Waterstones and Amazon – The Digital Question

Posted on May 21, 2012


The news that Waterstones has got into bed with Amazon to sell its Kindle e-reader and e-books in stores has sent some quarters of the publishing world away quivering. But supping with the devil may have its advantages as The Fiction Stroker investigates..

Many people were interested when Waterstones announced today that they had partnered with Amazon to sell the Kindle in stores later this year. It almost seemed like a done deal had been done with Barnes and Noble to bring the Nook to our shores, but now it would appear that Microsoft beat them to it in a deal worth $300m. WHSmith has brought the Kobo in standard, touch and tablet iterations to stores but even heavy discounts (at the time of writing the basic model is just £49) indicate stock is not exactly flying out the doors.

Waterstones themselves have done a great deal to reinvent themselves from the mire that they were stuck in 18 months ago. Amongst refurbishments and reorganisation of stores, looking quickly at other changes to branches in the North West and beyond:

  • Gone is the infamous 3 for 2 offer to have been replaced by a greater variety of offers and discounts
  • Specially chosen ‘Book of the Week’ that is heavily discounted and promoted front of store
  • Local sections are very reasonably stocked and well-promoted within store
  • Variety of in-store events including regular book clubs, author signings and events attracting a wider audience such as Simon Savidge and Adam Lowe’s Bookmarked ‘Salon’ events

It has been speculated that the physical book market may become more tactile in response to the digital question. More and more luxury editions of books might become available to counter the mass paperback market. Certainly the Manchester Waterstones have stocked some impressive Victorian-style luxury hardbacks of classic stories by Dickens, Austen, and Wells et al with gilded lettering and marbled pages evoking the rich editions of yesteryear and worth collecting. Certainly by, or possibly even exclusively, stocking luxury editions, as Waterstones do with their slipcased and signed books, they are positioning themselves across a gap of the market that Amazon cannot.

Many observers have commented that Waterstones have squandered their chance to develop their own rival to the Kindle. I’m not so sure that this is a bad thing. Any such reader, like the Sony e-readers previously sold, may have its own proprietary file format and further fragment the e-book market. Even if not, partnering up to sell the best selling e-reader in the UK is a shrewd move. Either Waterstones moves to take some of the market, or it risks floundering even further.

Despite MD James Daunt’s comments in the past that Amazon is a “ruthless money-making devil”, it is clear that Waterstones feels outmanoeuvred enough by the e-book industry and recent downward trends on the high street to do a deal with this devil. However, marrying Amazon’s instant delivery with Waterstones expertise may reap benefits for the customer. It is very difficult to wander onto something on Amazon’s web portal – but being able to window shop and then choose between the physical product, or a e-book product is a shrewd move to benefit the consumer. Whilst this might be one of the last throws of the dice for Waterstones in its current incarnation, it’s a sad reflection of the fact that they should have been at the forefront of the digital question – not trying to define it years after the event.

For me, I think this is a necessary move that can only benefit customers. Without knowing the exact terms of the deal, it is difficult to know how Waterstones intend to take a cut on every Kindle, and maybe e-book sold – if the prices aren’t competitive, it’s just not going to be worth it. Waterstones are going to have to up the ante here and become competitive not only in print but online too – which may bring e-book and print prices into parity. Synchronising the two from a point of sale perspective will be tricky, but not impossible. In the meantime, the debate will rage on and on over the summer.

The Kindle will be available in stores from the Autumn.

Posted in: Opinion