Why bookshops should fight competition from Amazon with less – not more – branding

Science fiction titles on display at the Waterstones book shop in Trafalgar Square, London.
Victoria Jones | PA Images via Getty Images

When debate heated up earlier this week concerning a major British book retailer's operation of stores resembling independent sellers a little too closely, some outraged customers accused the company of deception.

But according to the managing director of Waterstones, the bookseller in question, this more unusual approach to branding is all part of his company's jostle for market share with online retail giant Amazon.

James Daunt, Waterstones managing director, told CNBC via telephone that "the only way to counter Amazon" was to win customer loyalty, rather than reducing prices. For Daunt, this was best executed with an understanding of the "need to be idiosyncratic to high streets." As far as Waterstones was concerned, he was keen to "overturn the conventional idea of branding," that fonts, logos and signs should all be uniform.

Daunt detailed that he was pushing a "culture change" at the company which embraced the mindset of independent sellers, and without doing so, fellow bookseller across the pond "Barnes & Noble will have a very tough time."

Since the Waterstones story made national press in the U.K., Daunt said that he had received roughly 40 e-mails asking for such pseudo-independent shops to be opened in various areas across the country. The company is "only going into places where independent bookshops have been and closed," he added.

Daunt clarified that while the shops in question operate under a completely different name, they are clearly run by Waterstones – a major giveaway being that they accept company loyalty cards.

Barnes & Noble, the largest bookseller in the U.S., told CNBC via e-mail that they were "testing various store concepts," though did not give any clues as to what these could be "for competitive reasons."

According to the Office for National Statistics, the U.K. retail sales in its "Books, Newspapers & Periodicals" category has declined in the past few years, with weekly sales in 2016 being down six percent in comparison to a year earlier.

Waterstones is not the only chain retailer to experiment with unbranded stores. Starbucks confirmed to CNBC via telephone that they currently operate one store under completely separate branding. Roy Street Coffee in Seattle has been open since 2009, describing itself on its website to be "inspired-by-Starbucks."

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