by August Wainwright on May 15, 2013
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).
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…
Walk into any Barnes and Noble store in the US (probably the world) and this is what you will see:
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.
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.