How Waterstones rewrote the retail rulebook

 
Christi Tronetti
Hillary Clinton Book Signing
James Daunt has given his shops a more experiential feel, opening coffee bars and hosting author meet-and-greets (Source: Getty)

Many have blamed Amazon for what’s looking like the decimation of our high streets.

We’ve watched Mothercare go through some major c-suite manoeuvres and announce store closures in a bid to survive. Toys R Us, Maplin, MFI… all ancient history. It’s a retail apocalypse and ecommerce is killing off bricks and mortar.

But then there’s Waterstones, sitting quietly in the corner rewriting all the rules.

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Chief James Daunt is credited with transforming the book retailer’s fortunes – between 2011 and today, Waterstones turned a £32m loss into an £18m profit. Now it’s been snapped up by investment firm Elliott Advisors. But as a traditional book retailer, surely it should have suffered more than most at the hands of Amazon?

Waterstones has proved that it’s not always a case of “out with the old”. Don’t forget, TV was supposed to bring about the end of cinema; cars were going to signal the end of the line for train travel; and ebooks were supposed to write off paperbacks. Except none of that happened.

Daunt has faith in his product and an understanding of his market. And he recognises that book stores need to do more than shift bestsellers to survive. He’s given his shops a more experiential feel, opening coffee bars and hosting author meet-and-greets.

Other high street stalwarts need to look within if they’re to understand why consumers are falling out of love with them. We talked to 250 marketers from legacy brands to establish what’s going wrong. We also met execs from 12 of the fastest-growth emerging brands to see what they’re doing differently, and we put it in a report called Getting Your Mojo Back: Ten Lessons from Fast-growth Companies.

The results are worrying. A third of established-brand marketers admit that they’re not consumer-centric, and a fifth say their companies don’t make responding to customer needs a priority.

One of the lessons from the fast-growth companies was “know your enemy”. While everyone was pointing the finger at Amazon, Daunt realised that his real foe was the cookie-cutter high street, and the “godawful uniformity” of retailers like WHSmith. Eyebrows were raised when he “unbranded” several outlets, allowing them to have their own personalities, with in-store staff briefed to choose the books they felt would best suit local customers. He knows people want variety, quality, new ideas.

When we began working with Kelly’s of Cornwall, we realised that a key “enemy” of the brand was its lack of identity and provenance. Most ice cream brands could come from anywhere. Kelly’s wanted to attract a younger consumer, so we celebrated its roots in an innovative way, with the UK’s first Cornish-language ad.

The campaign went viral and today 1.2m new households are buying Kelly’s ice cream.

The challengers we spoke to also pointed out the importance of really knowing your consumer and having belief in your offering. Daunt has complete faith in his core product – the physical book – and the shop as a destination, where customers can flick through a novel while enjoying a coffee.

He has been able to hold his nerve in the face of ecommerce because he knows what his product is, who his customers are, and that Amazon is the least of his worries.

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