November 21, 2012

Waterstones takes self-sabotage to new heights

by

New logo? Or just an accurate portrait of James Daunt’s remaining toes after all those self-inflicted gunshot wounds?

Waterstones CEO James Daunt is fast proving himself a late-blooming phenom of abysmal retail ideas.

Daunt was interviewed by Bookseller editor Philip Jones this week, and one detail from that interview, pithy enough to have furnished another post on their site, arose over the rather mundane question of holiday staffing.

Daunt commented on the “sense of belief” he believes he’s instilled in his staff. He was disparaging of complaints about the British book retailer’s policy of linking staff numbers to number of sales, a practice which one unnamed Waterstones’ manager quoted in the piece correctly calls a “self-fulfilling prophecy” — that is, fewer staff will lead to fewer sales at those locations. Daunt countered that “our sales per employee vary considerably in the business, and there is no good reason for it.”

Waterstones, as with many retailers, takes on more staff for the busy holiday season, but is waiting to hire them, meaning that regular staff must fill the gap. Most importantly, The Bookseller links the Waterstones’ staffing issues to increased problems in the holiday season now that the company has decided to shoot itself in each and every foot by selling Kindles, a move we’ve previously reported on here and here.

Professional booksellers — including those working at Waterstones — can be shockingly efficient when necessary. Though books are a luxury purchase, they are relatively cheap compared to, for instance, electronics, and so the barrier for a decision to purchase is lower. More time spent with a professional bookseller will, in most cases, mean you leave with more books (and often more interesting books, but that’s beside the point, at least for the moment). These same booksellers, even the best-trained, will not be able to sell Kindles with quite the same speed or, more importantly, the same sales return on time investment.

Customers purchasing ereaders in person in a bookstore (as opposed to those customers buying them online) are likely to have questions, sometimes many questions, about operating the devices, both before and after purchase. Customers that buy an ereader in a bookstore will, when the occasional (some might say inevitable) glitch arises, be likely to return to those bookstores looking for technical help. All of which takes time, time that, as the prices of Kindles fall, and the prices of books rise, begins to be an ever-more-expensive investment on the part of the retailer. And unlike with books, or even the sales of other e-readers, each investment of time in selling a Kindle pays no further dividends, and in fact precludes them in the future.

Contrast this with American Bookseller Association-member independent bookstores which this past month began announcing to their customers the availability of Kobo e-readers in their stores, and also began the transition of their online ebook architecture to one furnished by Kobo … after having been slowly and gruesomely broken up with by Google earlier this year. Selling Kobo readers will likely require the same investment of time on the store floor by indie booksellers, or even more if potential customers unfamiliar with the brand require reassurance. But the potential to build a lasting relationship, not to mention specifically instructing customers on how to purchase ebooks from that store, could, if successful, actually increase that bookseller’s ratio of profit to time spent with a customer.

It’s readily apparent, even to Target and Wal-Mart, that selling Kindles in a retail store, even one that doesn’t specialize in books, is a mistake. It is curious that Waterstones seems so hellbent on disproving, this holiday season, a point everyone else has already agreed upon, and at the expense of their ever-more-put-upon workforce.

 

Dustin Kurtz is former marketing manager of Melville House.

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