There are two separate issues here:
First, there is Nook Media which is (on paper) a separate company from B&N proper and given the likelihood of a spinoff or further mortgaging or both it will be soon be run independently. And should. Tying the two adds nothing significant to either and if annectotal reports are to be believed, detracts from both. Indigo got it right when they sold off Kobo.
Second, the B&N retail operation needs to re-focus on consumers and customer service. That means less "high-minded" pronouncements, less tantrums, less whining about Amazon. And they need to stop pretending they are top dog and indispensable. They are not. Just shut up and sell.
To re-focus on consumers and service they need to change their entire sales strategy; "stock it and they will come" is not working. Consumers want convenience and driving for hours to a regional site to buy books isn't working. Especially when the books aren't there. Instead, they need to get the stores as close to the consumers as possible, much as Gamestop (a one time B&N property, oddly enough) does.
They need to close about 90% of their stores and replace them with double the number of much smaller stores.
They can start by dusting off the B. Dalton business model of 3000-5000 square foot stores with a shift staff of maybe three people. Put one in every suburban Mall if possible or at least one per suburb and mid-size city. Since traffic isn't coming to them, they need to go to the traffic.
The B.Dalton format is perfect for today: a mix of hardcover bestsellers, magazines, and genre paperbacks, supplemented with an assortment or other fast-moving books according to local tastes. The key metric is dollars per square foot.
Update the B.Dalton model with modern logistics and online: each metro area gets a central warehouse/repository that serves both online and a cluster of storefronts for same day/overnight special orders and ship-to-store service. Each store gets a special orders kiosk tied to the repository and, for some titles/formats, a POD machine.
No customer who walks in the doors should walk away with a flat "no" for an answer. Instead they should either find the book they want, wait a few minutes with a complimentary drink from the atached coffee/pastry shop for a POD copy, or told return in the evening/next day for the book they want.
They also need to rebuild their online storefront and, above all, rework their customer service to actually *provide* customer service. The shoud say yes over 90% of the time.
B&N is simply too good at *no* and not good enough at *yes*.
No, we don't stock it.
No, we can't get it quick.
No, you can't use the loyalty card on ebooks.
No, you can't return ebooks.
B&N worries too much about pleasing the big publishers and nowhere near enough about pleasing consumers. B&N needs to realize they need to go where the money is and the money is with the consumers. Modern consumers are not terribly inclined to make pilgrimages to the regional book warehouse/temple, not when the motherlode of book catalogs is just a smartphone or a PC away.
Note that a lot of the things I describe above: small site, close to the consumer, book-focused... All that already exists in the form of indie ebookstores.
Indies may not have the scale and resources to run regional depots or POD machines (unless they drop in price) but I could imagine a regional indie bookseller's coop doing it. (In my region, the local independent pharmacies did do it; they set up a coop buying and marketting arm that lets their "community pharmacies" match prices and inventory with the Walgreen's and CVS's of the world.)
Big box retailing no longer works for pbooks. The future of B&M pbook sales is small and local. Either B&N adapts or they will wither away and not just 20-stores per year.
That 20-store controlled shrinkage plan is a best case scenario that assumes they are still in control of the market. They aren't. They are neither big enough nor important enough to control anything at this point.
Control now belongs to the consumer: they have the money and they have the choices and they are using that power.
As for Nook, that is an entirely different problem. (Maybe later.)
Last edited by fjtorres; 01-29-2013 at 08:29 AM.