Barnes and Noble: Not Losing (quickly) is Everything

Aug 19, 2009 | Tech News

photographs courtesy Philip Greenspun

Barnes and Noble, the physical book store chain, is the master of the Just-Enough competitive response.  Back in the dotcom years, when Amazon exploded into the scene and threatened to take over the book retail business, B&N put together its first online web site to stem customer defection to Amazon.  Since then, it has done a decent but unspectacular job online, certainly has not done much to steal online market share back from Amazon.  They have done an just-ok job at linking their online and brick/mortar stores, such as making the $25/year membership program good at both as well as the stores, and putting a few kiosks in the store for users to search for books on  Hardly innovative nor aggressive.  If they really want to put pressure on Amazon, they’d sharpen their discount online, do a much better job of shipping book orders to the brick+mortar stores for pickup, etc.  As it stands, B&N can offer “fast delivery” which means that they’ll get the book into UPS’s hand within 3 days of your online order.  Well, 3 business days to be exact.  This is the best they can do after a decade of competing against Amazon, who can ship the book out often within 24 hours, and with the $79 Amazon Prime program, can get the book in my hands within 2 days, from hitting submit button to my door steps, and often at a lower cost vs. B&N.

It just seem that B&N’s strategy is to do just enough so that they can maintain leadership in the the physical bookstore business, while the world gradually and surely moves towards more online book purchases.

So it’s not surprising that B&N seems to be following this same tactic when Amazon announced the Kindle.  Hardly a runaway success yet, the Kindle nonetheless poses a strategic challenge to the physical, carbon-based printed book, and by extension remove the necessity of a physical book store.  

B&N’s tepid response is to offer a me-too version of the ebook reader, by joining into a strategic partnership with Plastic Logic to sell an ebook device, oene which won’t hit the stores until 2010.  In the meantime, it’s offering software ebook readers for the iPhone, PC, and Mac, to go along with its nascent ebook store, which it was able to offered via an acquisition of Fictionwise earlier in 2009.  It’s enough to placate shareholders and offer something to go up against arch rival Amazon, but it feels like that it is again caught in reaction mode.

I wonder whether B&N just wants to milk its existing position for as long as possible, losing as few customers to Amazon as possible.  Or is it that the management needs to have a big shakeup, and put in place folks with a little bit of the vision for the future?  

The whole situation reminds me alot about the newspaper industry back a few years.  They know the end was coming, and fast.  And yet the complacency and/or the incompetency was so great, that they just did as little as possible to adjust to the rapidly changing trajectory.

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