Industry Focus: How Waterstones Survived Amazon & eBooks
I joined the Waterstones team at a Christmas temp in 2011 and in the following year, I saw Waterstones spend millions refurbishing its stores, losing a third of its shop staff and halving the stores managers. During the 2014/2015 term, I have observed increased sales in Waterstones, so when I viewed our financial figures and found out how low they were, I was surprised.
I decided to delve deeper and it was explained to me that the figures were after paying back a huge loss: they had risen from an extraordinary low.
There has been talk concerning the survival of the book industry for quite a while; it’s a question James Daunt is without doubt familiar with:
Q. How have you managed to keep Waterstones on the high street despite the e-book?
The e-book, James Daunt says, has its natural place: it can be appropriate for travel, for saving space, it’s important for green point of view, and the digital book is cheaper, making it a better finance choice.
Publishers recently took a stand against the digital price and withdrew their books from Amazon. The renegotiations, led by Hachette, Macmillan and Harper Collins, concluded in the publisher setting the online price which allows them to maintain the price at a level that doesn't distort the market in favour of the digital.
Q. What about the physical book? Are people still buying enough to keep the shop open, and why would they come into the shop if you can get it cheaper elsewhere?
“You have to make Waterstones and interesting and attractive shop,” James Daunt says, “so you make people come into them more, buy books and come back. If you sell better books, customers read them quicker and come back for more.”
An old system of organising books in the shop has been changed. The publishers used to pay a premium for their chosen books, Waterstones would present them exactly how the publishers dictated and all the shops looked the same.
James Daunt made a huge decision in changing this. It took away an incredible amount of Waterstones’ income, but now they can pick what's going to be displayed and what gets chosen for the Book Club and The Book of the Month.
Waterstones has the choice of what books to campaign. The shops are individualised to suit the market area and the bookseller is hand selling the books Waterstones decides on. It's organic.
I asked whether the publishers were unhappy about the change. James Daunt assured me that because the books Waterstones are choosing are selling well and the publishers aren't paying Waterstones for the marketing, it's working out for both sides.
Here is five main points according to which James Daunt constantly improves Waterstones:
1. Hand selling
Book sales are still in decline but we have started to make in-roads with selling large volumes of key titles through genuine recommendations.
2. Re-fits
Many of our shops are pleasanter places than they used to be. This is encouraging customers to stay longer and return custom/brand loyalty.
3. RP
Sales of related products are key to our sales improvement. They are filling the deficit of declining book and technology sales.
4. Coffee
Coffee is the driving footfall, encouraging customers to stay in our shops for longer and developing the emergence of social spaces. We still need to get better at this.
5. E-commerce, ship from shop, click & collect
Getting books and RP into customer’s hands quickly and efficiently through these services has helped to improve sales, particularly over Christmas.
Waterstones book sales (and those of the general market) are still in decline. Interestingly, e-books sales and the sales of e-reading devices have plateaued.
From working in the shop, I think that there are many people for whom only a physical book will do; as I speak with customers every week, I know there are many who have flirted with the e-book and are slowly returning to the printed book. Some people have become frustrated with the technological limitations of e-reading devices.
I asked James Daunt what books he loves to read. The classics are still excellent and continue to stand the test of time, he said, but he reads quite a lot of the new literature so that he can talk to the customers about those books in the shops.
He believes that change and evolving with the market is what will keep the shops open, and that bookseller is the key to saving the physical book in the future.
Written by Sarah Eddy and edited by Kristyna Hrivnacova
SarahEddy was born in Cornwall, but as a performer and a founder member of Stomp http://stomplondon.com/ , an international show, she’s performed all over the world, including the Academy Awards in Los Angeles after Stomp was nominated for an Oscar.
Now, Sarah has returned to Cornwall where she lives with her son and family. Apart from teaching creative writing after graduating in MA Professional Writing at Falmouth University, Sarah is also a painter and senior bookseller.