B&N's Nook as differentiator
B&N is clinging desperately to Nook.
Not as a hedge against Amazon (a battle that has been lost, I think) or in any sort of attempt to compete with Google, Apple, or Samsung — even with the balls and ego that B&N Chairman Leonard Riggio still has (at 73) I don’t think he’s delusional.
B&N needs Nook as a way to differentiate themselves from books-at-Costco and the remaining independent booksellers, and as a bulwark or backstop against the decades-long slide in reading.
[data from The Consumer Expenditure Survey that I last futzed with back in 2011; no, I’m not going to do a new chart. Per the source, aggregate spending on reading in 2012 was $13.6 Billion, so the trend line holds]
It’s not about competing with Amazon — instead, it’s about retaining the physical book fans.
Having a digital option for their customers, even a piss-poor implementation like Nook, is magnitudes better than not having a digital option. B&N is the largest bookseller (physically, if not in absolute terms anymore) so as the leader, they need to offer something more. Appearances count more than the reality of the situation, and B&N’s target customers are the ones that won’t convert to digital. Even if no one buys the Nooks (and the sales numbers point in that direction), the Nooks are there — given prominent placement in the front of the store — and lend the impression that B&N is doing something about digital and so the I-only-buy-REAL-books-customer feels better about the chain and their physical book purchases.
Many book customers know they’re luddites, and perhaps take some pride and enjoyment from the fact, and from their bookshelves, and from the whole tactile and physical aspects of their hobby — even if, when one is lost in a book, it all fades to the background anyway. This customer may not want an e-reader device, even if they are otherwise technically savvy — but since they are technically savvy, they also appreciate a bookstore that speaks to that part of themselves as well. Yes, I’m cutting an awfully fine distinction here; let me phrase it in the form of a question: Do you buy build-it-yourself furniture from Target and Walmart, or do you drive to Ikea and get something with a fake-Swedish name? Perception of the brand has a lot to do with customer decisions, whether the customers admit it or not.
Every book store occupies a niche — you can be small and artisanal, like the corner bakery serving up cronut knock-offs. You can be warm and neighborly, like the little sandwich shop that has great coffee and nice tables. You can be hip and trendy, like the pizza parlor that always experiments.
Or you can be big. Most of us buy food in a grocery store. The supermarket has a deli, bakery, and pharmacy — and a meat department because no one can go to the local butcher any more, and a produce department because no one even knows what a ‘green grocer’ used to be. We don’t all live within walking distance of a corner cafe or bistro — or indie bookseller — but we all know where the local supermarket is.
Barnes & Noble has to be the book supermarket, and that means departments, and that means DVDs and CDs, board games and jigsaw puzzles, blank books and bookmarks, cheap gift crap that no one buys — and yes, Nook.
[Would B&N do better if they got rid of the crap and just sold books? Gods, yes, I’ve been making that argument for years. But B&N sees more of a future in the crap than in the books, and the idea of being a department store is perhaps anchored deeper in their big-box-DNA than the books themselves are.]
B&N needs Nook, because they need the stage prop, the show of being Amazon’s equal.
I’m not sure if this propaganda effect is worth $60M or $100M or $200 Million a year (~$1.4 Billion to date) but B&N certainly thinks so, and is set to release yet another tablet.
