Time to Change

Last week, a number of companies released their financial reports for the last quarter of 2016. Among those doing so was Barnes & Noble. The bookseller, that has seen a revolving door in the CEO’s office over the last few years. Leonard Riggio is now back in charge, at least temporarily, and he addressed his stockholders after the release of the figures.

The good news is that B&N did post a profit of 96 cents (per share, I assume). The bad news is that the forecast profit was $1.13. The worse news was that same store sales fell 8.3% (as compared to the same period the previous year). This was the worst performance for the chain in the “holiday quarter” since 2005. The result saw stock dropping 9.1% (intraday drop). That comes on the heels of an 11% drop for the year.

The Nook and its related products, including content, completely failed to deliver. According to Bloomberg, linked above, sales “of Nook content, devices and accessories fell 26 percent.”

Another indicator that the publishing/book industry has become one that relies too much on “trend” buying and not in building a solid customer core by expanding their mid-list offerings, etc., is that BN knew the quarter would be weak “in part because sales of coloring books and other art supplies have slumped. That category had helped prop up results the previous year.” We’ve seen this sort of thing in YA sales when the Twilight series ended. In adult fiction sales when the 50 Shades trilogy ended and now, this past year, with coloring books no longer being the rage. Were publishers ready with something to take their places? No. Because they were still trying to push the trend with pale versions of what had been “hot”. Again, when publishers pared out most of their mid-list, those authors whose books they could always count on selling, they hurt themselves as well as bookstores.

Several things hit me as I read various articles about the earnings report. The first was that BN has been rudderless for so long, because of the turnover in the CEO’s office but also in its failure to adapt to the changing demands of its customers, that it might not be long for the retail world. If written before about how it needs to lessen its retail footprint. The overhead of running the hugs “superstores” is no longer justified in most instances. Before leases are up, it needs to be making the hard decisions about what stores should be closed due to under-performance and what stores should be moved to smaller real estate footprints. Doing this would serve several purposes, all of which are positive. First, it would lessen the financial hit the company takes in leases and related expenses. Second, with less space to fill, it could then sit down and do a serious look at what BN is going to be going forward.

It is easier to be a bookseller if you aren’t trying to pay the rent, utilities, etc., for a building you can no longer afford to stock with just books. We see this with the resurgence of indie bookstores. They are moving into small storefronts — sort of like what they did before they were driven out of business by the big box bookstores like BN and Borders. If BN truly wants to continue being a bookseller, it needs to take a hard look at where its money is going and how wisely — or foolishly — it is being spent.

It also needs to understand that e-book fans are not the enemy. We buy books too. But we also, or at least a lot of us, buy print books and magazines. Give us a reason to come into your stores again. Let us actually see books when we walk in instead of non-book related items. Give us employees who are knowledgeable about your stock and enthused about books. I miss the days when I could walk into a BN, be greeted by name and have someone take me over to the shelves and shown a new book they think I might like.

Put comfortable chairs back into the stores and even the small reading areas. Sure, some folks came in and spent hours reading without ever buying anything. Guess what? That’s okay. It builds up goodwill with them as customers and they will come in later to buy something. Even if they aren’t buying a book, they are buying coffee and food at the cafe. They are talking to their friends and families about what they read, how nicely they were treated, etc.

Now, the problem doesn’t just rest with BN. What is happening with BN is indicative of what is happening with the publishing industry. Major publishers are still trying to convince themselves that the reading public wants things they way they did 20 years ago. Publishers price e-books so high, their sales suffer. Then they point out how their digital sales dropped. You can see the glee in their eyes because, to them, it means people really want print books.

Sorry, but no. It means people are finding other ways to get that e-book they want to read. They check it out from the library. Don’t ever forget that most libraries have the capability of checking out e-books and audio books. It also means people are turning to smaller presses and indie authors to feed their reading habit. E-books, like it or not, are here to stay and readers are smart enough to know that an e-book, especially when publishers say you don’t actually own it, should not cost the same as a print version.

Then there is the attempt to survive by going from trend to trend. There aren’t enough words to explain how foolish this is. Yes, publishing has always been an industry where editors have been in competition to try to figure out what will be the next best seller. However, in the past, they also knew they needed a backbone of mid-listers who basically supported the publishing house. These mid-listers might never sell as many books per title as a best seller. However, those mid-listers had a fan group that could be counted on buy pretty much anything and everything their favorite authors put out. That, my friends, was guaranteed income and it was what the publishers used to keep their houses profitable and successful over the years.

Unfortunately, a few years ago, publishers decided they needed to clean house to decrease their expenses. Not only did we see a number of editors and other employees being let go – resulting in more work being outsourced – we saw a number of mid-listers being cut loose. When that happened, guaranteed income was lost. Now publishers and, because they are tied to closely to publishers, bookstores, rely upon trends to keep them afloat. Because of this, we see things like entire lines of books being recalled or delayed so the publisher can “rebrand” them to look like 50 Shade of Grey. Go talk to some of the authors involved in that debacle. How many saw sales go down the tubes because their books were delayed or because their book looked like every other one on the shelf and readers couldn’t tell if they’d read it or not.

Because there was nothing on the cover or in the blurb that made it stand out from every other book.

This lack of foresight, this lack of originality, is what is hurting the industry. Add in the fact that, for whatever reason, publishing doesn’t seem able to adapt to changing customer demands, and I find myself wondering how long it will be before we see the major publishers shrinking in number again. They can continue to blame Amazon for their problems but the real problem is they refuse to take an honest, deep look into their own practices. They need to allow store managers to order stock — and arrange displays — to appeal to local customers.

A store in El Paso, TX shouldn’t look like the store in Times Square or Seattle. Employees should be required to know the stock. Hell, if you work in a bookstore, you should be able to talk books with the customer.

Right now, BN is suffering from an identity crisis. Partly because of its leadership failing to adapt to changing times and partly because of problems in the publishing industry. Mr. Riggio and others need to understand that people aren’t staying home because they are watching TV. We are staying home because you aren’t offering us the shopping experience we used to get when we went to your stores. We want bookstores to be, well, bookstores. We want to be able to browse and sit and read and have a cup of coffee. We want to see books when we enter and not Nooks and toys and who knows what else. We want books.


41 thoughts on “Time to Change

  1. I’m actually surprised B&N is still in business. They seem to be doing everything they can to drive readers away.

    As far as the Nook goes, it started out as a solid piece of hardware. But they never really addressed the issues that the users brought up. They seem to have peaked with the introduction of the HD and NST. After that they seemed to be taking away functionality with every update.

    1. I never forgave B&N for changing the Nook cable with every new model, leaving me unable to charge my reader when the old cable died. Considering how many e-books I buy in a year (not to mention the Prime membership, the KU membership, and the video rentals), they lost a _lot_ of business from me.

      1. Man, talk about cutting off your nose to spite your face — BN, not you. Have they done this because they have used so many different hardware suppliers for their Nooks over the years or is this their attempt to build in obsolescence?

        1. The NC and NT charging cables had a fault in that the end that plugged into the device was longer than a normal microUSB and it had a tendency to break. The solution they came up with was a wider, but proprietary, plug that can’t be used for anything else. It fixed the identified problem but created another in it’s place. It was typical B&N problem solving. Solve one thing, create two, three or more others at the same time.

        2. I got the impression it was planned obsolescence, but that may have been because I was…peeved…at the time.

      2. Sounds like a similar business strategy to Apple: Make money on the peripherals by not only not using generic USB/mini/micro, but also changing it up with each new generation of iPhart so that your old cables become obsolete with every new purchase.

    2. I agree, especially regarding their business practices. It is telling that they can’t keep a CEO for long any more. It is also telling that they put in charge a former CEO — and major stockholder — who stepped down at a time when the company wasn’t doing well (iirc) instead of putting an interim CEO in place who might have some forward thinking ideas.

      As for the Nook, I’ve never owned one. They lost me when they first introduced the Nook and the Nook app for PC. Even though a book was supposed to be free, they would charge your credit card a penny and it was like jumping through hoops to get the refund put through. Their customer service also seemed to lag far behind Amazon’s.

  2. I’ll say one thing for the late, lamented Hastings. before they were bought by the holding company, their managers were very good about local interest and regional stuff. The Hastings near a military base had lots of Baen and a decent military history section. One in western Flat State had lots of regional books and ag stuff. Another one in Western Flat State, where a lot of Hispanic residents had recently moved in, added Mexican magazines and expanded their “world music” section to match what the local Hispanic FM station played. It seemed to work, at least in the early 2000s.

    1. I miss Hastings. I also miss the BN that used to be before the demise of Borders and some of the other stores. Back then, store managers had more control over stock and the employees seemed to stay longer and know more about the books in the store. Now it is as if BN is having an identity crisis, unsure if it is a bookstore or big box store for all things that aren’t tires and appliances.

    2. I was very happy to work with the people at the Hastings in New Braunfels when I did book events. They were very helpful, had no problem ordering my books. I think they did have a good idea of their local market.
      But B&N … oh, dear, oh dear, oh dear.

  3. I would like a NOOK subsection where one or 3 employee s that really knew the NOOK hung out and could offer help and suggestions.
    It might be too strange or something but being able to order online and pick it up at the store might help drag people in.

    1. Ronald, absolutely. If you are going to have a section selling your company’s tech brand, you need someone there who actually knows how to use it and who can answer questions about it. As for ordering something online and picking it up in the store, yeah, that would be nice.

  4. “I miss the days when I could walk into a BN, be greeted by name and have someone take me over to the shelves and shown a new book they think I might like.”

    You sound like me, Amanda. I’m old enough to remember gas station attendants in uniforms.

    If I’m having the same shopping experience on-line as I am going to the store, why am I going to the store?

    Right now the Chapters near me is going through a renovation. The idiots are spray painting the ceiling while the store is in operation, if you can believe that. There’s dryfall latex in the air, and the magazine racks are all packed away.

    I made an important discovery with that experience. If there’s no magazines, there’s nothing in the store I want to see. Magazines and periodicals are where I go for a more in-depth look at whatever topical issues interests me. Cars, guns, airplanes, electronics, science, etc. Take that away, all there is for me is the Science Fiction/Fantasy section.

    I’ve read all the old stuff. My basement is filled to the top. I have a whole room lined with book cases, and still there’s stuff on the floor. What is there mostly in the Chapter’s SF/F section? Old best sellers.

    Is there a curated rack of new best-sellers? No. Is there even a rack of random new releases? No. Because the “new releases” rack gets updated NEVER, and there is no breakdown by genre.

    Meaning, Chapters-Indigo has finally, after decades of trying, finally managed to lose me as a customer.

    Will I make the drive all the damn way into Toronto to visit Bakka Phoenix bookstore (84 Harbord St. at Spadina) because that’s the only -proper- bookstore I even know about right now? Maybe once a year. I hate Toronto.

    I say maybe once a year, because when I do go, and I peruse the carefully curated New Releases, my Nutty Nuggets are gone! My Coke is gone! I don’t want New Coke, I want the old Coke, and there ain’t any.

    I don’t want to see “Logan” at the theater. I want to see Captain America. But all there is on the shelf is “Logan”.

    So that’s where we are right now. Publishers printing grey goo, and big box retailers providing an uninviting sales environment to look at it in. Bankruptcy seems inevitable.

    Good thing there’s Amazon, as much as I really don’t like buying stuff from them. It offends me at a visceral level to choose a book from a TV screen and have it dropped off by UPS days later. I don’t like it. But, that is my only option these days.

    But it doesn’t much matter anyway. At this point, I’m waiting for the next Correia, Asher, etc. novel anyway. Because I’m so -tired- of picking something up, and its some guy having a bad life surrounded by bad people, and then they all die pointlessly.

    1. You hit it right on the head. Why should customers come in if the store isn’t giving them what they want? BN has to decide what it’s going to be and, if it is a bookstore, they have to return ordering/stocking control to local or regional managers and quit thinking every store has to carry exactly the same thing — it isn’t Walmart.

      1. Therein lies our difficulty. The management team thinks it -is- Walmart. That’s why Chapters is “updating” the stores. They think more people will come if they change the decor.

        Another thing going on, Chapters and B&N are not bookstores. They are TOY stores with books in them. The employees for the most part man the cash register and stock the shelves. If you ask a question they go look it up on a computer. Or try to, some don’t understand the computer.

        The third thing is minimum wage and as mentioned in the article, real estate. They can’t afford the square footage they have, and they can’t afford staff. Educated people who read and love books are going to shrivel and die working for BigBoxBooks. Its a warehouse job. You move boxes.

        I forsee a bunch of empty stores, coming soon to a mall near you.

        1. My mom gave me a Chapters gift card for Christmas. Trouble is that there’s not a lot there that I want to purchase. Might use it to expand the Squire’s library. As for myself, I will keep buying e-books on Amazon. Oh, and have you seen the cost of kids books these days? A paperback for an adult is cheaper!

          1. Did you know that the public libraries in Haldimand do not take donations of kids books? I tried to give away a huge stack. Nuh uh.

        2. My problem was, with National Bookstore in the Philippines? It was an office supplies store, with the occasional bookshelf. Apparently it’s going back that way because the books, as always ended up priced out of the market. *sigh*

          Reading’s for the rich only, y’know.

          1. There’s a story about an advertiser in South America that didn’t want to advertise in a particular magazine because they were always sold out.
            Think about it.

              1. So you stood up and pulls your shirt down to prevent it from riding up, twice? Because that’s what most fans mean by the Picard Maneuver….

  5. This is exactly what happened to Borders. I left there about seven years before it kicked the bucket, and the signs were already there. They wanted standardized signage—which is fine in itself, but cut out the custom signs we’d made that had driven sales of particular products. They started objecting to my (awesome) GM’s author events, things that he had personally set up and promoted, and they objected to the “game day” that one employee had set up (that had swelled our games, comics, and SF sections as the gamers started buying stuff at Borders.)

    After I left, I heard how they cut benefits for the employees more than they already had, how they started having “push books” that the employees had to try to sell despite the fact that nobody in the area was interested (and they had METRICS on them, and woe betide if you didn’t meet the goal.) They took out everything that made it a bookstore worth visiting and tried to standardize them across the country.

    I’m sad that when they went down, we didn’t have a truck. I would have loved to buy off some of those sturdy, slightly back-angled bookshelves. That was about the only good thing they had left aside from some loyal employees. (My awesome GM had long since left for the Chamber of Commerce.) I’m also really annoyed that my town of 160,000 doesn’t have a bookstore anymore (aside from one tiny little strip mall used store. ONE.)

  6. I’m not sure I’m happy about Amazon getting to have a de facto monopoly on book distribution — but if the competition is still stuck in the horse-drawn cable car era, what do you want?

  7. What really bothers me is that it was only 3 years ago that I could walk into BN and ask them questions about the NOOK, but now the NOOK is just a Samsung Note that was optimized for running the NOOK app. I could go to the SF/F section and have plenty of mid-listers to choose from, and there was always someone around to answer questions about the books, even if, more often than not, it was another customer. I guess I’ll start fighting traffic and head downtown to the local bookstore, I hate dealing with the traffic and lack of parking, but it is a great little bookstore that’s been there forever and a day.

    1. that’s kinda sad, one thing i love about my kindle is the battery life

      however, i have been buying C++ books lately, and buying the physical books because even with shipping they are 30% cheaper….

  8. Oy. The last time (and it might just be the last time…) I was in a B&N I found myself wondering where all the books were. And where the stuff I liked or would at least consider went. As for looking stuff up, once upon a time the B&N in Mankato, MN had terminals accessible to the customers so they could check things themselves. Those have gone. So, as said, it’s becoming a toy store with the odd (but not Odd, dagnabbit) book. Were I running a competing a book store, I’d be thrilled. As a potential/former customer, I am disappointed.

    1. I used to live in Marshall. Talk about a desert! I had to drive to Sioux Falls to buy anything Walmart didn’t have.

  9. I will way this: the regional B&N has lots of books and reading stuff, and not as much junque as mot of the ones I’ve wandered into. Their regional selection is fantastic.

    On the gripping hand, how much of the overall problems facing B&N, Chapters and the like come from the idea that started in the 1960s about any manager can manage any-thing? You don’t need to know the business, just how to manage.

    1. This. Madam, oh how regrettably This.

      I rode the last great print publishing wave in the 1990s and early oughts as a smallish technical publisher with sales of about $25M, releasing 100-120 new nonfiction titles per year. I was thus in the thick of it and I saw the problems happening up so close they spattered all over my face. Corporate management gradually took any discretion away from local store buyers, who were reduced to ordering “by spreadsheet” in an early attempt to use algorithms to replace expertise. The results were what we all saw: increasingly uniform frontlists, in an attempt to imitate anything that sold faddishly well, and midlists shrinking because one weak title caused an author to basically be dropped from consideration by the spreadsheets. Do that often enough and you run out of midlist. Store employee turnover rose sharply. From top to bottom, Borders & B&N began to be run and staffed by (as one of my colleagues sagely said) “people who don’t read books.”

      Larger publishers could purchase endcaps and special positioning, which sometimes turned so-so titles into borderline bestsellers, prompting copycat titles that nobody wanted because nobody had really wanted the heavily promoted originals.

      People outside the industry wondered what the hell was going on, and many blamed the tech bubble collapse in early 2000, and those who didn’t later blamed 9-11. In truth, all the problems cooked down to an attempt by large firms to manage generically and centrally, without fully understanding how publishing had succeeded to begin with. I actually heard some channel sales VP tell us, “It doesn’t matter if you’re selling books or refrigerators. All the same rules apply.”

      At that point (which might have been 2001 or so) I knew the ride was over, and that the landing would be in a crater.

      1. Credentialism. The notion that every human is a hot-swap hard drive with convenient pre-loaded software. Need an engineer? Plug one in. The cheapest one you can get, they’re all the same.

        And we wonder why everything is made in China.

  10. I live in a small town in AZ, and when B&N came in, in 1995, everybody was thrilled. Management had an open area where they invited community groups to meet. I launched an alternative health/NewAge discussion group, and sometimes we’d have 100 people show up! Even at the smallest it was still around 20. People would drive sometimes 50 miles or more, to attend the group, do their book shopping, and try Starbucks, which was a new thing here. Then one day a few years later, they changed their policy to
    book groups only, so that was the end of that. I could not get B&N management to understand that our members were buying all kinds of books,
    even when a specific book was not the topic for the meeting. I never went back, and started getting my books at Amazon and Starbucks coffee from their website until stores opened here. I’m sure this happened other places as well. Bad management decision!

    1. Personally, I could see preference given to long standing or book focused groups when conflicts arose (if things could not otherwise be worked out) but just a blanket ‘nope, not welcome’? Yeah, bad Idea.

  11. When my grandfather died suddenly in the late 50s my grandmother had to find a job. She loved books and thought that the best place she could possibly work was a bookstore. So she went to what was then the biggest bookstore in Baltimore, Remington’s. She was granted an interview and was surprised to find that the person conducting the interview was the owner, who was also the son of the founder. Not having worked outside the home before that she was nervous about her qualifications, but the questions he asked were about books. They ended up spending over three hours talking about books and at the end of the conversation he told her she was hired. She was surprised and pointed out that she had never used a cash register or an adding machine.

    “I can teach you those things,” he told her. “What I can’t do is teach someone about books, or how to love them.”

  12. Sorry for coming to this late, but I worked for B&N from 04 to 13, and I watched the transition happen up close and personal.

    Tempted to go into the whole thing, but I’ll limit myself to this: have pity on today’s booksellers. They’re not running up and asking if you need help for the simple fact that payroll now is less than half it used to be, while the workload hasn’t decreased one iota. It just changed from books to other things. As one of my friends – still a merch manager there – told me, “Dude, nobody’s happy anymore. Nobody smiles at all.”

    So be kind to them. They’re working hard and they wish they could go back to the old ways, but everyone knows the old days are never coming back. The in-store book business will not increase, even if the brick & mortar side somehow manages to find a way to survive in the digital age.

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