B&N 10 Year Plan - Try your hand

darryl · 01-29-2013, 04:29 AM

Reading the thread in the News Forum headed B&N death spiral was quite thought provoking. As is evident from my brief contribution to that thread, I do not agree that B&N is irrevocably doomed. However, right now if they have a viable business plan for, say, the next 10 years, then I don't see it. This may, of course, simply be nothing more than the desirability of keeping the whole or parts of such a plan out of the public eye at this stage.

Hence, the question. Do you have any suggestions you would like to share on the ideas B&N need to start implementing to be a viable and successful business in 10 years time?

My own thoughts would include:

1. Close or in some cases downsize all unprofitable physical stores as soon as possible.
2. Invest in further development of Nook platform. Add support for Amazon and other formats where possible, including DRM support.
3. Develop exceptional website for purchase of Nook EBooks. Where possible, support Amazon and other format ebooks, including DRM support.
4. Look at possible Joint Ventures, Mergers etc with large publishers. Alternately, look at expanding its own online publishing, perhaps even by acquiring one or more of the existing players.
5. Monitor the sales of physical books very carefully, with a view to avoiding over exposure to this market.

I do not pretend any special expertise and could well be wrong on all counts. It just seems to me that the challenges faced by all players but Amazon at this stage are extreme, and even Amazon can't afford too many wrong decisions. I am interested in the thoughts of others.

JoHunt · 01-29-2013, 05:49 AM

My no. 1 suggestion is for B&N to sell worldwide. I would guess that a significant part of Amazon's revenue (for ereaders, ebooks, physical books, etc) is derived from outside the USA.

din155 · 01-29-2013, 06:11 AM

Quote:

Originally Posted by joehunt

My no. 1 suggestion is for B&N to sell worldwide. I would guess that a significant part of Amazon's revenue (for ereaders, ebooks, physical books, etc) is derived from outside the USA.

This! Not much is there that they haven't tried with moderate or no success except supporting mobi (AZW) format. Not sure if supporting Amazon is going to help them. Possibly start pushing aggressively for Non DRM content as well. It could help in getting rid of platform/device dependency.

fjtorres · 01-29-2013, 07:23 AM

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.
Etc.

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.)

charmian · 01-29-2013, 08:40 AM

Re: supporting Amazon books. Isn't the entire point of the Nook platform to capture all the media revenue by NOT supporting other platforms, such as Google Play and Amazon? I don't think Nook Tablets are competitive against Nexus 7 and iPad mini. They should focus IMO on the low cost tablets, meaning sub-$150. The Nook got what success it had not by being the best, but by being cheaper. That said, Amazon and Google are determined to fight this one out, so there might not be a window of opportunity for much longer.

Going international will be very difficult, as in most of the richer countries there are already established players (like Kobo), and without the physical stores, is Nook really better than Kobo or Sony? Kobo has not been successful in the US for various reasons. I suspect that if B&N would face very similar challenges if they tried to go international.

B&N could also start buying and selling used books. Low-cost used books are one area where physical stores can beat online price-wise (if not selection-wise), because you don't need to pay for shipping. This is actually Gamestop's main source of revenue, IIRC.

Alternatively, B&N could reduce their book shelf space even more and become a gift/toy/game store that has a book section and a cafe.

teh603 · 01-29-2013, 09:04 AM

Quote:

Originally Posted by din155

This! Not much is there that they haven't tried with moderate or no success except supporting mobi (AZW) format. Not sure if supporting Amazon is going to help them. Possibly start pushing aggressively for Non DRM content as well. It could help in getting rid of platform/device dependency.

Non-DRM content is a no-go as long as B&N is buying from the Big Four publishers. As long as they're using a 1920s business model, they're going to be strangling everyone else below them on the distribution tree.

JoHunt · 01-29-2013, 09:09 AM

Quote:

Originally Posted by charmian

Going international will be very difficult, as in most of the richer countries there are already established players (like Kobo), and without the physical stores, is Nook really better than Kobo or Sony? Kobo has not been successful in the US for various reasons. I suspect that if B&N would face very similar challenges if they tried to go international.

B&N has no one to blame but itself for the Nook not being a recognizable ereader for the rest of the world. They handed the international market to Amazon (and a few other companies) on a silver plate. But perhaps as you stated, it is already too late for them.

LovesMacs · 01-29-2013, 12:00 PM

My suggestion doesn't have anything to do with books. B&N should stop selling DVDs and CDs. I doubt many people buy their movies and music from B&N (if they buy physical media at all), and the floor space could be used for something with higher turnover.

din155 · 01-29-2013, 12:22 PM

Quote:

Originally Posted by teh603

Non-DRM content is a no-go as long as B&N is buying from the Big Four publishers. As long as they're using a 1920s business model, they're going to be strangling everyone else below them on the distribution tree.

I am not sure if they will attract new customers for digital media solely based on Nook hardware. If they don't start branching out to more generic platform and I am not talking about the nook app but DRM free content, they will keep going down. They should have some say in how to sell content from the big four. But it’s just a theory. Either they should be cheaper than others, or be better at customer service, or provide something that others don't. Just being big is not going to stop them from going down. Anyway, the ship is theirs to sink.

fjtorres · 01-29-2013, 12:40 PM

Quote:

Originally Posted by din155

They should have some say in how to sell content from the big four.

Alas, the only thing more arrogant than a B&N exec are the BPH execs.
They didn't lift a finger when Borders imploded and they aren't going to even blink if B&N ever gets that close to going under.

People (especially at B&N) seem to think B&N is important enough to the BPHs that they will swoop in to rescue them from their own miscues. They aren't and they won't.

Expect no say-so and no favors.

teh603 · 01-29-2013, 01:07 PM

Quote:

Originally Posted by fjtorres

Alas, the only thing more arrogant than a B&N exec are the BPH execs.
They didn't lift a finger when Borders imploded and they aren't going to even blink if B&N ever gets that close to going under.

They might blink if Wal-Mart somehow went under, but probably not with anything less. Wal-Mart being any company's biggest distributor right before they get sued into bankruptcy for not being able to provide cheap enough goods and then turned into a Wal-Mart subsidiary.

kennyc · 01-30-2013, 06:46 AM

Quote:

Originally Posted by LovesMacs

My suggestion doesn't have anything to do with books. B&N should stop selling DVDs and CDs. I doubt many people buy their movies and music from B&N (if they buy physical media at all), and the floor space could be used for something with higher turnover.

like chocolate!

fjtorres · 01-30-2013, 06:50 AM

B&N has their own 10 year plan: Keep on doing what they're doing. They are not changing a thing. Straight from the top.
http://thebookseller.com/news/bn-ful...l-concept.html

xendula · 01-30-2013, 08:00 AM

We all seem to have the same ideas.

They should either stock more inventory or downsize the stores - they are much too large for the inventory they now have, and thus appear desolate and deserted - I remember when all the space was needed. I'd say, stock more books and less of everything non-books. If I don't find what I am looking for today, chances are I am not coming back a second time - I'll order from Amazon. (which I already do)
Improve customer service. Start with policies and management, then conduct employee training to make them realize why customer service is important.

I doubt expanding into international markets NOW will be a wise decision. Most European makets, for instance, already have their own, established ePub vendors, often connected to a brick and mortar bookstore presence. And then there is Amazon, now present in all the markets with high and growing erading rates. Maybe B&N saw that as well and this is why they did not do as they said they would and tackle international markets beyond the UK. Also, their Nook account model would not work over there, as you need a valid credit card to set up an account, and having one is not as common in Europe as in the US. (Is the UK different in this respect, I wonder, or did they change this for the UK?)

Sregener · 01-30-2013, 08:12 AM

In any market, the path the success is to either be better than your competition or be different from your competition. In this case, it's hard to see them besting Amazon at the online service. And it's impossible to believe their toys, games, music and movies are going to give serious competition to the Walmarts and Targets. So their focus should be on books and the book-buying experience.

Their first dose of reality is that they have to price-match Amazon on books. It really is hard for me to pay list or close to list when I can get the book for half price from Amazon. And they'd do best if they could price match prior to the sale. If their reputation is "as cheap as Amazon, but in your hands now" rather than "it's a hassle to find the best price and then ask them to match it" they could see a serious uptick in volume.

Their second dose of reality is that pushing the ereader is not going to grow their business. What they need is to emphasize the real, physical aspects of reading. Comfortable seating areas, book clubs to discuss titles in the store, coffee shops, and well laid out displays are what is going to win the day for them. The easier they make it for people to not come into the store, the more they are going to lose to their superior competition in the online world.

If what I'm suggesting is that B&N become, once again, a traditional book store, you're right! This is what has been lost, in their "chase the trend of the day" approach that, coupled with severely overpriced titles, has led them to the brink. I don't believe they have the means to compete with the big boys on the big boys' turf, so they're going to have to be different.

01-29-2013, 04:29 AM	#1
darryl Wizard Posts: 3,108 Karma: 60231510 Join Date: Nov 2011 Location: Australia Device: Kobo Aura H2O, Kindle Oasis, Huwei Ascend Mate 7	B&N 10 Year Plan - Try your hand Reading the thread in the News Forum headed B&N death spiral was quite thought provoking. As is evident from my brief contribution to that thread, I do not agree that B&N is irrevocably doomed. However, right now if they have a viable business plan for, say, the next 10 years, then I don't see it. This may, of course, simply be nothing more than the desirability of keeping the whole or parts of such a plan out of the public eye at this stage. Hence, the question. Do you have any suggestions you would like to share on the ideas B&N need to start implementing to be a viable and successful business in 10 years time? My own thoughts would include: 1. Close or in some cases downsize all unprofitable physical stores as soon as possible. 2. Invest in further development of Nook platform. Add support for Amazon and other formats where possible, including DRM support. 3. Develop exceptional website for purchase of Nook EBooks. Where possible, support Amazon and other format ebooks, including DRM support. 4. Look at possible Joint Ventures, Mergers etc with large publishers. Alternately, look at expanding its own online publishing, perhaps even by acquiring one or more of the existing players. 5. Monitor the sales of physical books very carefully, with a view to avoiding over exposure to this market. I do not pretend any special expertise and could well be wrong on all counts. It just seems to me that the challenges faced by all players but Amazon at this stage are extreme, and even Amazon can't afford too many wrong decisions. I am interested in the thoughts of others.

01-29-2013, 07:23 AM	#4
fjtorres Grand Sorcerer Posts: 11,732 Karma: 128354696 Join Date: May 2009 Location: 26 kly from Sgr A* Device: T100TA,PW2,PRS-T1,KT,FireHD 8.9,K2, PB360,BeBook One,Axim51v,TC1000	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. Etc. 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 07:29 AM.

01-30-2013, 08:00 AM	#14
xendula eBookworm Posts: 2,300 Karma: 4525746 Join Date: Aug 2005 Location: East Coast brrrrr Device: Kindle 4B/K ~ Nexus 7 ~ Kindle Paperwhite 1&2 ~ iPad Air	We all seem to have the same ideas. They should either stock more inventory or downsize the stores - they are much too large for the inventory they now have, and thus appear desolate and deserted - I remember when all the space was needed. I'd say, stock more books and less of everything non-books. If I don't find what I am looking for today, chances are I am not coming back a second time - I'll order from Amazon. (which I already do) Improve customer service. Start with policies and management, then conduct employee training to make them realize why customer service is important. I doubt expanding into international markets NOW will be a wise decision. Most European makets, for instance, already have their own, established ePub vendors, often connected to a brick and mortar bookstore presence. And then there is Amazon, now present in all the markets with high and growing erading rates. Maybe B&N saw that as well and this is why they did not do as they said they would and tackle international markets beyond the UK. Also, their Nook account model would not work over there, as you need a valid credit card to set up an account, and having one is not as common in Europe as in the US. (Is the UK different in this respect, I wonder, or did they change this for the UK?)

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01-29-2013, 05:49 AM	#2
JoHunt I am what I am Posts: 6,625 Karma: 62235665 Join Date: Sep 2011 Device: iPad3, Voyage	My no. 1 suggestion is for B&N to sell worldwide. I would guess that a significant part of Amazon's revenue (for ereaders, ebooks, physical books, etc) is derived from outside the USA.

01-29-2013, 08:40 AM	#5
charmian Addict Posts: 386 Karma: 1814548 Join Date: Feb 2009 Device: Kindle 3, Kindle PW2	Re: supporting Amazon books. Isn't the entire point of the Nook platform to capture all the media revenue by NOT supporting other platforms, such as Google Play and Amazon? I don't think Nook Tablets are competitive against Nexus 7 and iPad mini. They should focus IMO on the low cost tablets, meaning sub-$150. The Nook got what success it had not by being the best, but by being cheaper. That said, Amazon and Google are determined to fight this one out, so there might not be a window of opportunity for much longer. Going international will be very difficult, as in most of the richer countries there are already established players (like Kobo), and without the physical stores, is Nook really better than Kobo or Sony? Kobo has not been successful in the US for various reasons. I suspect that if B&N would face very similar challenges if they tried to go international. B&N could also start buying and selling used books. Low-cost used books are one area where physical stores can beat online price-wise (if not selection-wise), because you don't need to pay for shipping. This is actually Gamestop's main source of revenue, IIRC. Alternatively, B&N could reduce their book shelf space even more and become a gift/toy/game store that has a book section and a cafe.

01-29-2013, 12:00 PM	#8
LovesMacs Fanatic Posts: 513 Karma: 2644386 Join Date: Apr 2012 Device: iPhone, Kindle Touch	My suggestion doesn't have anything to do with books. B&N should stop selling DVDs and CDs. I doubt many people buy their movies and music from B&N (if they buy physical media at all), and the floor space could be used for something with higher turnover.

01-30-2013, 06:50 AM	#13
fjtorres Grand Sorcerer Posts: 11,732 Karma: 128354696 Join Date: May 2009 Location: 26 kly from Sgr A* Device: T100TA,PW2,PRS-T1,KT,FireHD 8.9,K2, PB360,BeBook One,Axim51v,TC1000	B&N has their own 10 year plan: Keep on doing what they're doing. They are not changing a thing. Straight from the top. http://thebookseller.com/news/bn-ful...l-concept.html

01-30-2013, 08:12 AM	#15
Sregener Addict Posts: 239 Karma: 1664052 Join Date: Mar 2011 Device: Kindle 4NT	In any market, the path the success is to either be better than your competition or be different from your competition. In this case, it's hard to see them besting Amazon at the online service. And it's impossible to believe their toys, games, music and movies are going to give serious competition to the Walmarts and Targets. So their focus should be on books and the book-buying experience. Their first dose of reality is that they have to price-match Amazon on books. It really is hard for me to pay list or close to list when I can get the book for half price from Amazon. And they'd do best if they could price match prior to the sale. If their reputation is "as cheap as Amazon, but in your hands now" rather than "it's a hassle to find the best price and then ask them to match it" they could see a serious uptick in volume. Their second dose of reality is that pushing the ereader is not going to grow their business. What they need is to emphasize the real, physical aspects of reading. Comfortable seating areas, book clubs to discuss titles in the store, coffee shops, and well laid out displays are what is going to win the day for them. The easier they make it for people to not come into the store, the more they are going to lose to their superior competition in the online world. If what I'm suggesting is that B&N become, once again, a traditional book store, you're right! This is what has been lost, in their "chase the trend of the day" approach that, coupled with severely overpriced titles, has led them to the brink. I don't believe they have the means to compete with the big boys on the big boys' turf, so they're going to have to be different.