The Possible Resurgence of Barnes & Noble

by August Wainwright on May 15, 2013

The Possible Resurgence of Barnes & Noble by August Wainwright

With continuous rumors circulating that it’s only a matter of time before Barnes & Noble is sold off to Microsoft (one day the sale is imminent, the next it’s purely speculation) AND the possible sale of the B&N website, as well as stores, to founder and current Chairman Leonard Riggio AND news of physical stores closing all across the county AND NOOK shares (as well as stock prices) trending down, it seems an appropriate time to take a moment and ask the question:

What the hell is wrong with B&N?

To start, here’s a short list:

– the experience at their physical stores is lacking, uncomfortable and uninviting

– there’s no integration of the NOOK into the physical store properties

– the NOOK fails to offer a Unique  Selling Proposition (USP), doesn’t know what it is, and doesn’t offer readers anything they can’t get elsewhere

– searching for books on the B&N website is atrocious and antiquated

and on, and on, and on

BUT, even after all of these problems, there seems to be some good news. In a recent article at goodereader.com, it’s noted that NOOK’s are essentially sold out in the UK.

You read that right. Despite failing at almost every aspect of their business, readers in the UK are scooping up NOOK’s so fast that B&N can’t keep certain models stocked enough to meet demand.

What is causing this? And can B&N take advantage, learn a few things, regroup, and reposition themselves in the market for a (global) resurgence?

The answer to what’s causing the run on NOOK devices is based entirely on pricing. In an attempt to gain market share, and more than likely offload a surplus of NOOK devices that weren’t sold over the holidays, B&N slashed the prices of NOOKs leading to “the first time in the entire history of B&N in which they’ve seen such elevated levels of demand“.

Unfortunately, the latter question is a little more difficult to answer. Based upon the history and track record of B&N, though, I would be very surprised if this changes anything for them.

But, lets say we give them the benefit of the doubt. Lets forget B&N’s spotty history and label this the wake up call they’ve been waiting for – the trigger point of the resurgence. What do they do next to harness the new found demand in the UK?

To best answer this, we’ll need to split B&N into it’s two properties: NOOK (digital) and B&N Stores (physical).

NOOK Media

What B&N should take from the recent surge in sales of discounted NOOKs is that their devices aren’t bad. As a matter of fact, very few people criticize NOOK devices for being bad ereaders. They aren’t. But not being bad isn’t the same thing as being good, and unfortunately for B&N, they’ve just never been able to figure out what a NOOK is supposed to be good at.

The main reason for this seems obvious and can be summed up in one word: Kindle. From the very beginning, B&N has tried to position itself as a direct competitor to Amazon’s Kindle. But a closer look shows that strategy was ill advised from the very beginning.

“Kindle” is unique in that it’s both hardware AND software. You can purchase a Kindle, or you can download free Kindle software to read your Amazon purchases on iPads, iPhones, PC’s, Macs… whatever you want. This allows for readers to utilize “Kindle” on a absolutely massive amount of devices. (I won’t get into the fact that Amazon.com is leaps and bounds above B&N.com in user experience.)

The NOOK is a single device with limited functionality.

Recently, NOOK Media teamed up with Google in an attempt to revive the devices. This was an excellent move and one they should have done from the outset. The partnership with Google will bring the Google Play app store to NOOK, increasing the number of available apps from roughly 10,000 to over 700,000. It will also bring Gmail, Chrome (a much, much better browser), and the ability to download music FOR THE FIRST TIME (seriously?) to the NOOK.

All of these things will help the NOOK.

But right now, the NOOK remains a device that can’t match its would-be-competitors in features, and doesn’t offer an alternative experience to its customers.

And this brings us to the first thing B&N needs to realize about its digital device:

1. For NOOK to make up ground in the digital book marketplace, it has to be cheaper. Quite frankly, it should be the cheapest of the main ereader devices.

Last year, I thought it would only be a matter of time until Amazon had created a Kindle device that was so cheap that it became ubiquitous. I thought we would see a $49 or $39 eInk device that made it ridiculous for everyone NOT to own an ereader. At that price point, if you lost a device or it broke, you would just go and buy another. No big deal. If you’d purchased hundreds of dollars worth of digital books, then the cheap ereader became nothing more than the TV remote – necessary but forgotten.

But, up until now, it hasn’t happened. And I’m not saying that a NOOK should be that cheap, but the premise is the same.

Recently, Jeff Bezos admitted that Amazon doesn’t make a profit from the sale of their physical devices – it’s the sale of content on those devices where they more than make up for it.

Seeing as how B&N is already losing money, it shouldn’t be too risky of a move to lower prices of NOOKs across the board, for every device, and in every country. Flooding the market with NOOKs should be the first step in B&N’s resurgence campaign and the only way to accomplish this is with lower priced readers. Frame it as the “Biggest E-Reader SALE in History”, whatever, just get NOOKs into peoples hands.

After creating a much larger user base, the next step is for B&N to:

2. Integrate the NOOK into various physical spaces, including their own stores, independent bookstores, and libraries.

Before we can really dive into that discussion, however, we need to take a detour and look at the other side of B&N…

Physical Stores

Walk into any Barnes and Noble store in the US (probably the world) and this is what you will see:

The Possible Resurgence of Barnes & Noble 2 by August Wainwright

Why? Because Barnes & Noble hates you… and wants you to have hemorrhoid problems. Seriously. Google it – it’s a widely known conspiracy.

I’m going to let you in on a little secret… here we go:

I love going to Barnes & Noble.

I do; I can’t help it. I love being surrounded by books. I love walking down the rows of books and looking at covers and reading blurbs. I could spend hours just hanging out at my local B&N.

But, the thing is, despite the fact that I love being there, the experience at B&N stores is awful.

In my recent article “James Patterson Wants Bailout Money. Wait, What?“, I wrote:

If Barnes and Noble realized that what people want is a place to experience books, they would be doing just fine.

Listen, Starbucks coffee stinks. Go to any Starbucks and it’s packed with people, sipping that burnt crap. I don’t go to Starbucks because of the coffee, I go because of the experience of the coffee shop. Sometimes I take comfort in looking over at the hipster next to me who swears he’s the next Annie Leibovitz. On rare occasions, I’ll even travel outside of my comfy little bubble and spark up a conversation with another human being. Crazy right?

If B&N understood that the reason most people go to their stores is to experience the joy of being surrounded by books, then we wouldn’t be having this conversation, or at least, they wouldn’t be included.

Hey B&N, make your stores comfortable to read. Create a club where customers pay a yearly membership fee and if they own a Nook, they can borrow any book they want while they’re in the store – when they leave, it disappears from the device. Do something, shit, do anything. Make me want to come to your store.

The experience at a B&N store isn’t conducive to creating a tribe of customers. People continue to come because books are awesome, not because B&N is awesome.

Setting all this aside, the reason I brought it up was to get back to the topic of integrating the NOOK into physical spaces.

In that Patterson article, readers brought it to my attention that B&N allows you to read books on your NOOK for one hour while you’re in the store.

What’s interesting about this is that my wife has owned a NOOK for over a year and neither of us had any idea this was a thing. I don’t know if they’re still doing it, but either way, why the hell is this not plastered all over the stores? Most likely, the answer goes back to B&N believing that if you’re reading a free copy of something on your NOOK, you’re also cannibalizing sales of physical books.

This is asinine.

Not only should they be advertising this feature, but NOOK owners should be able to read any book, for however long they like, as long as they’re in the store. Somebody has to be smart enough to figure out a way to allow NOOK readers to “borrow” any book, and then have that book disappear form the device when the customer walks out of the store. Hire some genius college kid – he/she will knock that out for you over a weekend before accepting a job with Google.

Is it me, or does B&N seem to demonize their own ereader in their physical locations? Does that make any sense at all?

Instead, B&N stores should be filled with people walking around with NOOKs. And once that integration is in place, B&N (or more appropriately, NOOK Media) should attempt to replicate this same interactive approach to both independent booksellers and libraries.

Empower smaller booksellers and libraries and become a giant in the industry again.

B&N should treat third-party booksellers like affiliates, where each has the ability to sell NOOK devices (while making commissions) to their customers. They should allow those sellers to point their tribes and customers to the B&N site, where they can purchase ebooks, through an affiliate link provided to the store (again making commissions).

B&N should partner with libraries to mimic the same NOOK integration from their stores into libraries, where another group of people should be found walking around with NOOK devices. They should partner with libraries and come up with a system that allows users to borrow a finite number of books on their NOOK, and then funnels them to the B&N site for purchasing additional books.

Unfortunately, for any of these changes to work and take-off, B&N has to change one more thing:

3. For the love of all that is good in the world, make B&N.com useable, because, right now, it’s awful.

Your site is slow, it’s difficult to search and find new books, the recommendations are based more on what will make you money (meaning, which publishers paid the most for you to serve that ad to me) and not on what I will ACTUALLY BUY, PubIt! (or whatever it’s called today) commits more errors than the New York Mets… shall I go on?

If Barnes & Noble spent a tenth of the time it spends trying to get me to buy the newest Patterson… or King… or Grisham novel on figuring out what their customers want, they probably wouldn’t be in this position.

Before libraries and third-party booksellers will get on-board with you as a tech company, your tech has to not be atrocious.

But, again, it’s not likely any of these things will happen because B&N sees small booksellers and libraries as competitors, where partnering will only cannibalize sales of physical books in their stores.

Conclusion

Barnes & Noble has an opportunity to change and evolve. Will they? Based on their history, it’s unlikely.

But with the recent sales surge of discounted NOOK devices and the partnership with Google that adds to the user experience on the NOOK, they are at least doing something, which is a really good place to start.

Most people say B&N needs to be two separate companies, one for NOOK and one for the physical stores. This, more than likely, will happen. Selling physical books in a physical store is a retail business; selling ebooks on a digital device is a tech business. Right now, B&N isn’t doing either well.

Personally, I still think the best course B&N could take is to fully integrate a more cost efficient NOOK into the fabric and experience of their physical stores. They shouldn’t be trying to compete directly with Amazon – they’ve proven they can’t – but, instead, they should be focusing on creating their own unique business that delivers on what they could be offering.

I’m sure there’s much more that could be discussed on this topic so let me know what you think. Give me your opinions on the NOOK as a device and the overall B&N experience. Hate it? Love it? What could they be doing better? Leave a comment below.

Join the August Wainwright Community

Signing up will give you access to exclusive content and keep you informed of any new posts on the site, plus release dates and special promos on my books. We only email important updates and never spam.

5 comments

Hallelujah, sing it, brother!

My mom is an avid reader but hates B&N because they don’t have decent chairs to sit in while she’s taking a look at a stack of books. She has a serious back pain problem, and those few prairie-style dining room chairs hurt her back.

When you’ve driven my mom out of your bookstore, you’re in a world of hurt.

B&N is being run worse than when Ron Johnson ran JC Penney’s, and with the same, predictable, sad results. At least JCP’s board finally grew a pair and fired Johnson.

TK

by TK Kenyon on May 16, 2013 at 5:39 am. Reply #

Excellent article. I especially like your analysis of B&N’s physical space and the opportunity they have – if they’d only take advantage. The closest B&N bookstore to me has two plugs at the back of the cafe space – in the store, not in the adjoining Starbucks. Contrast that with the busyness of a new standalone Starbucks that has plugs in the tables and chairs that are really comfortable.

When I asked the manager if I could feature some free creative writing classes I run in conjunction with our local library on their community bulletin board, she said it was for B&N events only. So usually there is one lone flyer featuring a book signing coming up.

Your idea to create a club where you could read any book in the store while you were in the store is stellar! Research shows that freebies increase sales! Get me sitting with some coffee in a comfy chair and let me browse and read and I guarantee I’ll buy at least one book before I leave. Alas, it may only be the stuff of dreams.

by Deb McLeod on May 17, 2013 at 6:43 am. Reply #

At this point, unfortunately, “the stuff of dreams” is all we’re discussing.

The physical stores will be sold off to one company (maybe the founder) who should downsize, reduce overhead, and move forward.

NOOK Media will be sold off to another separate company, but will still be occupying the same space in the marketplace, so nothing much will change.

I’m looking for KOBO to be the one to step up, especially in the US. Their future looks bright – they just have a lot of ground to make up to be truly competitive.

by August Wainwright on May 17, 2013 at 7:54 am. Reply #

I now got Nook HD, due to my nook tablet mother board went out, so they upgrade me to HD. That what they want me to think, but what I paid for my tablet is the same price of HD.
I am avid reader, read books on Nook & galaxy phone (kindle app). Since, BN upgrade readers to Chrome, now all Nook readers is Kindle in manner of speaking. You can d/l Kindle app on the Nook HD. I did, got more kindle books, than Nook books. I do good many reviews, they sent me majority of the books in mobi format. BN do need to separate just Nook online, give authors & publishers deals like amazon kindle does. That why Kindle book sales are higher than Amazon, at the moment. So, all nook readers go get the app you will have a better selection of books to read.

by T.H. on May 23, 2013 at 7:24 pm. Reply #

As a UK resident I have never heard of Barnes and Noble as we don’t ( not to my knowledge) have any of their stores in the UK so I cant comment on that experience.
What I can comment on is the NOOK. I have never been a great reader of books, but when the NOOK became available at such a reasonable price in the UK I decided like many others I suspect to give it a go. I bought the Simple Touch with glow light. I bought it because it supports the e-pub standard and there are thousands of free books to read which I have never read. I am delighted with the device , so much I have bought my sister one. The device is a good device and when its so cheap its a no brainer which device you buy.
I have also been looking at the NOOK HD+ and compared with other tablets with the price cut in the UK it really stands out as the one to buy. Reviewers seem to compare it with the competition , but that competition e.g. ipad is much more exspensive, but the NOOK has a fantastic screen as good if not better than any of them. If I am using a tablet the main thing I am looking for is a clear bright high resolution screen so I can read books play games and watch videos. From what I have seen trying one instore the NOOK scores very highly on all three counts and seems well built. While trying out the NOOK HD+ in different stores several customers commented that they had one and they were over the moon with it. It is a good product and at the new price an excellent choice. I think Barnes and Noble have hit on the right model in the UK , sell their devices cheaply to undercut the competition. They are good devices. They should do the same in other European markets as they have done in the UK.

by Dafydd on June 24, 2013 at 1:58 am. Reply #

Leave your comment

Required.

Required. Not published.

If you have one.



%d bloggers like this: