Barnes & Noble
The first Barnes & Noble retail location was built in New York City in 1917. Today, there’s approximately 700 stores nationwide. But those stores – and, more broadly, the B&N business model – is facing immense pressure from technology – from digital publishing and online distribution, and the price and convenience that 1s and 0s provide.
Sensing this threat, B&N introduced the Nook in 2009. B&N didn’t want to lose its grip on book sales to digital products (via distribution and/or content), so it invested heavily in the device. Store real estate was even repurposed to include large, in-your-face, showroom-like installations. But, despite some initial success, sales are now plummeting. People still feel very strongly about physical books and bookstores (see the comments section).
“The feeling of a print book, with its rough paper and thick spine, is an absorbing and pleasurable experience — sometimes more so than reading on a device.”
– Nick Bilton, author of Hatching Twitter
Whether physical books or digital devices, B&N’s focus has always been on buying, not reading…and I think that’s their problem. They seem themselves as a retail chain; their main “product” is Barnes & Noble Booksellers. But there’s very little they can compete with, against digital, when it comes to buying books (media).
Barnes & Noble needs to focus on creating/providing the world’s best reading experience.
For starters, what B&N needs is more data: who is visiting their stores, and what those visitors are interested in reading (or are reading, but don’t purchase, while they’re there). This is one of the greatest advantages of digital, software-based products – the ability to create lean systems that offer customized experiences for users. (Personally, instead of over-investing in hardware to create the Nook, I think B&N would’ve been better off forming a partnership with a company like Evernote, to give people a place to take notes on what they’re reading.)
B&N 2.0, as I see it is, should mean – at least – the following:
- A dramatic reduction in inventory (and, as a result, store size). Why take up 30% of total floor space with a section that only 5% of customers are interested in? Learn user preferences to avoid excess inventory. (Amazon’s purchase of Kiva Systems allow for similar efficiencies.)
- Subscription model. Port the online model offline. If there’s any ecosystem where this would work, it’s likely physical books. Payment of a yearly subscription fee (say $25) would allow you to visit a B&N and read a set number of books for a set duration (any overages result in automatic charges to your credit card on file. If you want to buy a book, walk out of the store with it – your card will be charged.)
- Kiosks. Think a RedBox in the middle of the store. Select your book(s), rent them for a set duration, and then return them to the kiosk when you’re done. The books will (mostly) exist in a hidden backroom, stored much more compactly than having them strewn across shelves.
I think Aarron Dignan, CEO of Undercurrent, put it best:
“The physical world that we used to value so much – the devices, cars, real estate, and other infrastructure – are merely inventory for something bigger. The value, it seems, is in the data, the tools, and the optimization of markets.”
Don’t take all of the books out of B&N. That’s what gives the stores their charm. But reduce the number of (visible – at least) books, and increase floor space for reading, writing, tinkering and making. Use data to efficiently manage inventory and to provide more customizable user experiences. Ultimately, the focus – and the purpose of the company – needs to shift from a transactional model to a more experiential one.