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Department stores today rarely offer books, music, films and other “cultural” goods. These have reverted to specialists, chains and online retailers. However, the chains have consolidated and are doing less well; and the digital retailers appear to have peaked, while smaller, local booksellers are gaining in popularity. Is it possible that department stores could once again find a place for these goods in their local offer which has gained in popularity during the covid pandemic?

In the beginning was the word

One of the earliest US department stores, Marshall Field’s in Chicago, was famous for its customer service (“give the lady what she wants”), its revolving credit and for the use of escalators. But in terms of assortment, it was notable among other things for its legendary book department which introduced the idea of “book signing”. Its book department is now long gone (the store trades as Macy’s) as indeed book departments in so many department stores have disappeared.

These book departments were often paired with music (vinyls, cassettes, CDs) and films (VHS, DVDs) which have undergone such a revolution, both technological and commercial, that they quickly became the exclusive domain of specialist retailers which have now more or less completely gone digital.

But what happened to books? Department stores were the victims first of the growth of specialised

https://www.iads.org/files/pmedia/public/r6675_9_booksellers_that_have_closed_for_good_across_the_years_business_insider.pdf

r6675_9_booksellers_that_have_closed_for_good_across_the_years_business_insider.pdf

. These included in the US, Bookstop (1982) acquired by Barnes and Noble; Borders Books (1971) taken over by Kmart and eventually liquidated in 2011; Crown Books (1977) liquidated in 2001; Waldenbooks (1962) merged by Kmart with Borders and liquidated in 2011; B Dalton founded by Dayton Hudson department stores (1966) acquired by Barnes and Noble in 1987 and operated until liquidation of the last 50 stores in 2109.

In the UK, a similar growth and consolidation movement was taking place with Dillon’s, Ottakar’s, Books Etc (part of Borders), and the 115-year-old Foyles gradually becoming part of Waterstone’s.

“You’ve got mail”

This growth of book chains was portrayed in the 1998 movie You’ve got Mail about the giant book chain threatening the local bookstore business. According to Experian, the number of UK bookshops fell between 2005 and 2012 from 4000 to 1878.

However, neither of the two book giants Barnes and Noble nor Waterstones is currently finding life easy, not least because of the entry onto the market of Amazon, starting slowly in 1994 to digitise the book business first through online selling of paper books, then through digital book sales.

While the sale of e-books was growing, that of physical books continued to fall, for example from from

https://www.iads.org/files/pmedia/public/r6677_9_rise_of_e-books_results_in_50_of_bookshops_closing_down___the_drum.pdf

r6677_9_rise_of_e-books_results_in_50_of_bookshops_closing_down___the_drum.pdf

. However, others claim that the decline of bookshops has now significantly slowed, and furthermore, that the number of independent bookshops grew by 35%

https://www.iads.org/files/pmedia/public/r6676_9_why_the_number_of_independent_bookstore...pdf

r6676_9_why_the_number_of_independent_bookstore...pdf

.  E-book sales have recently been fairly static and subscription services modelled on Netflix or Pandora have struggled while the resilience of paper books have proved a boon to independent booksellers

https://www.iads.org/files/pmedia/public/r6678_9_the_plot_twist__e-book_sales_slip_and_...pdf

r6678_9_the_plot_twist__e-book_sales_slip_and_...pdf

. E-book titles have been declining generally, including for example Italy where they fell by 5.4% in 2019 after falls of 17.2% and 15.9% the two previous years.

The rebirth of independents

Waterstones, which appeared to be in deep trouble ten years ago, is reinventing itself under James Daunt of the ex-independent bookshop on Marylebone High Street in London, Daunt’s bookshop (now part of Waterstones). Elliott Management, Waterstone’s owner, agreed in 2019 to buy US Barnes and Noble in a $ 683 m deal. James Daunt will move to New York and attempt to work his magic on the 627 US stores at the same time as continuing to lead Waterstones. He claims that in the book trade, Amazon has probably reached the peak of its influence and that there are limits to the online experience.

One of his strategies at Waterstones’ 280 shops has been to devolve power to local managers particularly over purchasing. This contributes to a more efficient management of stock, reducing the costs and time involved in handling returns, books bulk ordered by head office with little regard for differences in regional reading habits.

One of the competitors which Barnes and Noble will be facing is, of course, Amazon itself whose 20 or so shops around the country are benefitting from the data that Amazon collects on the market. Publishers on their side are suffering under the brutal negotiating techniques of Amazon which is threatening publishing as it has already music and films. On the other hand, of course Amazon has opened the world of books and enabled publishers to reach a wider market.

The local offer for the local department store

Notable bookshops around the world include Daunt’s in London or Lello in Porto representing an almost caricatural but striking model of traditional bookshop architecture; The Strand in New York with its reported “18 miles of books” and its passion for everything written including banned books; Shakespeare and Co in Paris, the archetypal writers bookshop with its rich history of famous patrons (which is suffering badly during the current pandemic); Livreria Cultura in Sao Paolo serving as a spacious and comfortable meeting place in modern design style; Starfield in Seoul with its truly breath-taking height of bookshelves. All of these demonstrate the importance of branding, each one immediately recognisable in ways that the chains cannot match with their “cookie-cutter” formats, however innovative they may seem at first.

They also all know their customers and have made deliberate choices. A more recent version of this is the local focus of the kiosk formats emerging in Barcelona which cater to local customers and offer targeted press, magazines, coffee, and some seating.

Some department stores have not abandoned books. Indeed, Harrods entrusted its book department to Waterstones for 20 years until 2011 (when it switched to WHSmith). De Bijenkorf in Amsterdam has handed its book department over to AKO, part of Audex, in their words a partner who is able to target the Bijenkorf customer. In a similar vein, Manor in Switzerland has recently signed a partnership with French international Fnac group to provide books, audio, video and electronics. Fnac has the same deal in Andorra with Pyrenées department store. Printemps in Paris has a collaboration with the emblematic Gibert bookstore. The BHV store in Paris offers a book selection which is tailored to its customers, as does the Bon Marche. KaDeWe has a selection of books and art on the fifth floor, Selfridges offers a selection, while Ludwig Beck in Munich still offers books alongside its famous and very substantial music department.

Whether or not these examples are profitable, they may nevertheless constitute efforts at generating traffic, which department stores are sorely in need of currently. They might achieve this through the local appeal of their offer, through the theatrical experience they generate, and through the contribution to the value of the retail brand, just as the book department at Marshall Field did in its early days in Chicago.

So what about department stores

If, as seems to be the case, there is a continuing market for physical books (and perhaps other cultural goods), department stores might consider regenerating their offer to customers in some form or other.

The offer might be centred around convenience (guides, reference books, magazines…) which is what Harrods appears to be opting for with WHSmith rather than Waterstones; or it could consist of inviting a local notable shop to open a branch in the store just as so many have invited fashionable restaurant formats into the store.

This raises the question of whether the culture offer should be own-run, an arguably costly solution, or whether it could be entrusted to a specialist as has been the case in Bijenkorf.

Whatever is decided, a book or cultural goods offer opens the potential of a collateral offer of stationery, writing, cards which can all be personalised, and which potentially may be more profitable.

Some department stores see books and more as part of a “gift” offer such as the Galeries Lafayette “System Bookstore”, the design department at Rinascente, or local museum shops, for example. Some books are published quite explicitly as gifts or coffee-table books, and books in general as gifts are traditionally seen as less personal than jewellery, but they say more about the giver. Amazon has a category explicitly allowing purchasers to send books as gifts.

Finally, books and indeed other cultural goods need not be grouped in a specific department but may be scattered around the store to create a lifestyle feel, just as Selfridges may sell cookery books in one of its restaurants, or fashion books in various departments.

Credits: IADS (Dr Christopher Knee)