Barnes and Noble CEO Decentralizes Purchasing

February 15, 2021
Barnes and Noble CEO Decentralizes Purchasing

Breathing life back into bookstores is a passion of James Daunt, the latest in a string of CEO’s tasked with helping Barnes & Noble make a comeback.

Daunt’s strategy centers around decentralized purchasing and granting store managers freedom to choose a look and feel that caters to local residents and draws customers in.  He is fighting for the future of brick and mortar booksellers and is determined to win.

Video Spotlight: 

This post is based on the Fox Business article and video, Barnes & Noble’s new boss tries to save the chain – and traditional bookselling, by Jeffrey A. Trachtenberg, December 5, 2020; the Forbes article, Will Barnes & Noble’s Next Chapter Be Its Last?, by Russell Raath, February 9, 2021; and the YouTube videos in the Spotlight. Image source: PIXTAL/AGE Fotostock

Discussion Questions:

1.  How do Daunt’s new purchasing policies differ from those of the past?

Guidance: The strategies that grew Barnes & Noble into a huge success 20 years ago depended on centralized purchasing to achieve economies of scale and store uniformity.   Today, Daunt is replacing that approach as part of his strategy to revive the struggling bookstore’s chances of survival in the face of competition from online retailers like Amazon.

Daunt intends to make bookstores a special place of discovery, different from what customers experience when shopping online.  Local managers will have the freedom to purchase books by regional authors or that appeal to area interests.

He further plans to diversity the look of each store by allowing his booksellers to arrange and display their offerings however they see fit.  He expects about 25% of stores to improve performance as a result, and 25% to regress.  However, he envisions having regional staff overseeing and coaching lower performing stores to help them improve their strategies.

He employed a similar approach as CEO of Waterstones booksellers in the U.K., and though it took four years, it was a success.

2.  How have the policies instituted at Waterstones affected the store’s return rate?  (Return rate is the percentage of books that stores send back unsold to publishers.)  How might the new strategies at Barnes & Noble’s improve its performance in this area?

Guidance: The return rate at Waterstones is 3.5%, while Barnes & Noble currently stands at 25% overall – and up to a 50% return rate on new, untested titles.

The cost of reverse logistics can be great, as can the opportunity cost of taking up valuable retail floor space with titles customers don’t want to buy.  Having local booksellers play a bigger role in book selection should help get Barnes and Noble’s on a better track.

Daunt fired about half of the book buyers in the centralized New York office, and changed how headquarters works with publishers that used to pay for book placement in stores. These actions should also help facilitate a lower return rate.


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