In 2018, venerable brick-and-mortar bookseller Barnes & Noble faced declining revenues and lacked a recovery plan. New CEO James Daunt came aboard in 2019 to rescue a company on the brink with a daring new strategy: sell books you love to customers who love books. Daunt cast doubt on industry-wide practices and gave power to frontline workers as he began rebuilding brand trust. In his Substack column, musician and cultural critic Ted Gioia tells the inspiring story of an improbable corporate comeback led by a man whose first act was to question the received wisdom of his business.
In a world where bookstores struggle to stay afloat, Barnes & Noble’s remarkable turnaround story stands out as a beacon of hope. This iconic bookstore chain has defied the odds, proving that with the right strategies and a customer-centric approach, success is within reach. Discover the invaluable lessons we can learn from Barnes & Noble’s impressive revival.
Keep reading to uncover the secrets behind Barnes & Noble’s triumphant comeback and how you can apply these insights to your own business ventures.
Table of Contents
Genres
Business, Retail, Marketing, Management, Leadership, E-commerce, Entrepreneurship, Strategy, Innovation, Adaptation
“What Can We Learn from Barnes & Noble’s Surprising Turnaround?” by Ted Gioia delves into the remarkable resurgence of Barnes & Noble, a bookstore chain that faced near-extinction but managed to turn the tide.
Gioia explores the key strategies and decisions that contributed to Barnes & Noble’s successful turnaround, highlighting the importance of adaptability, customer focus, and innovative thinking in the face of adversity. The book provides valuable insights into how Barnes & Noble revamped its stores, enhanced its online presence, and diversified its offerings to remain relevant in the digital age.
Gioia also emphasizes the significance of strong leadership and a willingness to take bold risks in driving the company’s revival. Through a comprehensive analysis of Barnes & Noble’s journey, the book offers practical lessons that can be applied to businesses across various industries facing similar challenges in today’s rapidly evolving market landscape.
Review
Ted Gioia’s “What Can We Learn from Barnes & Noble’s Surprising Turnaround?” is a compelling and insightful exploration of one of the most remarkable business turnaround stories in recent history. Gioia’s meticulous research and engaging writing style bring Barnes & Noble’s journey to life, providing readers with a behind-the-scenes look at the strategies and decisions that saved this beloved bookstore chain from the brink of collapse.
The book’s strength lies in its ability to extract valuable lessons from Barnes & Noble’s experience and present them in a way that is both accessible and actionable for business leaders and entrepreneurs. Gioia’s analysis is thorough and thought-provoking, shedding light on the importance of adaptability, customer-centricity, and bold leadership in navigating the challenges of the modern business landscape.
While the book primarily focuses on Barnes & Noble, the insights gleaned from its turnaround are applicable across industries, making it a must-read for anyone seeking to drive success in the face of adversity. Overall, “What Can We Learn from Barnes & Noble’s Surprising Turnaround?” is an engaging and informative read that offers a fresh perspective on business resilience and transformation.
Take-Aways
- Barnes & Noble is making a brick-and-mortar comeback.
- CEO James Daunt generated B&N’s turnaround by questioning bookselling’s business fundamentals and focusing on books and people.
- Daunt’s guiding principle: love what you want to sell.
Summary
Barnes & Noble is making a brick-and-mortar comeback.
The American bookstore chain Barnes & Noble (B&N) suffered a steep revenue decline just a few scant years ago. Today the chain is growing again, planning to open more stores, and succeeding in locations where Amazon’s forays into brick-and-mortar failed.
B&N opened in 1886 and prospered for more than a century, but it got clobbered in the transition to digital. It moved online to compete with Amazon and created an eBook reader that never caught on well. Even though Borders, its only significant competitor in brick-and-mortar bookselling, closed in 2011, B&N couldn’t turn its business around.
“Food at B&N was just like the books, except books don’t stink when they get old. But in this case, everything the brand stood for was looking stale.”
The company lost $18 million in 2018 and laid off 1,800 staff members, leaving store operations in the hands of part-timers. After its then-CEO faced sexual harassment accusations, B&N fired him. Books sales plummeted, e-reader sales slid more than 90%, and the stock price tanked by more than 80%.
B&N had become “a lousy bookstore,” dedicating much of its sales area to toys, calendars, knickknacks, and greeting cards — anything except books. B&N set up in-store cafés and somehow made the books-plus-coffee formula unappealing. Another doomed initiative involved launching freestanding, in-store restaurants under the name Barnes & Noble Kitchen.
CEO James Daunt generated B&N’s turnaround by questioning bookselling’s business fundamentals and focusing on books and people.
James Daunt began as CEO in 2019 after turning around Waterstones, the British book retailer. Daunt began his bookselling career at age 26 running his own store. He broke rules — including refusing to discount books — and his “beautiful showplace” bookstore succeeded despite the odds against him and physical bookshops.
He brought his strategies to Waterstones. He stopped its “Buy Two, Get One Free” sales promotion because he believed offering a book for free lowers its value, and he doesn’t find books overpriced.
“There is no substitute for good decisions at the top — and no remedy for stupid ones.”
Daunt’s most astounding move was refusing to take money from publishers for book promotions, a widespread standard practice in the industry. Booksellers typically agree to buy a certain number of copies of a book, shelve it prominently, and promote it — whether the book sells or not — in exchange for publisher discounts and cash for marketing.
Booksellers generally hope the publishers’ money and discounts will help them undercut Amazon, and publishers hope to push titles onto bestseller lists, but B&N stopped playing the publishers’ game once Daunt was in charge. Instead, he put the books he and his staff selected as their best offerings in store windows and on front tables. He gave local staff the authority to make product placement decisions in their stores, a move that made each location unique.
“This crazy strategy proved so successful at Waterstones that returns fell almost to zero — 97% of the books placed on the shelves were purchased by customers. That’s an amazing figure in the book business.”
Daunt joined B&N just before the COVID-19 pandemic. He turned the plague year into an opportunity to purge store shelves and improve stores he found “crucifyingly boring.” He asked each store’s employees to reevaluate every single book and rethink ways to make each section of the store a better draw.
Daunt’s guiding principle: love what you sell.
Publishers didn’t care for Daunt’s approach. They had to work harder to convince local stores to take their offerings. But B&N’s sales grew, bouncing back to pre-pandemic levels in 2021 and then steadily exceeding them. Daunt opened 16 new locations in 2022 and planned 30 or more for 2023. He says his secret is his love of books, which earned his employees’ trust and renewed the reading public’s faith in Barnes and Noble.
“Daunt also refused to dumb-down the store offerings. The key challenge, he claimed, was to ‘create an environment that’s intellectually satisfying — and not in a snobbish way, but in the sense of feeding your mind’.”
If you wish to make money selling music, you’d best love music. If you hope to sell movie tickets, love film. Too often, purveyors promote something that seems promotable because they’ve created a marketing gimmick they think people will respond to — such as a brand tie-in or a human interest angle. They make decisions based on money, not on creative merit. This erodes brand trust.
You can’t teach people to be passionate about books, but you can find people who love books and hire them to work in your bookstore. B&N succeeds because it puts readers and books where they belong: at the center of its selling proposition.
About the Author
Music critic Ted Gioia is the author of several books, including The History of Jazz and Music: A Subversive History.