Can Barnes & Noble's New Strategy Save It?

hi guys Olive here here today because I want to have a discussion about Barnes & Noble's new strategy and I also want to talk more generally about the value of bookstores in today's world in case you're not located in the US Barnes & Noble is a long running bookstore chain here in America they have about 600 locations nationwide and in 2019 they were actually acquired by a private Equity Firm and to help the business out they brought in a new CEO a very surprising choice of CEO and his strategy is taking the company in pretty much an entirely different direction in case you don't know much about me or in case you're new to the channel I actually have a business and finance background so I do find this kind of stuff very interesting but beyond that I am a longtime customer of Barnes & Noble so I've been paying a lot of attention to this story as it's been developing and I've been wanting to talk about it here on my channel for quite some time now because I think even if you're not interested in the business side of things it's still really intriguing to talk about this strategy to speculate on whether or not it's going to be successful because it brings about questions like what makes us want to shop in a Barnes & Noble and how is Barnes & Noble going to be successful with a competitor like Amazon out there before I start talking about Barnes & Noble's New Direction though I do want to give you just a little bit of background on the company I think it's important for you to know where they started and where they were coming from going into this new era so Barnes & Noble was actually founded back in 1873 but they didn't start oper operating under the Barnes & Noble name until 1917 and then in 1932 they opened their Flagship location in New York City and they actually still have a location in that exact same neighborhood things began to change for Barnes & Noble in 1971 because they got a brand new owner and then there was a massive outside investment into the company during the 1980s which allowed them to grow very rapidly they started opening a ton of new locations all across the country with the same basic model the one that you would be familiar with if you've ever shopped in a Barnes & Noble a big box store with similar Furnishings decorations and inventory it's the kind of copy and paste design that you will see with chains it creates a consistency for their customer if a customer walks into a Barnes & Noble they know pretty much exactly what to expect if they all look the same from what I could see it seems like Barnes & Noble peaked in 1999 business was booming Barnes & Noble was actually putting a lot of local Indie bookstores out of business because BNN could offer competitive prices to their customers that Indies just couldn't compete with but that wouldn't last very long because Amazon started selling books in 1995 it was public by 97 and year after year Amazon just started taking more and more of the market share for books Amazon could offer even more competitive prices than Barnes & Noble could because they didn't have the massive overhead costs for those ginormous physical locations that Barnes & Noble had by the time we get to the 2010s Barnes & Noble was really feeling the pain sales were down for seven straight years their stock price had plummeted they were forced to lay off employees and close some 150 stores but like I said the end of that decade would usher in a lot of new change because they were acquired by that hedge fund who decided to install a very surprising choice of CEO a British man named James da now James da is the founder of his own small chain of books stores in London he was a book seller himself for about 25 years but most notably he was named CEO of water stones which is a British bookstore chain back in 2011 by the Russian billionaire who had just acquired water stones at the time of its acquisition water stones was operating at a loss but it was back in the black not long after James da took the Reigns and he is widely considered to be the reason for its turnaround I'm sure the Hope was hey he did it for water stones maybe he could hop across cross the pond and do it for Barnes & Noble I know some people when he was appointed a CEO had doubts that his experience in the UK would transfer to the US market but James Dawn is just out here proving everybody wrong in 2021 sales for Barnes & Noble had surpassed prepandemic levels and by 2022 they were profitable enough to start thinking about expanding again after closing all those locations back in the 20110 I know they had plans to open 30 additional locations in 2023 with an additional 50 expected this year in 2024 it begs the question how did he do it well he wanted the stores to start feeling like bookstores again if you're someone who has shopped at a Barnes & Noble over the past decade or so you'll know that the stores started becoming dominated more and more by items that weren't books Sidelines items DVDs anything but books and then in all of their rigid uniformity they started to feel just uncomfortably corporate a Barnes & Noble never felt like your local independent bookstore but James do wanted it to so the strategy was no small feed to change the way these stores both looked and operated because problem number one their CEO hated the way the stores looked I have seen him use some very colorful language to describe the existing stores in all of my research for this video he's called them boring unengaging ugly and dispiriting and honestly I have to agree that green color that has dominated Barnes & Noble locations for as long as I can remember I swear you can smell that green like dust and mothballs in the newer stores that they're opening and the ones that are getting remodels all of the color choices are lighter and brighter from the paint colors to the color of the wood of the bookshelves a lot of stores moved from those massive box stores to smaller locations nearby so it felt more intimate and then the design of the Interior changed as well James da wanted to focus on smaller tables wider aisles creating a layout that felt more like a maze anything to make it more comfortable for you to stay a while and explore for new books and as customers are poking around their new and improved Barnes & Noble they may also notice that the books on offer appear to be a lot different and that's because James Dawn made a very bold choice to hand over control of the inventory to the management of the individual stores previously that was determined by corporate but James do knows that good book sellers good bookstore managers should have a finger on the pulse of who their customers are what they want what are the local interests in the area what are their customers buying the most of they should be the ones to choose what goes on the bookshelves so he's allowing them to do that he handed over the daunting task of letting them figure figure out what to order and where in the bookstore to place it no more planograms no more algorithms just book sellers selling books I've seen James da call this the liberating of stores and it really does feel that way by doing this they're allowing each individual location to function more like an indie that has a lot more of a local focus and because they're taking so much feedback from their book sellers many of whom are book loving social media users they they're able to keep up way more with what's trendy what books people want to get their hands on right this moment what books are trending online they can do that so much faster than if someone in corporate were in charge there are two more small pieces to this overall strategy puzzle one of them is deemphasizing Sidelines or all of those items for sale in a bookstore that aren't books as I said earlier that had gotten pretty out of control in Barnes & Noble locations before and now they're starting to rain it back in the other thing is something they're not doing anymore they have completely ceased taking money from Publishers to Place Books in a Barnes & Noble store in a specific highly visible location Barnes & Noble earned a lot of revenue from Publishers to do that in the past but James da says that that's leading to the kind of uniformity that he's desperately trying to get away from now in Barnes & Noble stores and you can see through all of these choices they are trimming all the fat off of the core of something that barn and Noble lost a long time ago if it ever had it and that's giving people an authentic bookstore experience that's just about books something that just screamed out at me loud and clear as I was doing my research for this video is just how deeply James da gets what book shopping is all about what makes it special because it's not just about walking into a bookstore grabbing what you want buying it and then leaving it's an experience it's about about the browsing it's about the atmosphere it's about that cup of coffee you're sipping on as you page through a few different books you're considering buying it's about the excitement of walking out with something that you didn't even know existed when you walked in and as James da talked about in a really great interview a physical bookstore is always going to be able to provide something that Amazon can't Amazon is about a purchase it's about a transaction you know what you want when you go onto the Amazon site you click a few buttons and then it's on its way transaction over a physical bookstore is about Discovery it's about that excitement of finding something new getting a recommendation from a book seller who can point you in the direction of something you will love sure Amazon tries to put recommendations in front of you but hell if their algorithms were any good at picking out books for people I think far fewer people would watch a book Channel like mine the best book recommendations come from people to stand up to Amazon with in 2019 according to the University of Pennsylvania's Wharton business school had 72% of the book Market Barnes & Noble is going to have to lean into their strengths their brand recognition their physical presence and all that can offer and also the collective knowledge of their Nationwide team of book sellers they need all of that to do it and as James dawn has said if we want to continue to have big bookstores here in the United States then Barnes & Noble needs to survive at the level that BNN operates it's very unlikely if they go under that something could swoop in and take its place we would still have our Indies if it went under we love our Indies but if Barnes & Noble goes then the Indies are up against Amazon on their own with this new direction that James Dawn is taking the business I could definitely see Barnes & Noble surviving I think it is a really good strategy in one article I read James Dawn actually said book sellers are about as uncommercial a breed of people as it's possible to come across the irony is that the less concerned we are with the commercial the better it works commercially I would like to also extend that sentiment to book buyers like myself because none of us like to feel like a number we don't want to feel like a cog in the wheel of this massive grinding corporate machine and shopping for books isn't the kind of sterilized shopping experience that you get when shopping for daily Necessities say at a Target it's a completely different thing it is an experience it's almost reverent and the more that Barnes & Noble allows the bookstore experience to be the experience stop trying to make it so commercial the more people are going to enjoy it and the more they enjoy it the more they're going to want to repeat that experience and that means more sales I really applaud James do for all of these moves and for this strategy overall I will say though it's clear to me that this was not a wellth thought out tactical strategy drawn up in a boardroom it is just that James Dawn knows how to run a bookstore and he's applying it to Barnes & Noble locations it doesn't matter that he's British and these are American stores for one very important reason book people or book people or book people or book people no matter where they're from it's pretty simple we like books we like to browse for them in peace and ask for guidance when we need it our bookstore time is sacred time and buying new books feels just about as good as reading them it is not rock at science but if you're not a book person you're not going to get it but this guy clearly does and I think it's going to save Barnes & Noble but this is a discussion after all so I'm ready to hear from you what does a good bookstore experience mean to you have you been to a Barnes & Noble if so what did you think of it could you smell that green if you do have a local Barnes & Noble location have you noticed a change in yours what did you think of it what do you make of this new strategy are you as optimistic about it as I am let me know any or all of that down in the comments we can chat all the sources I use to prepare this video are linked for you in the description box below and I have linked them in descending order of how interesting or valuable I found them so if you want to read more about this topic then I suggest starting from the top and working your way down and then at the very bottom of the exact same description box you'll also see links to everywhere you can find me around the internets Goodreads Instagram the story graph all the places I'm the most active in case you want to keep up with what I'm reading and doing right now thank you so much for watching I hope you're having a wonderful day I'll see you in the next video [Music] bye

Channel: abookolive

Views: 291,269

Keywords: books, booktube, adult booktubers, booktubers who read nonfiction, nonfiction booktubers, nonfiction books

Id: 0DJaHhfBMA4

Length: 13min 50sec (830 seconds)

Published: Fri Mar 29 2024