Waterstones' 'local' look may endanger brand's hard-won turnaround
A view from Peter Zillig

Waterstones' 'local' look may endanger brand's hard-won turnaround

Cheil London's chief executive says Waterstones may want to involve more fact and less fiction in its branding approach.

The people behind the turnaround of Waterstones have performed a minor miracle. Last month the bookseller reported a £9.8m pretax profit for the year to 30 April 2016, after a £4.5m loss the previous year.

This is quite an achievement considering the threat posed by ebooks and online retail giants such as Amazon to bricks and mortar bookstores, not to mention the fact Waterstones was facing bankruptcy six years ago.

Sadly, the bookseller’s latest move to roll out small, unbranded stores with the look and feel of quaint independent bookshops is considerably less inspiring

The company has both profited from and helped boost the public’s renewed love for physical books in no small part by transforming its in-store experience. Under chief executive James Daunt, the bookshops have gone from bland and unappealing to local community hang-outs (with cafés and in-store events) run by staff empowered to choose what they stock.

This success story should prove inspirational for any marketer tasked with invigorating a tired brand.

Sadly, the bookseller’s latest move to roll out small, unbranded stores with the look and feel of quaint independent bookshops is considerably less inspiring.

The stores, in Rye, Southwold and Harpenden, have come under fire for deceiving people into thinking there are locally run. Waterstones says the aim is to integrate with other independents on the high street. But, at a time when small retailers’ very survival is under threat from business rate hikes, this defence is unlikely to wash with local business owners.

Some locals contend that if they’d known the stores were owned by Waterstones they would have opposed them; although there have also been reports suggesting that consumers have wisened up to this type of wolf-in-sheep’s-clothing scenario, with local press having stated last year that the new bookstores were in fact owned by Waterstones. 

Waterstones should have been much more upfront about the fact that it was launching a network of smaller stores

Regardless of how many of the locals are up-to-speed, and how many are not, it’s not the first time a big corporate brand has attempted to pass itself off as something it most definitely is not.

Hipster coffee shop Harris & Hoole got a lot of flak for not being more forthcoming about the identity of its decidedly un-hip owner Tesco. Teapigs, the seemingly small indie brand which is, in fact, a subsidiary of Tetley and owned by multinational conglomerate Tata, has also been accused of subterfuge.

Clearly, Waterstones should have been much more upfront about the fact that it was launching a network of smaller stores. Perhaps then it could have sold it as a pioneering new model allowing a big chain to blend with the look and feel of a smaller town instead of imposing its identity on it. Alternatively, it could have created a sub-brand for smaller stores under a banner such as 'Waterstones Local’.

As it stands, the company’s ethics are being called into question and a local decision to boycott the stores wouldn’t surprise me.

We hear so much about how important authenticity and transparency is when it comes to digital and social channels, but it is even more vital in physical channels. Customers and local communities expect and deserve better. To avoid tainting its hard-won success, Waterstones may want to involve more fact and less fiction in its branding approach from now on.

Peter Zillig is chief executive at Cheil London