British Bookseller Waterstones and Amazon Cut Deal to Merge Bricks-and-Mortar and Digital Experiences (Roundup)

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British bricks-and-mortar bookseller Waterstones will sell Amazon’s Kindle devices in its stores and offer wi-fi to readers so that they can both browse print books and buy e-books at the same time. The move is part of a larger re-boot, said the UK’s largest bookseller (Waterstones to sell Amazon’s Kindle book reader):

UK bookseller Waterstones is to sell Amazon’s Kindle book-reader and launch other Kindle digital services.

Waterstones says the deal will dovetail with its current store refurbishment scheme, which is creating dedicated areas for digital books, free wireless internet and new coffee shops.

The deal was a “surprise” move for the retailer, considering its general manager, James Daunt, recently had harsh words for Amazon, calling it “ruthless,” a “devil” and an “enemy.” The companies did not disclose the terms of the deal (Waterstones deal with Amazon puts Kindle and ebooks instore):

Waterstones has announced a surprise tie-up with Amazon that will enable shoppers to pluck ebooks as well as physical books from its shelves.

The companies did not reveal the terms of the deal, but Waterstones said it was planning a digital revolution in its stores, with Kindle ereaders on sale for the first time and free wifi, so customers can choose between buying a physical book or downloading it then and there. It is also opening instore cafes as part of a major upgrade of the 30-year old chain.

But just this weekend, Daunt signaled a softening toward Amazon in an interview with the Guardian, just days before the Amazon deal came to light, greasing the skids for the move (Waterstones boss poised to join the e-reader battle):

Daunt, approaching 50, has described Amazon as “a ruthless money-making devil”. In private, he’s less incendiary than steely, a rather clinical Cambridge-educated history graduate who had several years as a banker at JP Morgan before launching his eponymous London bookstore in 1990.

Last year, when Daunt took over at the bookseller, he ended its practice of selling a range of e-readers in-store, even though the move cost the chain money, he said.

Daunt agrees that, while Waterstones has begun to recover, book publishing remains in a state of flux. “If everything stayed the same, we would be on course to win our customers back,” he says. But this is the biggest IT revolution since Caxton. So what does a modern British bookseller do about Amazon, Apple et al? “When I took over last year,” Daunt replies. “Waterstones was selling a range of e-readers, very badly. I stopped that instantly – at a considerable cost to the balance sheet.” Does this mean he’s the enemy of the ebook revolution that’s sweeping down Main Street USA, and beginning to be felt here in the UK ?

Daunt hinted in the interview at his company’s next move into the digital reading space, even going so far as to say that Waterstones will be “different” and “better” than Amazon, its soon-to-be partner (the interview was published on Saturday, just days before the deal hit newsstands).

“We have to insinuate ourselves into the process, and we have to be seamless.” On closer examination, “seamless” turns out to mean persuading Waterstones customers to choose an e-reader (and ebooks) through a Waterstones-sponsored device. Daunt won’t say when this will happen – “it’s the bit we have to get right” – but it’s imminent. “We’ll be different from Amazon,” he says, with characteristic ebullience, “and we’ll be better.”

At the end of the day, readers “want Kindle,” said Daunt in an interview with The Booksellers, and so Waterstones will aim to give its customers what they want (Daunt: Waterstones customers ‘want Kindle’):

“We asked ourselves, ‘what do our customers want?’; the answer was the Kindle. Once we’d done that this was self-evidently the best deal.” Daunt said the two businesses had started talking only “relatively recently”, admitting that he had looked at other options but rejected them. “Ultimately, when we thought about it, we had to give the customers what they wanted. And the best device on the market is the Kindle.”

While Waterstones will not be able to compete on pricing for the Amazon devices it will sell, it will attempt to compete on service, offering tutorials on the e-reader and an easy in-store-browse-to-digital-purchase experience (Waterstones boss James Daunt: Kindle e-books could be bundled with hardbacks):

He said Waterstones would be unable to offer cheaper prices for the piece of hardware that either Argos, Amazon, or John Lewis did. However, he added that Waterstones was the only outlet that was also a bookseller and would offer tutorials to customers about how best to use their Kindles, and to offer ebook suggestions.

The company is also exploring bundling deals where readers can buy both the e-book and hardcover version of a title at a discount.

Asked if Waterstones could offer “Kindle Bundles”, giving discounts on the ebook version of any hardback that a shopper bought, he said it was something they were looking into. “The whole focus is what can we do to give customers what they want? We have all sorts of ideas and we are talking to publishers about them.”

Regardless, Waterstones will offer branch-specific digital deals through the Kindles that log on through in-store wi-fi (Waterstones to sell Kindles with in-store offers):

Waterstones is in the process of rolling out free Wi-Fi access across its chain, and it plans to start selling Kindles in the autumn. Customers who have bought their Kindles from the retailer will be able to use them to log on to each store’s network and see deals associated with that branch.

The Guardian’s books blog pointed out that the deal could be a dangerous one for Waterstones and suggested that Amazon CEO Jeff Bezos really wanted to get “his teeth into” the chain (Waterstones kindle a deal for destruction with Amazon):

Daunt said it was a “truly exciting prospect” to welcome a ravening tiger into his living room. Er no. Sorry, what he’s really excited about is harnessing “the respective strengths of Waterstones and Amazon to provide a dramatically better digital reading experience for our customers.” Meanwhile Jeff Bezos said that Waterstones was his favourite bookseller, and that he was looking forward to getting his teeth into the only remaining rival on the high street – I mean bringing together “digital reading and the physical bookstore”.

Perhaps Barnes & Noble, Amazon’s largest U.S. rival, was more a target in the deal (UK’s Waterstones will sell Amazon Kindle (sorry, Nook)):

The announcement — with Daunt referring to Kindles as “the best digital readers” — appears to rule out the possibility of Waterstones signing a deal with Barnes & Noble. That partnership has been rumored since last year, and Barnes & Noble is working with UK app developers, but the London Book Fair in April came and went with no news.

Sources: BBC, The Independent, Guardian, Guardian (Daunt interview), The Bookseller, The Telegraph, ZDnet, Guardian Books Blog, paidContent


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