How Waterstones rewrote the retail rulebook
Many have blamed Amazon for whats looking like the decimation of our high streets.
Weve 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. Its a retail apocalypse and ecommerce is killing off bricks and mortar.
But then theres Waterstones, sitting quietly in the corner rewriting all the rules.
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Chief James Daunt is credited with transforming the book retailers fortunes – between 2011 and today, Waterstones turned a £32m loss into an £18m profit. Now its 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 its not always a case of “out with the old”. Dont 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. Hes 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 theyre to understand why consumers are falling out of love with them. We talked to 250 marketers from legacy brands to establish whats going wrong. We also met execs from 12 of the fastest-growth emerging brands to see what theyre 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 theyre not consumer-centric, and a fifth say their companies dont 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 Kellys 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. Kellys wanted to attract a younger consumer, so we celebrated its roots in an innovative way, with the UKs first Cornish-language ad.
The campaign went viral and today 1.2m new households are buying Kellys 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.
Read more: "Very strange bedfellows": The logic behind Waterstones' sale to Elliott
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