Waterstones and Amazon's Kindle turn a new chapter


Leo Kelion talks to Waterstones's managing director James Daunt about his company's relationship with Amazon

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It was the twist no-one saw coming.

After previously describing Amazon as "a ruthless, money-making devil", Waterstones's managing director, James Daunt, announced in May that he was teaming up with the US internet store and would sell and promote its Kindle tablets and e-readers in the UK's premier book chain.

Few predicted a happy ending: "A deal for destruction", "Strange bedfellows", and "Waterstones let the fox into the chicken run" exclaimed some of the resulting headlines.

Had the former JP Morgan banker doomed the group less than a year after being appointed as its managing director?

"A world that is totally dominated by Amazon will be a poorer one," Mr Daunt tells the BBC when asked about the decision.

Jeff Bezos and Kindle Paperwhite e-reader Amazon's boss, Jeff Bezos, says his firm sells Kindle e-readers and tablets for break-even prices

"But that is not to say that I don't think that Amazon is - within the limits of what it does - absolutely fantastic."

Secret deal

The 49-year-old has already distanced Waterstones from its roots, dropping the apostrophe in its name to the dismay of punctuation campaigners. But the decision to ditch Sony's e-readers and promote Amazon's is clearly his most controversial to date.

For someone who has apparently signed his company's death warrant he appears focused and optimistic about the group's future, determined to complete a costly refit programme designed to upgrade its 300 stores.

And though he remains tight-lipped about the terms of the Amazon arrangement, he insists the agreement is to his advantage, whatever others suggest.

"I certainly won't tell you what I'm going to make with Amazon, but what I will freely admit is that we have a commercial business here, and we make sensible commercial decisions.

"I have, rather flippantly, also said: 'Do I look like a total moron? Because what you're describing is the behaviour of a total moron.'

"I may be many things, but I don't think I'm that."

Model hold Sony e-reader Mr Daunt ditched a previous deal to sell Sony's e-readers shortly after taking charge

Although the criticisms may have stung, Mr Daunt believes he has made the pragmatic choice. His customers are increasingly reading books on digital devices with Amazon proving their most popular option.

To ignore the phenomenon, he argues, would undermine the bookseller's relationship with its readers.

"If they choose to read digitally I have to become involved in that game," he explains, adding that it would be beyond the firm's resources to develop its own family of tablets and e-readers.

Instead he plans to offer add-on services - allowing visitors the chance to use Kindles to browse Waterstones's own recommendations and then read them for free while in-store.

Start Quote

Do we have an awful lot of books in our shops that don't frankly sell? Yes, and they actually shouldn't be there”

End Quote James Daunt Managing director, Waterstones

"The principle is simple," he says.

"You are in a bookshop, you can pick up any of these books - you haven't bought them yet - you can browse them. Until you leave the shop you don't have to pay for them, and that same principle should apply to a physical device as well as a digital e-book."

Ultimately he hopes to be able to tailor recommendations to each shop's location and staff - but even in its basic state the feature won't be able to launch until technical issues are worked out and publishers sign up.

Hot drinks

Reports have suggested one way Waterstones would make money out of the deal would be to take a cut of each Kindle sale made over its stores' wi-fi networks. Mr Daunt would not confirm or deny the claim, saying only: "We make money out of everything we sell."

A potential problem with this model is that once shoppers try out an e-reader - whether its a Kindle, Nook, Kobo or other device - they often browse bookshops's shelves, make lists of what they want but then buy via the internet at home.

The e-book trend may be inevitable, critics say, but embracing it will only hasten Waterstones's decline. Mr Daunt suggests they misunderstand his methods.

Cafe W inside Waterstones in Norwich A Norwich branch of Waterstones was one of the first to be fitted with a Cafe W outlet

"All that we have to do is encourage people to come into our shops and to choose the books," he says.

"I don't frankly care how they then consume then, or read them, or indeed buy them.

"But if you spend time in my shops, and you really enjoy it, and you come back more often and spend longer - you're going to spend money in my shops."

That money won't necessarily be on books. Waterstones stores are already stocking more stationery, games and puzzles. The next step is to create cafes inside the chain following a successful trial.

"It is literally the booksellers that's made you the cup of coffee," he says. "Yes, it's slightly grubby that you've handed over two quid to get that cup of coffee - but it is extremely nice.

"The conversation as you buy your latte is often about the book and it's a really fantastic thing. And our sales have leapt."

The move may appall traditionalists, and making space for coffee and Kindles does ultimately mean less for bookshelves. But Mr Daunt says the action is overdue.

"Do we have an awful lot of books in our shops that don't frankly sell?" he asks.

"Yes, and they actually shouldn't be there. I do think the shops will have less books, but they will remain absolutely first and foremost physical bookshops."

Kindle display unit Kindle display units were installed weeks before the launch

Fiction, cookery and biography will stay, he says, but specialised topics, such as law studies, face the chop.

'Fundamentally unsatisfactory'

At the core of his strategy is the assumption that if his staff make the right picks and provide the right environment, customers will want to spend time in a book-browsing environment.

"I certainly believe that ownership of the physical book does matter," he adds.

"Whereas that little file embedded in a piece of plastic isn't pretty to look at. You can't lend it. You can't sell it. And you can't bequeath it to your children.

"Digital is convenient in some situations - travelling, or reading at night when you don't want to wake the wife.

"But it is also fundamentally unsatisfactory in all sorts of other ways. And that will preserve the physical book as being the majority choice for some foreseeable time, even fiction."

Whether Waterstones's next chapter goes as planned will now depend on how much the public are as wedded to the traditional format.


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  • rate this

    Comment number 229.

    I think there needs to be a recognition that specialist books are preferred in physical format - Sadly it enourages my husband and I to go to london to Foyles or forbidden planet for our physical books - as waterstones do not have the range. 'Disposable' fiction we'll read on the kindles

  • rate this

    Comment number 228.

    Language creates the world. We see the world language describes. Without words, we have NO reality, no civilisation, no humanity. You need to educate yourself, read some Wittgenstein perhaps....

    Like all analogue devices, a book is its own solution. Its identity is bound up with its size, shape, texture, smell, its history, the ink used in printing, etc. It enables cognition by FORM.

  • rate this

    Comment number 227.

    @listener, what you say about the look and smell of a real book is true. But electronic books are more convenient & easier to buy. My wife gave me a Kindle last Xmas, didn’t think I’d take to it but I have. There will always be demand for physical books, but it’s going to become more of a niche market as time goes on. Physical books are expensive, heavy, take up lots of space and wear out.

  • rate this

    Comment number 226.

    'James Daunt...former JP Morgan banker'

    Says it all really.

    In a world where information has become ephemeral (i.e. electronic and therefore essentially transitory), hard copy books are essential.

    Paper books must continue or our culture will end and be lost forever.

    If Hamlet were written in a Kindle 400 years ago would we still have it now?

  • rate this

    Comment number 225.

    I love my Kindle - it's the best thing to happen to reading on the move since the paperback book, but there's no substitutute for a book if you want to read in the bath.
    A book might just survive being dropped, my Kindle - no chance!

  • rate this

    Comment number 224.

    Times change. Companies need to keep up with change or go the way of the dinosaurs. This makes complete sense as a business model.

    Many of us prefer to curl up in bed or relax in the bath with a good book in the old fashioned way of paper and print and I don't think that books as we know it will die out completely, but e-books are on the rise and Waterstones have to keep up and embrace it.

  • rate this

    Comment number 223.

    As a computer scientist I can tell you that electronic media has had zero impact in increasing peoples' understanding of how the machines actually work. Of course, consumers THINK they understand their ipad or ebook. Which is probably even worse. As we always say, RTM (read the manual) if you want to actually know anything; a paper manual naturally.

  • rate this

    Comment number 222.

    e-books are inevitable and Daunt is doing the only thing possible to save the Waterstones business. The printed book will only be found inside museums inside twenty years, just like tape cassettes. Or possibly the choice of enthusiast collectors as Vinyl records have become. Waterstones will be a chain of coffee shops by then.

  • rate this

    Comment number 221.

    I have a kindle which is useful for travelling and larger books (I have both the Complete Sherlock Holmes and Complete Hitchhiker's Guide tothe Galaxy and others), but I do love feeling a book when I read it.
    I don't have a Waterstones near by, and normally if I read a book it comes from the library or somewhere about my house where it has either been a present from someone or inherited somewhere.

  • rate this

    Comment number 220.

    A retailer adapting to the changing demands of the High Street and consumer preferences to offer a better "in shop" experience.

    If more before them had decided to adapt in an evolving retail environment, more may have saved themselves.

  • rate this

    Comment number 219.

    I use a kindle when at home or on a plane, but when I'm on the tube I use the kindle app on my iPhone which syncs to the last page read.

    I only use dead trees for reference books and cook books.

  • rate this

    Comment number 218.

    188.Francis power - ".......will soon discover what it is to have IP stolen by pirates............"

    That is effectively already happening & has been for longer than I've been alive - we have a book club in the village.

    People buy the odd book each, then as each is read they are passed round the group until everyone has read them.....1 sale, many readers.....on line is no different.....

  • rate this

    Comment number 217.

    It’s true I often spot books in Waterstones, but buy them electronically on my kindle because it’s cheaper and more convenient that way.

    Amazon still have issues with users not finding it easy to discover new books through them, people still like to browse in person, a strategic alliance with Waterstones may be the solution they have come up with.

  • rate this

    Comment number 216.

    If people were as pedantic about Engineering in the same way as they correct other people's Grammatical foibles we'd still be in African Grassland running away from anything bigger or angrier than us.

    Most of us just communicate, Language is a tool not a burden.

  • rate this

    Comment number 215.

    Reading is different from comprehension. And this is the point. Assimilating information from electronic media is qualitatively different (and inferior) for a number of reasons - but mainly due to apprehension by FORM and not merely by content. A paper book represents a thing in itself. Its content interacts with texture, etc. Whereas like all screens, the ebook is a simulacrum.

  • rate this

    Comment number 214.

    I guess you call this modernisation. You can't fight change - to survive you need to move with it. At least we will still have book shops - combining this with a cafe and ability to use e-readers in store sounds potentially a successful model.

  • rate this

    Comment number 213.

    Sitting here I am surrounded by 'dead-tree' books... and by a massive e-book library as well. I am quite determined to have my cake and eat it.

    Don't care for Kindles, though, too big and clunky - I use a PocketPC with e-book software, that's truly portable & pocket-sized.

  • rate this

    Comment number 212.

    I for one think it's a great idea! I am a librarian and use Waterstones for work "shopping" as well as my own. I'm sure I'll be taking my Kindle with me next time I do a stock pick to add a few books I've seen to my own collection (at my own expense I hasten to add!)

  • rate this

    Comment number 211.

    200. Shirker
    'Fewer' books dear chap, 'fewer'.

    I think a pedant could argue against that. For a bookseller, "books" equates to stock and you would say less stock not fewer stock. It does however indicate a certain disregard for the product(s) but that's not really a surprise; he is a former banker, so he'd be expected to know the price of everything and the value of nothing.

  • rate this

    Comment number 210.

    I have a Kindle, and do buy books when away from home for convenience. MUST be non fiction! There is nothing to beat a proper book, which you can highlight and annotate to your heart's content, in your hand!


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