Waterstones’ local stores signal new chapter in fight against online
Waterstones landed itself in hot water last month with the launch of three ‘local’ bookstores, in Harpenden, Southwold and Rye. This sparked complaints from others in these locations, who felt that the national chain was misleading consumers by ‘masquerading’ as a small, independent.
Following on from the Tesco ‘fake farm’ furore last year, the whole issue of brand authenticity is a growing challenge for retailers. On one hand we know consumers are increasingly concerned about the provenance of what they buy – a recent GS1 report saying 60% of UK consumers feel that, for food, provenance is just as important as price or quality. Unsurprisingly therefore, brands are keen to create formats and ranges that tap into the desire for locally sourced products. On the other hand, in the era of ‘fake news’, people are more cynical about claims in this arena. A recent study by SheSpeaks and WomanKind claimed that 61% of female shoppers believe brands don’t live up to their promises. In this climate any false moves can be quickly pounced upon.
So why did Waterstones risk walking this tightrope? Since the acquisition of the book chain by Russian billionaire, Alexander Mamut, results have seen something of a recovery. Sales were up 4.3% to £409.1m and the brand turned a profit once more. However, it’s long been apparent that traditional booksellers are under huge pressure from several angles. The sector was one of the first to suffer the e-commerce onslaught. Today, increasing numbers of us are adding books to our weekly shopping basket in grocery retail, while more pressure is coming from the proliferation of e-readers and tablets. To top this all off, Amazon has entered the bricks and mortar arena – its 10th US store opening in Bellvue, Washington (see below).
In launching a local format, Waterstones is clearly trying to make a fresh response to this hostile scene. Aimed at customers in higher-value segments, it’s no coincidence that the stores have been located in affluent, rural towns. Secondly, the brand understands that those who buy books are particularly motivated by the concept of a local retailer – a YouGov poll for Cityam showing that 68% of avid readers prefer to shop this way. Our visit to the Harpenden store revealed several key ways in which Waterstones is playing the local card.
The shop-front is designed to fit well with the high street and local books feature prominently in the range. There has clearly been an effort to engage the community – pictures from local schoolchildren decorating the stairs to the first floor. Similarly, and in keeping with the main Waterstones estate, there are concerted attempts to connect readers with the staff, who supply handwritten book reviews (see below).
So far, the public reaction has been mixed. A Telegraph poll stated that 82% felt the new local stores were misleading, whereas a Metro survey found 61% were in favour. Meanwhile, The Guardian leapt to the defence of the format, asserting that ‘we all need more bookstores’.
It’s evidently a controversial time to be launching a format such as this. Small businesses are forecast to see their tax bills rise by 177% from April and anything that’s seen to heap on further pressure is likely to be met with some resistance from by consumers. The trick here, for the bigger players, is how to convey a sense of persuasive authenticity.
Our view is that Waterstones’ new format plays well to two of the emotions set out in ABA’s 5Drivers model. It offers an Immersion-led experience but one that, in its establishment of community links, is also strong on Belonging. As such, despite the pressures on the book sector, we believe this format will prove a success and foresee more of these stores springing up in future. If Waterstones continues to meet consumers’ needs by providing a quiet, friendly haven on the local high street, it can tap into these markets and continue its recent growth.