogged this on Legends of Windemere.
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Sometimes it feels like Amazon and Facebook are in cahoots too. I look up a jigsaw puzzle or a face mask then I’m hit with ads on social media. As far as B&N goes, the one near me is still kicking and I try to go once a month. I think it is tougher to find things because you have to do a physical hunt instead of a virtual one. People don’t browse any more. That’s something that helps all stores since there’s a lot of money in impulse buys.
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Good point about browsing. As for Amazon and Facebook, I know that *Google* and Facebook are part of retargeting marketing (tracking where you go to show you the appropriate ads). Amazon is *not*, as it’s a bit of a black box. If that has changed, I’d be really curious to hear about it!
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Maybe a black box with a secret pipeline. I mean, you search for something on Amazon and then Facebook hits you with ads. Gotta be something connection there. Maybe Google is the middleman.
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Maybe. You sure you never searched for it on Google?
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Nope. Stuck to Amazon.
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Reblogged this on Jeanne Owens, author.
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I used to visit the Waterstone’s in Camden at least twice a month when I still lived in London. But the full retail price of hardbacks was already becoming hard to bear, and then the paperbacks started to rise in price too. The end for me was when they started to sell ‘gifts’ and trinkets in addition to books, and lost the whole concept of just being an old-school ‘bookshop’.
Best wishes, Pete.
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My feelings, exactly, Pete. We had Waterstones in Edinburgh, a couple of corners from where I lived. It was a great place to shop but it gradually became more gift shop than bookstore. The ridiculous prices didn’t help, either (especially for academic books).
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Yes, £25 for a popular hardback was beyond my limit then. And then they were asking almost £15 for the paperback. Small wonder Amazon ruined them.
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Exactly. Now, think up to £100 for some of the more expensive academic books… aimed at students – not exactly the richest of market segments!
Academic literature was (still is) ridiculously overpriced. At the time, most people ended up photocopying everything from friends. Then, instead of dropping prices to more reasonable levels, publishers demanded that the university library no longer let students photocopy academic books (!) It was a crazy situation.
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Fascinating, thanks for sharing.
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Glad you enjoyed it, Caron 🙂
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My cautious optimism about Daunt’s takeover has been greatly diminished. 😦
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My feelings exactly 😦
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Reblogged this on s a gibson.
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Reblogged this on Viv Drewa – The Owl Lady.
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Isn’t this ultimately a problem of misguided labour market policy? I love the term ‘labour market’. We now have several of them where people can offer themselves like prostitutes. Companies purchased by Private Equities – Really? Isn’t it more the case that people are covering up money, and for this purpose they founded these PE’s? 😉 – need cheap labour. This is provided by labour market policy. Cheap mass-produced goods – cheap reading material, no matter what quality – is also delivered. You only read because it is “in”, not because you are convinced of the quality of a book. In any case, it seems to be pushing it in this direction. ;-( Michael
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You may be on to something, Michael 😦
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;-( Lets wait a little bit. Somethings solves itself in a bette way. 😉 Enjoy your weekend, Nicholas.
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Wise words. Thank you, Michael! You too 🙂
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😉 Thank you, for the very kind words, Nicholas!
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I will say that the Waterstones book stores in England are wonderful. They’re all about books. I don’t recall seeing any toys there, unlike B&N over recent years. I’d be inclined to trust his judgment until proved otherwise.
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I’m so happy to hear that, Gabi! The Waterstones in Edinburgh had turned into a bit of a gift shop by the time we left (mind you, that was some time ago). I so hope you’re right 🙂
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I read this after coming back from Barnes & Noble (and purchasing a book) TODAY. BOOM!
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Lol – thanks for that, Sam!
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The question we’re asking here actually applies to a lot of the retail industry around the world. Are the customers permanently going to transition to online merchants, not just Amazon but WalMart, Target, and so forth? If so, then the million dollar question absolutely is “what about the jobs?”
Personally, I’m always aware that Amazon is herding me to buy more stuff, with the threat that I have to pay for shipping if I only get what I actually need. I don’t especially like that.
As to Barnes and Noble personally, it does sound like the current corporate ownership and leadership are not very conducive to success. You need book people to run a successful book store, and they don’t seem to be that.
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I agree with everything you’ve said, Deby. Interestingly enough, WalMart is now making a successful transition to digital themselves. That shows you they’re expecting the trend to digital orders to continue.
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This is eye opening and worrisome. I understand the this guy likes the smaller book store, but let’s be realistic. B&N has done a remarkable job of separating categories so customers don’t feel overwhelmed. And, they need to sell to all groups of readers. The whole concept of ebooks first, is counterproductive in a bookstore.
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I don’t think B&N is placing ebooks first. Indeed, part of the problem is that they don’t seem to have any kind of policy toward the digital market since abandoning Nook. I hope they succeed but worry that they’ve made too many mistakes.
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I see what you mean, Nicholas. Thank you.
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Great read! Thanks for sharing a fascinating post!
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Thanks, I’m so glad you liked it! I’ll be sharing shortly your “Parts Of A House With Names You Probably Didn’t Know” – an awesome resource for writers 🙂
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