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Room to improve for new Waterstone's owner

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Thu, 25/08/2011 - 17:34
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Earlier this summer A&NN Capital Fund Management bought Waterstone's, the bookseller, from HMV. So this week we’ve looked at some of the detailed BrandIndex scores to see what opportunities and threats the brand faces.

Arguably Waterstone's biggest challenge over the past few years has been the emergence of Amazon as an online retailer whose lack of high street presence has enabled it to offer a value proposition that Waterstones struggles to compete with.

This is reflected in the BrandIndex scores of Waterstone's with Quality at +48, Satisfaction at +37 but Value as low as +19. Amazon scores +58 on both Quality and Value, meaning that Waterstone's trails on both those measures, but on Quality there is just a 10 point gap, compared to a massive 39 point gap on Value.

Unsurprisingly this effect is exacerbated among younger customers, with a Value score of +16 amongst 18-34 yr olds and 35-49 yr olds that rises to +25 for those aged 50 and over. Indeed for much of the period looked at in the chart, that difference in opinion between age groups was even more marked.

So although it is not scoring as highly as Amazon, Waterstone's does generally perform well on most of the BrandIndex perception measures (scoring between +37 and +48 for all other measures) but it falls much further behind on Value. And that gap is particularly acute among younger age groups.

The challenge for the new owners will be to build on the positive perceptions to ensure that it maintains its relevance in a market that is increasingly dominated by online retailers.

Quality, Value and Satisfaction scores for Waterstone's
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Value scores for Waterstone's
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