Waterstones: Kissing Their Customers Goodbye

Brave New World - Tuesday, May 22, 2012

Today we read the opinions of many in the trade and business press on the surprise move by James Daunt to let Amazon in to Waterstones through the front door. It is interesting to note that many state the obvious and then pull back to cover the bases just in case it’s a move that may win. Many talk about the so called capitulation over digital and hand over of that business to Amazon. Many cover the usual hypocrisy of some statements made about Amazon before Daunt’s cathartic moment, when the lights came on and he became a believer.

Irrespective of all the noise, the one fact that one can’t get away from, is that Waterstones is not just handing over their digital futures in terms of sales but more importantly the very thing that drives them - their customers. It’s no surprise to be told that book readers like a mix of physical and digital and that they are often eclectic in their reading taste, but to build a strategy on retaining the physical business at the expense of the digital is at best questionable at worst naive. However, the real issue is about customers, today, tomorrow and for ever.

Waterstones couldn’t tell you today who walked in their store, what they browsed, what the dithered on, what they bought and even if they had been in the store previously or bought at all in the past. Yes apart from their online business they are relatively clueless unless the customer has a loyalty card and uses it. Amazon will log, what was bought, what wasn’t bought, what was bought with what, what was browsed, what pages were browsed and literally every aspect of the sale and every related salel. Reusing this information proactively is what the future is about and is what Waterstones is effectively handed over. They have consigned their business to mass marketing with a little direct marketing on the fringe – hardly a wise move or something any retailer should be even considering today. They may know who bought a Kindle and their first purchase but after then they may be kissing them goodbye. Is that giving the customer what they want or just naïve retailing strategy?

So the reality is that the deal is not just about digital, and online it about really knowing what your customers want and not what you think they want.