Why Barnes & Noble Is Copying Local Bookstores It Once Threatened | WSJ The Economics Of

Summary

Barnes & Noble, once a giant in the bookstore industry, is shifting its strategy to compete with online retailers like Amazon. By downsizing stores and allowing individual locations more autonomy, the company aims to cater to local tastes and enhance the in-store experience. This approach reflects a move from the cookie-cutter model to more tailored, dynamic bookstores. The company has found success in adapting to local preferences, like focusing on romance, Black authors, and manga, leading to an increase in book sales and a plan to open more stores in 2023.

Takeaways

• 😀 Barnes & Noble has downsized its Pikesville, Maryland store, reducing its space by more than half and moving across the street to a smaller location tailored to local tastes.
• 😀 The company is shifting its approach by adopting strategies similar to independent bookstores it once competed with, focusing on local customization.
• 😀 Barnes & Noble's new strategy includes offering a more personalized book selection that is specific to the preferences of each store’s customers.
• 😀 The store layout has been reimagined to feel less like a supermarket and more like a maze, enhancing the in-store experience.
• 😀 Each Barnes & Noble store now has more autonomy in choosing books to order and how to display them, reflecting the preferences of its local customer base.
• 😀 In Pikesville, Maryland, the store manager strategically highlights popular genres like romance and books by Black authors to cater to local interests.
• 😀 The company listens to its store managers for wider trends, as seen with the dramatic increase in demand for manga books, which led to a significant expansion in the selection offered in stores.
• 😀 Barnes & Noble's shift towards a more localized, community-driven strategy is inspired by the success of James Daunt's leadership at British retailer Waterstones, where a similar strategy reversed the company's losses.
• 😀 Barnes & Noble has been able to implement this new strategy because of its willingness to give more control to individual store managers, although this comes with potential risks.
• 😀 For the first time in over a decade, Barnes & Noble is planning to open more stores than it closes in 2023, reflecting the success of the new strategy and the resurgence of book sales.

Q & A

What is Barnes & Noble's new strategy for its stores?

Barnes & Noble's new strategy focuses on tailoring each store to local tastes. The company is downsizing many locations and allowing individual store managers more autonomy in selecting books and displays based on their community's preferences.

How has Barnes & Noble adapted its store designs under the new strategy?

The new store designs are smaller and more dynamic, moving away from the previous 'cookie-cutter' look. Stores are now reconfigured to feel less like a supermarket aisle and more like a maze, providing a more engaging in-store experience.

Why did Barnes & Noble transition from the large superstore model?

The company shifted away from large superstores due to the digital threat posed by Amazon and the high costs of maintaining such vast spaces. Smaller, more localized stores are believed to offer a better shopping experience and cater to community preferences.

How does Barnes & Noble select which books to stock at each location?

Each store has more autonomy to choose the books they stock, based on the preferences of their local customers. For example, a store in Pikesville, Maryland, focuses on romance novels, books by Black authors, and fiction, reflecting the interests of its community.

How does Barnes & Noble’s new strategy compare to independent bookstores?

Barnes & Noble is adopting a strategy similar to that of independent bookstores, which it previously outcompeted. The company now allows stores to operate with more independence and adapt to the specific tastes of their local communities, much like independent bookstores do.

What is the role of store managers under the new Barnes & Noble model?

Store managers play a crucial role in the new model. They have the freedom to decide which books to order, how to display them, and which promotions to run. This autonomy allows them to create a more personalized and relevant experience for customers.

Why did Barnes & Noble focus on improving the in-store shopping experience?

The company aims to emphasize the unique aspects of in-person shopping, such as browsing book covers, reading flaps, and receiving recommendations from knowledgeable staff, which online shopping cannot replicate.

How did Barnes & Noble’s previous superstore model impact independent bookstores?

Barnes & Noble’s superstore model, with its vast selection and low prices, led to the closure of many independent bookstores, which couldn't compete with the company's scale and pricing strategies.

How has Barnes & Noble’s financial situation changed since the implementation of the new strategy?

Since implementing the new strategy, Barnes & Noble has experienced a shift in sales, with a higher percentage of revenue coming from books. The company has also planned to open more stores than it closes in 2023, marking a positive change after years of decline.

What role did James Daunt play in Barnes & Noble’s transformation?

James Daunt, who was appointed as CEO after Elliott Management acquired the company, implemented the new strategy of localized store operations. He had previously turned around the British bookstore chain Waterstones using a similar approach.