Barnes and Noble Case Study

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costs

Sound alternatives/Measurements

Since the majority of consumers of books are adults over 45 and children under 12, BN should implement promotions and events to both groups. Once you get them in the store, you must create an experience beyond rows of books. BN should find a way, by leveraging their size, to offer combined paper and digital versions of the same book at no additional cost to the consumer. Consumers would rush to the store in order to have the ability to switch from book to tablet at their choosing. Having this option would make the “Nook” relevant in the marketplace; legitimizing BN’s large investment in eReader business. In addition, increase the number of seats for coffee consumption and add charging stations for phones and tablets. Also, train sales associates who can recommend a book or help consumers find a book. In addition, create a special rewards card that offers discounts on adult and children’s titles that works in conjunction with the membership card. Attract new customers to your website by offering a discount or free one year membership for your first digital download. For Millennials, offer a rewards card for music purchases in order to attract new customers and develop brand loyalty. Develop a partnership with Apple or Google to offer music and movie digital downloads. Finally, build on the success of the campus stores through the co-partnering of colleges and universities to add additional products. Over 75 percent of college students prefer print over digital and therefore more likely to visit the store (BISG, 2015). Create a student services link on the website and offer discounts from hardware and software companies like HP, Apple, and Microsoft. Partner with cable companies, healthcare companies, banks, and other companies that provide services for students during their college years. This will create customer loyalty, add a new profit center, and drive traffic to the website.

Recommendations

First, in order to survive as the last brick and mortar book retailer, BN must increase store traffic and, at the same time, increase website traffic; many consumers typically use both or visit the store and later order books at home or work. One of the best strategies is to be a great merchandiser; offer something the others do not have. For example, offer a free digital download for every physical book sold. BN will need to use their size and leverage to convince book publishers that BN’s survival as a retail store is crucial to their business. In addition, the customer’s store experience must improve; book readings, book signings, and in-store promotions should be BN’s first priority. Offer a code for a discount on a digital download for visiting the store or downloading the app to drive traffic to the website. Offer a rewards card that gives a book to a school of your choice, in your name or child’s name, after you earned enough points. BN should offer exclusive content on their website. Invite authors and columnist to publish essays on BN’s website about their books and opinions on other books. In addition, promote self-publishing and offer a discount for exclusivity for a certain period of time. Since the “Nook” is an inferior product, BN could gain market-share by selling eBooks through its Nook iPad app. The “Nook” app should be universal for every type of tablet. To remain a viable player in the evolving and growing eBook business, BN should partner or co-brand the “Nook” with another tablet manufacturer, be it Apple or Samsung. Again, by offering combined paper and digital versions, these companies would welcome the opportunity to partner with BN.

Second, the digital book market is constantly evolving and BN should offer consumers a “Netflix” business model for books, where consumers pay a monthly fee and pick books from an extensive digital database. Currently, Booksfree.com is currently using Netflix’s business model and advertises themselves as "Netflix for Books" (Booksfree.com, 2015). On July 18, 2014, Amazon unveiled a digital subscription service offering unlimited e-books and audiobooks for $10 a month, called Kindle Unlimited. The service will give subscribers access to some 600,000 e-books; however, none of the biggest five publishers appear to be taking part, according to the New York Times (Lyster, 2014). In BN’s database they should include books that have been bestsellers, as well as, classic novels, romance novels, mysteries, and children’s books. “One of the major criticisms of Netflix has always been that its content is not fresh enough” (Vearsa, 2014). However, BN would need the support from publishers. The potential size of the market is large. Netflix has over 57 million subscribers generating $5.5 billion in revenues and $266 million in profits in 2014 (Netflix, 2015). Just like Netflix, BN would pay a nominal fee to the publisher for every book read. BN would only add content that would allow the business model to be profitable. Publishers and writers would welcome the constant revenue stream. BN would have the platform to develop an extensive database of loyal customers, within a large scope of demographics that would translate into increase visits to the store and website. The “Nook” could be the device of choice for streaming books making it a profitable segment for BN. In addition, this business model would be global with an enormous potential for growth. BN would need to seek the expertise of someone who knows the inner workings of this business model. “Extensions into breath or depth business ventures have to be done for smart, strategic reason” (Iacobucci, 2015). With BN’s size and leverage, it would change the way people read books, just as Netflix changed the way people watch movies and TV shows.

References

Barnes and Noble (2015). Retrieved from: http://www.barnesandnobleinc.com/for_investors/for_investors.html

Book Industry Study Group (2015). Retrieved from: www.bisg.org

Booksfree, (2015). Retrieved from: www.booksfree.com

Forbes (2015) Retrieved from: http://www.forbes.com/sites/greatspeculations/2014/04/02/estimating-kindle-e-book-sales-for-amazon/

Iacobucci, D. (2015). Marketing Management. (1st Ed.). Stamford, CT. Cengage.

Lyster, L. (2014). Will the Netflix model work for books and clothes? Retrieved from: http://finance.yahoo.com/news/why-netflix-copycats-could-show-consumers-are-broke-143251911.html

Netflix (2014). 10K, 2014 Annual Report.