Leadership Lessons from Barnes & Noble

I have always loved bookstores. There is something almost spiritual about spending time, strolling through the aisles, occasionally pausing to take down an intriguing title, feeling its texture, studying the cover, even breathing in its smell, and ultimately either placing it back on the shelf or, book in hand, moving on in the hopes of finding another tome to take home.

I, much to my regret, visit bookstores far less often. The ebook and its backlit text have taken over my reading life. I have, partially out of guilt, worried about the fate of bookstores. A New York Times article by Elizabeth A. Harris, “How Barnes & Noble Went From Villain to Hero,” put my mind at ease. It describes how Barnes & Noble is leading the charge for physical books and the book store.

It seems that the game is not nearly over for bookstores. Amazon is a Goliath but not quite as tall as expected. As Ms. Harris puts it –

Today, despite the rise of other formats, the industry still relies on physical books — in 2021, they brought in 76 percent of publishers’ sales revenue, according to the Association of American Publishers.

One may ask, what is the harm in online book purchasing? The damage it does is that online shoppers spend far less time browsing. As Ms. Harris puts it –

Buying a book you’re looking for online is easy. You search. You click. You buy. What’s lost in that process are the accidental finds, the book you pick up in a store because of its cover, a paperback you see on a stroll through the thriller section.

No one has quite figured out how to replicate that kind of incidental discovery online. It makes bookstores hugely important not only for readers but also for all but the biggest-name writers, as well as for agents and publishers of all sizes.

This lack of visibility for new and smaller players is similar to the dilemma that toy inventors and smaller toy companies face. Our industry has no Toys R Us. We are dominated by a handful of retailers that cherry-pick toys from the largest toy companies. You will linger in a true toy store; you have no reason to do so in a big box toy aisle.

The article focuses on the CEO of Barnes & Noble, James Daunt. Mr. Daunt made his reputation turning around the British bookstore chain Waterstones. He did it again with Barnes & Noble. Here is how Ms. Harris describes how he did it –

His theory was that chain stores should act less like chain stores and like more independent shops, with similar freedom to tailor their offerings to local tastes.


He repeated that approach at Barnes & Noble. While orders for locations around the country used to be placed by a central office in New York, today a diminished central office places just a minimum order for new books, leaving store managers free to choose whether to bring in more copies based on local sales.

By moving away from the notion that there is an average shopper and
recognizing that in a globalized world, there are still very local tastes and
passions, Barnes & Noble has reconnected with consumers. Consumers of more
than books, consumers of what is in books.

That was not his only insight. He recognized that taking publisher dollars in exchange for end-caps and promotions was ultimately a losing proposition.

Barnes & Noble has also stopped taking fees from publishers to place particular books in highly visible spots, like by the entrance or in the window. It seemed like free money, Mr. Daunt said, but it caused a cascade of problems: Books nobody wanted to buy were prominently displayed, and big orders that didn’t sell had to be shipped back.


“Although it looks like we’ve piously held our hands up and said, ‘I don’t want to take the money,’” Mr. Daunt said, “we’ve actually said, ‘I don’t want to incur all the costs associated with taking that money…

The lesson learned from Barnes & Noble is that true success, whether you are a bricks-and-mortar toy or book retailer, comes from providing people with a reason to stay awhile, browse and even meander. In the case of the toy industry, more is more. The greater the variety and the more curated the toy store, the more experiential the store visit becomes. Spending time as a family, browsing aisles at a leisurely pace, and chancing upon the unexpected is the key to bringing in customers and getting them to purchase more than they ever intended.

3 thoughts

  1. B&N seem to have adopted the grocery store effect = I go for bread and milk then decide to also buy frozen meals for everyone instead of cooking and get some desert and packaged salad just so we all have something green to eat as well as salad dressing and a box of crackers but add bread sticks too for a little something different. Then since the store has nearly bare shelves of TP I grab whats there knowing inflation means next time the price will increase.
    End up paying much more than I intended to.

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