Barnes and Noble is experiencing another major change after the resignation of their CEO and falling profits — similar to what they faced back in 2008 and 2010.
Understanding the similarities and differences between digital and print consumption could save the book giant from collapsing altogether, notes Mike Shatzkin, the founder and chief executive of the Idea Logical Company. The publishing consultant said that splitting the company might save it from further decline. (The New York Times)
Here’s some other strategic thinking in terms of technology and consumer power:
Smart Phones
- More than half of internet traffic is coming from smart phone usage. Smart phone ownership is growing rapidly, with approximately 1.5 billion people using smart phones and approximately 5 billion people owning cell phones. This suggests there is dramatic future growth as cell phone users migrate to smart phones, especially considering smart phone prices may begin dropping significantly as the demand for high-end smart phones plateaus. (CNBC)
- One in four visits to retail sites in the US is made from a smart phone. Consequently, sales increased from 4 to 25 percent in two years with retail traffic to e-commerce predicted to increase to over 50 percent by 2014.
- Online visits to retail sites are happening while the shopper is in the store, indicating that consumers still want and need the tactile and visual experience of in-store shopping, while their minds and fingers enter the digital realm.
Tactile Experience
- Online purchases show no tie to a particular store the consumer visited; however, it was the initial visit which prompted the decision to buy the merchandise online.
- “Browsing in bookstores and libraries STILL is the number one way that most people discover new books,” points out Carol Fitzgerald, CEO and Founder of Bookreporter.com.
- The Washington Post reported, “Revenue at stores open at least a year dropped 8.8 percent and overall retail sales, which include Barnes & Noble bookstores and online sales, tumbled 10 percent, in part because of store closings.” Eliminating those stores may have hastened Barnes and Noble’s declining profits — because consumers want the tactile experience before they make their purchase. Also, bear in mind that immediately following Borders’ demise, e-book sales fell.
Business Strategies for B&N
- Despite technological advances with digital books, readers want physical books to hold, smell and feel, so emphasis should fall on the in-store experience.
- Readers could benefit from stores that act as curators:
“As I noted in an interview I did with USA Today, I would like to see the large warehouse stores become something more user friendly, with small shops like one sees on the first floor of Harrods. Make a big location user friendly by curating content. That way if the staff is not trained to do this, the content is shelved to make it a warmer shopping experience,” says Ms. Fitzgerald.
- Offer writer and reading group meeting areas, to bring consumers into the stores and create a hub for the consumer to find new reads while also offering consumer interaction.
- The rapport of staff and consumers developed during events could also lead to a better overall store experience, which would lead to increased book sales either through online or in-store visits. Adds Ms. Fitzgerald:
“I would like to see them offer preview sessions for readers to get them jazzed about upcoming titles, as well as what is in stores. Instead of just relying on author events, do something where customers are invited in for evenings of discovery with them. Then the top well-schooled staffers do these presentations. Offer multiple ones throughout a month for varying demographics.”
What does this mean for B&N?
Barnes & Noble needs to understand that consumers still want the good old fashioned, dog-eared, paper-turning rectangle, while shopping in a store that offers that tactile experience. Smart phones will influence the way books are purchased as e-commerce increases, but this also means that their stores have more influence on what the consumer buys, and are still a very much needed entity. Thinking ahead of the game by understanding trends and technology beyond the world of digital readers is imperative to remain at the top of the book stack.
Smart phone data came from the MIT Technology Review Mobile Summit 2013.