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Can Barnes and Noble Be Saved?

26 February 2013

From Megan McArdle at The Daily Beast:

Leonard Riggio, the founder of Barnes and Noble, wants to buy his company back.  Or at least the retail parts.  Matt Yglesias notes that this seems to suggest that the Nook is doomed; it may be a good product, but it can’t compete in a space crowded by Amazon, Google, and Apple.  I think he’s right.

But I’m not sure the retail stores are a much better business.  When I looked at the Big Box market last fall, I emerged deeply skeptical that anything can be done to save that particular business model.  Not with the floor space that these stores have.  Stores like Best Buy and Barnes and Noble used to be the leaders in both price and selection (which is why they put so many smaller stores out of business.)  Now that leader is Amazon.   And I don’t see any way for either company to get that title back.

. . . .

If I were Mr. Riggio, I’d go back and try to reconceptualize the bookstore from scratch, starting small and expanding as needed, rather than trying to salvage the brilliant idea of three decades ago.

Link to the rest at The Daily Beast

Bookstores, Nook

16 Comments to “Can Barnes and Noble Be Saved?”

  1. Well, I like B&N, so I’m abit sad about this, but I don’t think it can be saved.

    It has nothing to do with business strategy. It just sells a technology (print) that is being replaced.

    I think B&N is right to focus on its digitial store, but I don’t know if that will save it with Amazon as a competitior.

    But going back to retail – I can’t see that working, unless they change what they sell. Could be wrong though.

  2. Is “print” really being replaced.

    DB

    • No, print isn’t being replaced. You can still buy buggies and buggy whips too. They’re expensive, though, at least the buggies are.

      JEH

  3. I wrote my first three published (and a dozen unpublished) stories at the B&N a few blocks from the university. Its ‘cafe’ invited student study groups and writers with 9-10 largish square tables and a deep counter that stretched across the front window; the store always had more traffic than the Waldenbooks and Books-A-Million (both within a mile) combined. Waldenbooks is gone, of course, but the BAM, which has not changed its marketing strategy or appearance beyond updating fixtures, is doing more business than ever. The B&N, which moved to a larger building, has a ‘cafe’ with little round metal tables, perhaps half as many bookshelves as the smaller store had, and at least a third of its floor space devoted to a pavilion celebrating the Nook. I drop in rarely, usually in search of a specific volume they don’t have but will be happy to order for me, and have never stood in line with a purchase. (Okay, on December 24 there was a 10 minute wait.) The place is empty.
    If Mr. Riggio can jettison the Nook and get the individual stores back to the neighborhood student/writer/reader friendly communities they once were (or at least the one in Wilmington once was), a less obese B&N might be stable and sustainable.

    • And that is the difference between someone with retail experience, & an MBA who’s a whiz with a spreadsheet.

      The MBA will decide that games, knicknacks, & other items are far more profitable per square foot than books, & decide to reduce the number of books sold in each store so more of this junk is on display. People come to B&N looking for books, find most of the floor space is devoted to this junk, & leave without buying anything.

      The retailer knows most of the battle is to get potential customers into the store. They’ll do the outreach, build up the traffic, & get them to buy books. (The other stuff is gravy that helps the bottom line, but isn’t the meat & potatoes of the business.)

      I figure Riggio’s primary challenge isn’t changing the corporate-wide emphasis back to physical books; it’s finding enough people staffing & managing the stores who share his vision. I wouldn’t be surprised if most of those left are simply waiting until their store is closed.

      • The retailer knows most of the battle is to get potential customers into the store.

        By Jove, you’ve got it. That’s exactly what’s wrong with B&N’s current business plan for its retail stores, and I have never seen it put more shortly or clearly. I have a feeling I’ll be quoting you all over the place (in conversation, mostly) in the near future.

        • I worked in retail a few times. I may not be very good at it as a career — let alone know how to run a bookstore — but that is the one thing I learned.

        • The most damning part of their January report on their holiday sales was, in fact, reduced traffic at the stores.

          That is what is most worrisome: the minor lift they got from the Borders implosion has worn off and at a time indie bookstores reported a decent revenue increase, they saw a decline. Which, in the peak season of a seasonal business, is scary.

          Almost as scary as the new promotion on the Nook HS+ tablet offering $50 gift cards on tablets bought in-store and at B&N.com. (But not the other retail outlets. I’m sure Office Mac, etc are going to be thrilled.) The three-month old tablet that was already $50 cheaper than anything in its class (and selling around cost) is now effectively $100 cheaper. Smacks of desperation, no?

  4. B&N is in trouble, not so much because of the Nook, or their physical stores. Their big problem is their web operation, IMO. Yes the Nook is not selling well, and their stores are over-sized, but if B&N were to compete well against Amazon on the Web, they would be doing much better.

    Over and over I read of people complaining of how poor the quality of B&N online is. I read these same people say they get frustrated with B&N’s web site and switch to Amazon. Amazon does it right and makes it easy for it’s customers to find and buy what they want. Amazon puts the customer first almost always. B&N needs to do the same, or even better than Amazon if they want to not just survive, but flourish.

  5. B&N isn’t willing to compete in digital. They just don’t want to be there. They seem to want to sell paper books, but their strategy is to sell books by selling not-books.

    If you want to be the premier physical bookstore, you have to sell paper books better than anyone else. Yeah, it’s true that people seem to prefer browsing shelves of paper (even if they buy from Amazon). If you keep your prices competitive, Amazon will still have to charge for shipping and you can either offer a lower price or pocket the difference. Is that just not enough profit to keep the store heated/cooled and staffed and lit? Then you’re doomed.

    • If you keep your prices competitive, Amazon will still have to charge for shipping and you can either offer a lower price or pocket the difference.

      Yeah, but Amazon doesn’t have to pay retail rents and doesn’t have to maintain storefronts in high-traffic locations. B&N does. That makes it all but impossible for B&N to have competitive prices, except on a small number of titles offered as loss-leaders.

      • Though B&N can offer instant gratification — and does offer the discount card. Combined, that’s not a bad deal. And if you’re in an area where UPS/FedEx is sloppy, having a book delivered, shipping-free, to a local bookstore isn’t a bad deal.

        B&N could still be a contender, I think. The local one is pretty book-full and seems to have been getting slightly better, even, in how they display new books. The staff has always been helpful, or at least polite (e.g., in Xmas rush when they have no time), and while the cafe could be more comfy, it’s not bad for a $tarbuck$.

        But I think B&N would have to find the best aspects of being an indie bookstore — pulse of the community, ordering what sells; knowledgeable & friendly staff, with a willingness to recommend — with the best aspects of being a chain: bulk rate discounts and fast delivery from other stores (like interlibrary loans). (And/or they might just franchise the things?)

        On the Nook side, they’d need to hire programmers who viewed, “Customer/Author says that X isn’t working” as “OH HO! A BUG TO SQUASH! CHARGE! WE SHALL RESCUE YOU FROM THE BUG, FAIR DAMSEL/GENTLEMAN/OTHER.” And online customer support who go, “Huh, it shouldn’t be doing that and I can’t fix it. Let me file a bug report. Thanks for noticing!”

        • On the Nook side, they’d need to hire programmers who viewed, “Customer/Author says that X isn’t working” as “OH HO! A BUG TO SQUASH! CHARGE! WE SHALL RESCUE YOU FROM THE BUG, FAIR DAMSEL/GENTLEMAN/OTHER.”

          Having worked on the support side of computers for many years, I can assure you that’s not the problem. I suspect the Nook hardware/software development team consists of 2 or 3 people (the programmers & project managers — they probably lack the necessary support staff) who spend a large amount of their time lobbying the suits for more people with critical skills & experience so they aren’t forced to finding excuses to close all except the most serious & critical bug reports instead of fixing them.

  6. Competitive pricing doesn’t have to mean price matching, just being in the same ballpark.

    • Bingo. There’s a real benefit to being able to buy something now, rather than wait for several days and possibly have to drive to the UPS office during the two hours a day it’s actually open in order to collect a parcel if they didn’t deliver it.

      B&N doesn’t have to be cheaper than Amazon, so long as they can be more convenient and not much more expensive.

  7. While a lot of us will condemn B&N for failing to innovate in a timely manner and some will even express indifference to wether they last or not; no one (that I know of) had book burning parties when Borders closed and I doubt anyone will do the same for B&N if and when they go under.

    There are now millions of e-reader converts, myself included, but I have yet to see a post or comment anywhere from anyone that “hates” books and bookstores. The Nook can’t and won’t fully compete with the Kindle family, but it’s still a geat device that owners love and still use to shop on B&N. E-books have taken the majority of genre fiction sales but are still a minority to print in dozens of other book sales categories.

    In short, there’s still some pie on the table for B&N.

    But their website sucks and people have less reason to visit stores. I still buy paper books, and even the occasional hardback, but King’s latest isn’t a flat screen TV. I don’t need to go to a store to “check it out” before buying it cheaper online. I know what I’m getting and I just buy it.

    A revitalized and sucessfull B&N, even if it lives in the Amazon shadow, is still good for readers and writers and I’d love to see what Riggio has up his sleeve.

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