Build A Better Mousetrap
Leonard Riggio doesn't simply compel you to buy books; he
makes you fall in love with them. At any of 449 Barnes & Noble
superstores nationwide, you'll find customers curled up in
comfy chairs, sipping cappuccino, or gathered round for poetry
readings. Parents and toddlers are poring over picture books here,
and over there is a college student engrossed in her studies.
This is not retailing as usual. "What we've tried to do
is develop the bookstore so it's more like a community center
than an ordinary retail establishment," says Barnes &
Noble chairman and CEO Riggio, 56, who might be the world's
most accommodating host in addition to being one of its more
innovative retailers. Riggio doesn't view lingering, lounging
customers as a drain on his profits. They're the very reason
his stores are profitable.
Content Continues Below
Any bookstore can bring in folks who are looking for books.
Barnes & Noble brings in people who are looking for
entertainment, or peace and quiet, or--dare we say
it?--intellectual stimulation. It just so happens that whiling away
a few hours of quality time in the world of ideas also inspires
people to spend money. The proof is in the sales. Revenues at
Barnes & Noble stores totaled almost $2 billion for fiscal
1996, up from just $921 million for fiscal 1991.
The New York City-based Barnes & Noble chain is part of a
larger, $2.45 billion operation that Riggio has grown virtually
from scratch--one that includes 566 B. Dalton Bookseller, Doubleday
Book Shops and Scribner's Bookstores; a million-customer mail
order operation; and online commerce via America Online and the
Internet.
If Riggio's domain seems massive and diverse, it is. And
it's all the more impressive when you consider how it all
began. "I was an engineering student at New York
University," says Riggio, "and to help pay expenses, I
got a job at the NYU bookstore." That job sparked an interest
and led Riggio to open his own bookstore on the NYU campus in 1965
with $5,000 in savings. He owned nine college-based stores by 1971,
when the opportunity arose to purchase New York's venerable
Barnes & Noble bookstore.
The Barnes & Noble of 1971 didn't much resemble the
company's current format. Founded in 1873, "it had been
bought by a conglomerate and was a shell of its former self,"
Riggio says.
So Riggio reshaped it. Realizing that vast selection was one of
Barnes & Noble's biggest selling points, he set about
collecting the most comprehensive inventory possible. "We put
that together with a fanatical commitment to customer service and
increased the volume at the store eightfold in five years. [In the
process,] we brought an energy and enthusiasm to the [book]
business that didn't exist before."
New Barnes & Noble locations followed--first in New York
City, then in other cities, and finally into the suburbs. Wherever
it goes, the Barnes & Noble formula is tough to beat. The
encyclopedic inventory, together with discount pricing, a welcoming
environment, cultural and educational events, and conscientious,
sentient customer service delivers a knockout punch. In some
communities, book sales have risen as much as 80 percent after
Barnes & Noble moved in.
All because Riggio had the vision and chutzpah to take a
perfectly functional industry and improve it--far beyond any
expectations. What can the average entrepreneur learn from such a
wild success story?
"Don't look at the megastores of the world vicariously
and say `I could never do that,' " Riggio advises.
"An intelligent human being willing to commit himself to a
goal can achieve almost anything."