Barnes & Noble's New CEO Reveals Insights Into a Brilliant Comeback Plan
If you were born before the year 2000, chances are you have fond memories of spending hours in a Barnes and Noble, reading books or magazines in a huge, comfy chair--probably while sipping on Starbucks.
Fast-forward to today. Since the rise of Amazon (which, of course, began as a bookstore), Barnes and Noble has suffered dramatically. Sales at the mega-chain have fallen every year since 2012, and hundreds of stores have closed.
All of which begs the question: Is there any way to save Barnes and Noble?
Enter James Daunt, who is taking over as the bookseller's CEO.
Daunt has saved a bookstore from the brink of bankruptcy before. Back in 2011, Daunt took over running Waterstones, Britain's largest bookstore chain. At the time, Waterstones was faltering much like its American counterpart.
But in just four years, Daunt managed to return Waterstones to profitability. Many are hoping he can do the same for Barnes and Noble.
The New York Times published a comprehensive piece on Daunt and I recommend you read it in its entirety. While the author admits Daunt has said little about his turnaround plans, we can glean much from what he's already accomplished in Britain.
Here are three brilliantly successful methods Daunt used in the past that he could very possibly employ at Barnes and Noble:
He didn't just break the rules. He changed them.
Publishers have traditionally had the power to dictate where their books would be stocked and put on display at bookstores--for a price. That means that the deepest pockets dictate which books get featured front and center.
But there's a major problem with this model. Publishers typically pay for this privilege in all bookstores of a chain, across the country. But readers' tastes may differ greatly according to where they live. Books that become bestsellers in one part of the country may be much different than those that will be popular in another part, for example.
If the bookstore continues to push books that readers don't want, it isn't providing value for its customers.
Of course, giving up these fees is tough for booksellers. Daunt compared the whole process to a drug addiction.
"You can't think straight on crack," Daunt told the Times. "We were filling our stores with books that customers didn't want."
So, Daunt changed the rules.
After "months of tough negotiations," publishers agreed to abandon the old system and let Waterstones choose which books to stock, and where. In return, Daunt would slash the freight and labor charges publishers had to pay for unsold books. (More than 20 percent of Waterstones' inventory was being mailed back to publishers, at a cost of tens of millions of dollars, reported the Times.)
With this single change, Daunt managed to greatly alter the bookselling ecosystem and greatly increase its value to the customer.
But this was just the beginning.
He empowered his people.
If publishers were no longer dictating which books got featured, who would?
How about this for a novel idea: the bookstore itself.
That's right, managers are given liberty to configure stores the way they want. They could feature books they think their customers will enjoy--based on what they've learned about them through the years.
"I've literally been left to turn this shop into a place I think will be fantastic for our customers," said Kurde Atfield, manager of one Waterstones located about 40 miles outside London. "The difference is almost incalculable. I love coming to work."
In addition to giving store managers more power, Waterstones' corporate headquarters also plays a role. The Guardian reports that Daunt himself consults with a small team of buyers to choose "books of the month" and a "book of the year." In turn, customers value these recommendations--especially because some of them feature little known books they wouldn't have heard of otherwise.
And as Daunt's bookstores gained the trust of consumers, they also gained repeat customers.
He focused on the long game.
One of the things Barnes and Noble got right was making its stores comfortable. There was simply nothing like sitting in a big, soft leather chair to read a book. And of course, if the book was good enough, you'd buy it and take it home to finish.
With Waterstones, Daunt went one step further. He wanted stores to become welcoming places for customers to lounge around and spend time, much like Starbucks has nurtured its brand as a "third place" between work and home.
For example, when it comes to college students spending inordinate amounts of time in stores taking advantage of store electricity and free Wi-Fi, Daunt sees something Amazon can't offer. And he sees beyond any short-term losses incurred from those young customers.
"When those students are rich and famous, they'll buy books from us and the cost of the electricity will be paid back in spades," said Daunt. "We're playing the long game."
Daunt has shown that it's key for a store to make an emotional impact with consumers. To do so, he's used a short formula, but one that's proven successful:
1. Change the rules.
2. Empower your people.
3. Play the long game.
Put together, they show that in order to bring your business into the future, you must learn to let go of the past.
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A version of this article originally appeared on Inc.com.