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Waterstones and Kindle

Waterstones started selling kindles in their stores today. That’s not a surprise, the date’s been long-trailed, but it is still an important step in UK book retailing.

The offering is a fairly simple one. You can buy kindles in-store, and if you do you get points on your Waterstones’ loyalty card for the purchase. Soon there’ll be wifi in stores (it’s not ready at launch) so you can browse Amazon and buy books on your kindle while still in the shop. Staff will help set up kindles (not that most people will need much help, they’re pretty simple devices) and of course offer advice on which books to buy.

Interestingly, you don’t get loyalty card points for ebook purchases, even if bought while you’re in the store. You will though be able to browse books on your kindle while in-store, and as long as you’re in-store you can keep browsing to your heart’s content – you’re not limited to just reading a sample. You could, if time were no object, just sit there and read entire books in full.

Intuitively none of this looks like a smart move. Waterstones is providing shop frontage and promotion for its biggest rival, and selling a device which allows readers to buy books from the comfort of their own home and have them instantly delivered. Intuition though is often wrong.

Here’s how I think the Waterstones’ offering will progress, and how I think they’re looking to monetise this. To make this work Waterstones need to increase in-store dwell time. Basically they need to get potential customers to stop in the store, browse, and stay long enough that they either decide they like the book they’re considering and so buy it on the spot, or feel they should buy while there out of some vague sense of obligation given they have spent so much time in the shop.

To achieve that you need more of some things, and less of others. The more is chairs and coffee. The less is books.

Browsing physical books is a mobile activity (at first anyway). The reader wanders among shelves, picking up books, looking them over, putting some back. Eventually they may wish to sit down and look at a few in greater depth, but initially at least they’re walking and looking.

Browsing a kindle is a sedentary activity. Walking while reading a device is a recipe for collisions. The reader here will want to sit down immediately, to have some time in a comfortable place where they can use their kindle to look up books (which frankly isn’t the smoothest way to access the Amazon store in my experience) and to have a bit of a read of the books they decide to consider.

When most of your browsers are just wandering the shelves you don’t need that much seating. In fact, you can perfectly well get away with no seating at all (though in larger stores there’s usually some somewhere). When most of your browsers want to stay still for extended periods of time though it’s obvious you’re going to need a lot more places for them to do so.

Equally, if you want browsers to linger, to enjoy the e-browsing experience, coffee makes a lot of sense. US stores have long led on combining in-store coffee houses and books, but plenty of UK bookstores have followed that lead. My beloved London Review Bookshop even has a (excellent) cafe attached. With kindles you also don’t have to worry about customers damaging the books they don’t buy by putting them in puddles or crumbs (I realise kindles don’t do well in puddles either, but it’s the customers’ kindles as opposed to the store’s books and anyway, most people are careful what they put their consumer electronics down onto).

So, more seating and where possible coffee. The shops though aren’t magically getting bigger to accommodate all this - something has to go. The obvious thing is books.

That doesn’t mean Waterstones will stop selling books of course. It just means it will stock fewer of them. Likely fewer multiple copies of the same title, but also perhaps a greater focus on the books people are likely to buy in hardcopy. I’d expect in a year or so, perhaps sooner, to see more space devoted to gift titles, stationery, coffee table books and the like which the kindle doesn’t replace, and less to say the more obscure literary titles and back catalogue (though I could easily be wrong on what kind of books they’ll reduce stock of).

From a booklover’s perspective all this seems a bit depressing. If I’m remotely right (and the only safe prediction is that predictions are generally wrong) we’re talking about bookstores as places to hang out, to relax, drink coffee and use free wi-fi to check out titles on your kindle (again, a development of an existing US retail model). The shops will be attractive and will have helpful staff, but a larger share of physical product will likely be aimed at the non-reader, since the reader is online.

All that and it’s incredibly risky. The alternative scenario is people buy their kindles, maybe at Waterstones but equally possibly they’ll just try them out in-store, head home thinking about them and then buy them online from Amazon that evening. Those same people once they have their kindles may browse occasionally in Waterstones, but just leave books in their Amazon basket buying them later when they think they’re likely to get round to reading them. On that scenario Waterstones becomes just a large advert for Amazon, and eventually goes bust from lack of its own trade.

The problem is that there is no path forward that isn’t incredibly risky. Waterstones has a ton of expensive high street real estate. It’s business model is predicated in large part on selling physical books on a volume basis, but it’s plain to anyone paying the slightest attention that the mass market is moving online. Staying as they are is an option, but it’s not necessarily any less risky than what I’ve outlined above.

To survive Waterstones has to somehow adapt to the ebook. It’s made a start by selling ebooks through its own website, but Amazon’s market share in the ebook space is so overwhelming that there’s a real sense in which it’s the only game in town. If to the average reader the word ereader might as well mean kindle, then Waterstones’ choices are either to try to shift that perception (good luck) or to come to terms with it. They’ve chosen the latter.

Waterstones’ strategy is to become the cleaner wrasse to Amazon’s shark. That’s not the best outcome imaginable, but it’s a lot better than being eaten.

Anyone interested in this topic should also read this BBC interview with James Daunt, where he discusses some of the ideas regarding dwell time (not that he uses that phrase, it’s one I know from an airport investment I worked on) and coffee.

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