Whether it will ever be great again or not, Barnes & Noble seems to be trying to survive by imitating Amazon. An article on Time explains that B&N is adding more shopping categories to its bn.com website, including Home and Gift, Consumer Electronics, Arts and Crafts, Toys and Games, and Baby. The items in these new categories will mostly be provided by third-party vendors, with B&N taking a sales commission on each item it sells.

This seems to be an example of playing to one’s strengths—thanks to Nook e-book sales, the bn.com website seems to be one of few bright spots in Barnes & Noble’s portfolios. Sales at its brick and mortar stores have been declining over the last few years.

Time points out the irony that, at the time chain stores like Barnes & Noble and Borders were founded, they were expected to drive smaller independent stores out of business—but in an era of big box bookstores’ decline and failure, the independent stores that have survived are mostly doing well, because they know and can cater to their marketing niches.

As for Barnes & Noble’s website expansion:

[Bill Kavaler, senior analyst at Oscar Gruss & Son] says that the move is necessary. ”Just books ain’t enough,” he says. And he’s mildly optimistic it can work: “[Barnes & Noble] isn’t doing anything particularly stupid,” Kavaler says. “And that’s all you can ask.”

That’s certainly damning with faint praise if I ever heard it. Isn’t it a heck of a thing when “all you can ask” of a company is that it not do something stupid?


  1. Hard to compete against Amazon’s warehousing processes and their customer service, the latter not being BN’s strength. But it’s smart to be doing something — probably best not to add too much too fast w/o the kind of cust svc backup that’s needed. Their refusal to take back e-books that have bad layouts or which are missing pages is indication of their basic attitudes.

    Very rigid policies like that. Amazon’s willing to do 7-day refunds on them and 30-day for other items they warehouse and ship themselves. It’s the main reason so many order from them.

    – A, a NookColor owner and paying BN member

  2. Amazon’s prices for the new ereaders and the Fire will force B&N the lower the prices of their current devices, and of the new ones that hopefully will be released soon. They need another source of income to compensate for this.

  3. Essentially, they’ve started leasing out space at their website to monetize their customer list. Best Buy is doing this, too, to bring in extra money to help out in *their* battles with Amazon.
    Big B&M retailers (Walmart, Sears, Kmart, Target, etc) have done this for ages, which is where Amazon got the idea, last century. 😉

    Next logical step is to add a full shopping section to Nooks and Nook apps, with links to partner websites as well as their B&N.com “tenants”: it might even generate enough up-front placement revenue to allow Nook prices to inch downwards a few bucks.

    Either or both might help a bit but, realistically, this is doodling on the margins. It is unlikely to change the company’s near-term fate which is tied to their white elefant storefronts.

  4. “[Bill Kavaler, senior analyst at Oscar Gruss & Son] says that the move is necessary. ”Just books ain’t enough,” he says. And he’s mildly optimistic it can work: “[Barnes & Noble] isn’t doing anything particularly stupid,” Kavaler says. “And that’s all you can ask.””

    Actually, they are doing several things that are particularly stupid! First, they use a flavour of adobe DRM that hurts everyone on the epub DRM team. Whether you agree with DRM or not, splitting up into sub-tribes confuses your customers and weakens your position. Second, they operate in only ONE country serving only 450 million potential customers out of an estimated 7 billion potential customers. In this day and age, if you can’t expand across some lines on an atlas given the digital capabilities of communication, you deserve to go out of business.

  5. In B&N’s defense: the DRM they use is less onerous and less finicky than the basic Adept and at the time they adopted it, it was *necessary* because Adept did not allow direct wireless transfers to the device. They also licensed the ereader DRM to Adobe who eventually added it to their sdk. It is hardly B&N’s fault that other Adobe licensees chose not to support it.

    Revisionist history serves no one and B&N has enough trubles without dumping somebody else’s failings on *them*.

    As for not expanding beyond the US: to what point?
    It is pretty clear that B&N is headed for a cash crunch; the terms of the Liberty media infusion may not be as onerous as some make them out to be but the *size* of the investment barely bought them a year or so of time in the US.
    People keep thinking of B&N (and Amazon) as if they were gadget makers; they’re not. They’re content retailers. B&N has little content they can sell outside the US and the margins on Nooks are thin enough they can’t afford to sell them to people who aren’t going to be buying ebooks from *them*.

    B&N has done a good job competing against Amazon, all things considered.
    But the things that *must* be considered is they entered the market a year too late, they did so with a decent device but unfinished software a month late (which cost them an entire xmas season), then tried to start a price war against an opponent with an inherently cheaper-to-build device. They’ve done better in their second year, NC and NT were both leapfrog products at launch, but they needed to answer Amazon’s K4 wave a month ago. Waiting til november to announce, even if they ship immediately is going to cost them a month of mindshare and pre-order sales.

    They started with a leaky ship and have been bailing water since.
    It is to their credit they’ve stayed afloat this long and if they do run into trouble next year it will be chapter 11, not chapter 7, like Borders. But it is important to temper expectations here; B&N is in business to make money, not promote some annointed standard or somebody else’s for-profit DRM business.

    If B&N has made a DRM mistake, it was in trying to have it both ways: pretending to fully support adept when their business required them to rely on ereader DRM. They should have had the guts, like Apple, to say that you can’t profitably compete with Amazon (or Apple or Kobo) relying solely on Adobe.

    Don’t be surprised if, moving forward, Kobo starts emphasizing Kepubs over adept; they too are content retailers and they too need device buyers to buy ebooks from them as much as possible.

  6. ““[Barnes & Noble] isn’t doing anything particularly stupid,” Kavaler says. “And that’s all you can ask.””

    Yeah … I can see Steve Jobs having something quite devastating to say about that kind of attitude.

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