Already under fire for its incoherent policy on tablets and e-readers and its continuing missteps versus Amazon, Barnes & Noble has just been formally criticized by the UK’s Advertising Standards Authority over its recent promotion of discounts on the Nook e-reader to £29.00 ($45.23), for failing to ensure “sufficient availability of the product at the advertised price.”
The silver lining, if any, for B&N is that at least the unanticipated response shows how high the demand for e-readers can be—at the right price point.
The original—shown here courtesy of The Guardian—ran in the last week of April 2013 in the UK press, stating:
“Only £29 RRP £79 For a limited period. Fact not fiction .. Get your NOOK today at Argos, Asda, Blackwell’s, Currys and PC World, Foyles, John Lewis, Sainsbury’s and Very.”
Response to the promotion, as the ASA document verifies, was very much greater than anticipated. B&N’s “forecasting anticipated that sales would increase between 10 and 20 times the previous sales levels, and that on the day before the promotion started they and their UK retail partners had total stock of over 20 times the previous three months’ average sales. However, sales of the product during the promotion were much greater than expected at over 120 times the normal sales rate.” By early May, B&N had withdrawn the ad, but only after angering customers across the UK who had tried but failed to obtain Nooks at the discounted price.
The ASA found in favor of the complaining would-be customers, declaring that:
“The CAP Code stated that promoters must be able to demonstrate that they had made a reasonable estimate of the likely response and that they were capable of meeting it. Barnes & Noble had based their estimate on recent data for UK sales of e-readers. However, we considered that they should have based their estimate on the response rate to a previous similar offer of the same or a similar product.”
However, the penalty was hardly severe: The ASA declared that the ad should not run again in its current form, and that B&N should ensure that its future demand forecasts were more accurate.
Ironically, this news comes just as TeleRead’s Juli Monroe and others have concluded that B&N’s UK sales strategy seems to be working. And the results of the Nook promotion fiasco do suggest that there are levels of demand for e-readers out there unanticipated by everyone—not least B&N themselves.
