Decentralisation within a book retailer
A Waterstones case study

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Page 3: The supply chain

The book trade has a complex supply chain. At one end of the supply chain is the author with a manuscript, while at the other end is the customer purchasing the book. The industry supply chain is an intricate network of interconnected parties which form the process by which a finished product reaches its intended market.

Books are a highly creative commodity for which there are countless authors, publishers and distributors. Decentralisation for Waterstone’s is a response to the unique nature of the product and the diverse nature of the market. As a result, it is possible for customers to find an international best-seller sharing the same shelf as a local work written and published by an author in a front room.

Logistics

Physical distribution or marketing logistics involves planning, implementing and controlling the physical flow of goods and related information from points of origin to points of sale in order to meet customer requirements. Waterstone’s holds an 18 per cent market share of the book retail market and between 12-14 per cent of the industry total. At present Waterstone’s has 30,000 suppliers all working to slightly different contracts. Managing the supply chain means working with different delivery times, trade terms and discount opportunities for each supplier. The level of individual specialism makes uniformity virtually impossible.

Centralisation would mean working with fewer product lines and this would not serve localised customer needs. For example, the aim is for each Waterstone’s branch to make between 50,000 and 150,000 titles available to its customers. The mix and variety of books on offer will depend upon the size of branch and customer needs and requirements within each catchment area.

Waterstones | Decentralisation within a book retailer
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