The one where it’s on the books

Last month HMV sold Waterstones for £53m to a fund controlled by a Russian Billionaire (they are tiring of football clubs it seems) and this is either the best money ever spent or history may show the purchase of a sinking ship. Waterstones is profitable at present and people will not stop buying books but the world is changing….fast.

That evening I tweeted something along the lines of “Amazon is where I buy the books I need, Waterstones is where I find the books I want” and in the responses a few people made the comment that they find the books at Waterstones and then go home and buy them cheaper at Amazon. This lead to a healthy debate, which in summary went something like:

Side 1: Your model (of browsing but shopping cheaper) will become extinct

Side 2: They don’t offer me any greater service so why should I buy it?

Side 1: You are consuming their ‘service’ by going into their shop and availing yourself of their stock

Side 2: But the staff doesn’t help me or offer me anything more than I can get online

Side 1: Do you ask?

Side 2: I shouldn’t have to

Side 1: Do you go into a bar, wait in the middle and complain about not getting served?

Side 1: The margin erosion means there are less staff to serve you and they are just focussing on operating the shop

Side 2: But that’s not my problem

Side 1: What you are doing is the equivalent of walking into loads of bars tasting loads of drinks and not buying anything

…and so it went on (it was Friday evening so at times it was a little spirited and if the person involved is reading this apologies for an editorial licence I may have taken to make the point)

It ended amicably with the other person (Side 2) admitting it had provoked thought and me (Side 1) realising that the other side wasn’t to blame that actually it’s Waterstones (and other businesses in the same situation) who to use a line from ‘The Untouchables’ are taking a “knife to a gun fight”.

The internet has changed the world, no more so than for retailers who are competing with businesses that have very different (leaner) cost structures and can operate their “stores” without the joys of rent, rates, shop fit, staff, localised stock etc etc and it strikes me (and I am by no means (x1000) the first person to say this) competing on price with someone who has a dramatically lower cost base than you is setting course for extinction. The pureplay internet retailers (i.e. those with no stores) have become very smart at providing some of the value of an in-person shopping experience with user reviews being the clearest example of them really understanding their customer.

Consumers are price sensitive, there is no disputing that but I recently asked a room full of people what their favourite retail experience was and not one person’s answer involved price. 95% of the answers involved the people they were served by. To me Waterstones need to stop selling books and start creating a book buying experience – that walking into a Waterstones would be like going to your book club where people have opinions and are able to tell you what they think. Whilst no one is price insensitive it is not the only factor…

When the video revolution first took hold (I am showing my age) a video shop opened locally to my parents home which was independently run and staffed by people who had a vested interest in the shop and liked films. Going there was great because firstly they had “The Cheers Factor” (everyone knew my name) but secondly they shared their opinions when asked, “if you like X I imagine you will like this” or “It’s like X but faster paced”. That shop (for the moment) is a Blockbuster and the biggest focus is selling package deals of coke/sweets/popcorn…

I may be shockingly naive in the way I see this and Waterstones may already be trying to do this but unless they dramatically and consistently change the way their staff engage with customers they are allowing the consumer to make a decision that is purely based on cost and not helping others (like Side 2 on Twitter) see the value in shopping with other criteria in mind or more importantly see the value that a specialist book shop adds over the online alternative.

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4 Comments

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4 responses to “The one where it’s on the books

  1. In their defence their service is very individual and they did used to have personal recommendations from staff on the shelves. The only trouble is taste….

    You walk in to a sweet shop and you can work out what you like. If you are stuck and it’s an old fashioned shop you can try one from the jar. At worst the cost of the new choc bar is small and you’ll try it. Brand loyalty makes a big difference.

    Waterstones is like a sweet shop with so much variety on display but you can’t really get the taste for a book in the same way. There are recommendations; you can sit and read a chapter or so (even over a coffee) but it still may not be enough to buy there & then, if at all.

    So you are right that the experience needs to be great and differentiated. I’m just not sure how you do that without increasing your payroll AND also let people fulfil their taste in a way that is different to say Amazon. Ultimately its something you’ll have to pay for…. perhaps like the Harrods model maybe?

  2. Good post Rob. I have often had good customer service in Waterstones, where staff have given me recommendations when required and talked about the books in detail, or gone to the trouble of finding me a signed edition for the same price. Like you though, mostly I like to browse but would almost always buy the fruits of my browsing there and then rather than then going home to buy it on Amazon.

    I have a Kindle and like reading on that; I also find I have read more books in the couple of months since I have had it. But for all the online recommendations that can be found and personalised to you, that doesn’t replace the experience of mooching round a book store…I would miss that enormously if it no longer existed, particularly when buying gifts. I also really like taking my children into bookshops and letting them look at and feel the different books and make a choice which ones they want – somehow physical bookshops seem to have much more soul than their online counterparts, even though i know this to be illogical.

    I guess I like to do both: buy online for convenience and browse in shops when I have time. For how long we will be able to do that remains to be seen. Thanks for starting the discussion 😉

  3. Really good post!

    I saw an article today about WHSmith Travel posing the question “are they the UK’s best bookseller?” You may want to have a look…
    http://publishingperspectives.com/2011/06/whsmith-travel-uk-best-bookseller/

    In terms of your post, I agree with you. If I know what I want I tend to go to Amazon for it, especially work-type books, or books by authors that I know and like. On the other hand I don’t find it easy to “browse” Amazon in the same way I can in a place like Waterstones.

    It is true though that Waterstones is now dying on its feet rather like HMV, although not quite for the same reasons. I hope that James Daunt can manage to turn it around and keep it going so people like you and me can go in, browse, and find something that we know we’ll like…
    http://www.thebookseller.com/feature/future-waterstones.html

  4. Great post Rob.
    I still like the experience of walking into Waterstones or Foyles and spending a couple of hours browsing. I know I could buy them cheaper on amazon or other on-line store, but its not the same experience!

    Last week I was charged with buying a colleague’s leaving gift – I’d been told she liked to read and books would be a good idea. I did some probing and armed with her likes/dislikes I made my way to Waterstones in Piccadilly.
    I walked up to the Crime Fiction Dept and made a beeline to the counter: “Hi, I’m looking for xyx for a colleague. She likes abc…bla bla bla, can you help? ”
    Not only did I get a personalised tour of the department, within 10 mins I was carrying a pile of books all recommended by the store assistant, his knowledge and comments and requests from other customers.
    For the 1hr I spent in the store the same guy helped a few other customers in the same way, once going all the way to the store room looking for a book in particular.
    Would I have had the same experience on-line? Would defo have found books, but not had the same service!

    No doubt that more and more books will be downloaded or purchased on-line, but for the book buying experience (from browsing to customer service) I still favour the book store, Waterstones or Floyles!

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