|What Barnes & Noble Doesn’t Get About Bookstores|
By David Sax
The New Yorker
October 21, 2016
Leonard Riggio is looking to emulate the very businesses Barnes & Noble once threatened. But he may be missing the bigger lesson of independent bookstores and the intangible experience of shopping there. Credit Photograph by Craig Warga / Bloomberg via Getty
In April, Leonard Riggio announced that he was stepping away from Barnes & Noble, the business he bought forty-five years ago and transformed into the world’s largest brick-and-mortar bookstore chain. Come September, Riggio, now seventy-five, would happily retire. Or so he claimed. Though he had ceded the title of chief executive in 2002, Riggio remained the executive chairman and the soul and supreme authority of Barnes & Noble. Still, it seemed like a safe time to step down. Pummelled in recent years by Amazon’s dominance over the industry, and the hangover of the recession, Barnes & Noble had closed more than ten per cent of its stores and fended off hostile takeovers, but it was still alive. Its losses had levelled off, and sales were actually growing in many categories, including board games, vinyl records, and even some categories of books, the non-digital kind (like coloring books for grownups). In March, the company announced plans to open its first new stores in several years, and in June it unveiled its potential future: smaller locations, with full-service bars and restaurants, and a more boutique feel. It seemed to be a move away from the model of “superstores” that the company once defined itself by.
But then, in August, Riggio and the board he leads ousted Ron Boire, who had lasted less than a year as chief executive, and was the third C.E.O. to pass through Barnes & Noble since 2010.* A few weeks later, quarterly financial results presented shareholders with the cold reality of Barnes & Noble’s troubles. Losses were mounting across the board—particularly for the Nook, the company’s troubled wireless reading device—and sales were falling more quickly than expected. The company’s stock was almost a quarter of what it had been a decade ago. In response, Riggio has returned to the chief executive’s chair, ostensibly until a suitable replacement is found.
The key question for Riggio now is figuring out what purpose Barnes & Noble serves today. Amazon dominates the industry with low prices and a vast selection, and is even flirting with brick-and-mortar bookstores, having opened two in the past year. Independent bookstores—once assumed to be on their way to extinction—own the romantic notion of a bookstore as a place, like a church or a social club, where communities are nurtured. Barnes & Noble is stuck in the middle, a giant saddled with hundreds of huge stores, and an image of corporate sameness in a market that has increasingly come to treasure defiantly independent bookstores.
In redefining the company’s purpose, Riggio is looking to emulate the very businesses Barnes & Noble once threatened. After two decades in which the number of independent booksellers decreased by half, those bookstores are now coming back. The American Booksellers Association noted a consistent increase in new store openings over the past seven years, with growth of more than thirty per cent. These include small urban stores, such as Brooklyn’s Greenlight and Word, but also regional chains, like Bull Moose, in New England.
In a recent phone interview, Riggio said he believes that the biggest shift in the book retail business (besides the one caused by the Internet and Amazon) was fundamentally demographic. Over the past fifteen years, as young Americans and their families returned to urban centers in significant numbers, the market for independent bookstores became viable once again. “The retailers that are now resurgent in those areas are typically populated by smaller stores, because the architecture of those spaces are small,” he said.
As far back as 2000, Riggio said that he believed Barnes & Noble should open smaller stores (the company’s typical superstores are more than twenty-five-thousand square feet), in denser, more pedestrian-friendly locations. But, at the time, business was great, the suburban power centers were still growing, and the idea never translated into concrete action. “You blow some and you get some right,” he said, reflecting on the missed opportunity. “Timing is everything.”
Ultimately, this hurt Barnes & Noble, whose core business rests on big numbers of huge stores, even in urban centers like New York. The move to open five smaller concept stores—about twenty per cent smaller than its average store—in the suburbs of Minneapolis, Sacramento, Dallas, Washington, D.C., and New York City, sometime in the next few months, seems a somewhat belated attempt to remedy this.
Riggio believes that the same type of person shops at small independent bookstores, Amazon, and Barnes & Noble. “The No. 1 consideration of where someone will shop is how close it is to where they are,” he said. “It has nothing to do with pedigree or branding. If there’s no bookstore close to them, they’re more likely to buy online. If there’s one close, they’re more likely to buy if it’s a block away.” His target market is the same as other book retailers: young, educated customers, and women with small children.
The only thing that he believes distinguishes new-generation independent bookstores from Barnes & Noble is better food and drink, which is something he hopes to capture in the new concept stores. Those stores will have Scandinavian-looking cafés with fully licensed bars, serving breakfast, lunch, and dinner.
While a number of successful independent bookstores have cafés and good coffee, Riggio may be missing the bigger lesson of independent bookstores and the intangible experience of shopping there. The independent bookstores that have proved successful are uniquely suited to the community they’re in. Some are big. Some are small. Some are homey and stitched together with found shelving. Others are practically works of art and architecture. They stock the books that the community wants, and, while their selections are minuscule compared with Barnes & Noble, the staff can speak to the books on those shelves with authority. In other words, they are all different. An analogous example sits right across from the flagship Barnes & Noble, in Union Square, in New York City: a greenmarket that draws in people who want to browse, socialize, and take photos of pumpkins, even if they can buy the same foods and products at the Whole Foods Market on the south side of the square. The brick-and-mortar stores that do best today are the ones people want to shop in, not the ones they have to.
Riggio argues that, despite being a large corporation, Barnes & Noble can serve a community function. “The people who shop at our stores see us as the local Barnes & Noble,” he said, noting that the company basically transformed bookstores from places filled with products to retail environments with comfortable seating where patrons were encouraged to linger. Part of the company’s plans for revamping its retail includes more on-floor sales staff with better information, and increased autonomy for store buyers to stock the merchandise that’s relevant to the local customer base. “We have been community centers since we entered the business,” Riggio said. “You can’t just dismiss us with the broad brush of ‘Well, that’s a chain.’ Otherwise, you deny that the three billion books we sold ever happened.”
But to run six hundred and thirty-eight stores, most the size of several independent bookstores, you need standardization, in everything from design and selection to the clothes employees wear. It’s unlikely that Barnes & Noble will ever shrink to a scale where it can shake off that uniformity, nor would it be wise to try. While many love to bash Barnes & Noble as a disrupted dinosaur, and gleefully talk about its impending demise, the reality is that the world of American books, and bookstores, would be poorer without it. If you live in certain areas of the country, Barnes & Noble is your local bookstore. It’s where you go to hear authors speak, where you stock up on Christmas gifts, and where you take your children to hear stories. Every industry needs its standard-bearer, just as the third-wave coffee shops need their Starbucks to rebel against.
If Barnes & Noble does persevere, it will undoubtedly look different from the Barnes & Noble we see today. Likely it will resemble something akin to a more human-scale bookstore chain. That may mean closing more stores, though Riggio wouldn’t comment on that.
“You look at bookstores and a book market as more of an evolving issue than this type of store or that type of store appearing or disappearing,” he said. “It doesn’t really happen like that. It plays out over a long period of time.” For the sake of the millions of readers across America who still see Barnes & Noble as their neighborhood bookstore, let’s hope it does.
*This sentence has been corrected to clarify that Leonard Riggio does not control the Barnes & Noble board.
David Sax is the author of “Save the Deli” and “The Tastemakers.” His next book, “The Revenge of Analog,” will be published in November, 2016.