KNOWLEDGE AT WHARTON: Barnes & Noble had a rough holiday season: Same-store sales fell compared to a year ago and revenue from sales of the Nook tablet stalled. Despite a heavy investment in the Nook business, Barnes & Noble is expected to have a three-year cumulative loss of more than $700 million, according to Barclays Capital — an indication that the bookstore’s multi-front war with online retailer Amazon.com doesn’t seem to be working…
Barnes & Noble isn’t alone. Many traditional retailers are struggling against online powerhouse Amazon.com. Best Buy has hatched plans to downsize its stores, focus on installation services and match Amazon’s prices. Target, too, has said it will match prices from Amazon and other select online retailers in 2013. Bricks-and-mortar retailers are battling a phenomenon called “the showrooming effect,” the consumer practice of checking out a product in a retail store and then buying it online at a better price…
Despite the bankruptcy of chief competitor Borders in 2011, Barnes & Noble has struggled to increase sales. It has actively moved to address consumers’ rapid shift from print to digital books and to combat Amazon’s expanding Kindle business. However, Barnes & Noble’s Nook now faces a growing number of competitors in the sector, including Apple’s iPad and iPad Mini and Amazon’s Kindle HD devices, as well as a bevy of tablets based on Google’s Android platform. The challenge for Barnes & Noble is that it lacks a strong digital content ecosystem relative to Amazon, Apple and Google. Both Apple and Amazon, for example, have invested heavily in video content and digital music distribution. Barnes & Noble historically has focused solely on books… (more)
EDITOR: One change that would help them is ceasing to insult their customers by asking them to pay $25 a year to be rewarded with a 10% discount, which isn’t that big of a dea compared to Amazon pricing. It would be better if the customers receive the discount retroactively and in the future once they have annually purchased a hundred dollars of books
Print media is going the way of the typewriter. Self publishing is coming, perhaps with a loose knit syndicate.