‘Smaller and less’ is the next chapter title in Barnes & Noble’s omni-channel book


It’s not exactly a page-turner yet, but the beleagured bookseller plans to reduce the size of its stores and stock it up with less non-book items.

Barnes & Noble
Less will be more?

If you’re in need of a good read, don’t bother with latest set of numbers from Barnes & Noble. We may not have reached the final page yet, but it’s pretty clear whodunnit. (Spoilers – it’s Amazon, in the library with the blunt instrument of online retail).

For the third quarter of FY18, ended 27 January, total sales were down year-on-year from $1.3 billion to $1.23 billion.  Same-store sales fell 5.8% for the quarter, which is bad news when a big part of your rescue plan – or “significant multi-year transformation” – is built around the idea that people love bookstores.

CEO Demos Parneros points to growth in the B&M membership program as evidence of this supposed brand loyalty:

Barnes & Noble’s membership program is a key element to strengthening our core and enhancing the overall value proposition. Over the past six months, we have been testing new offers tied to the program in certain markets and are encouraged by the results. Customers have responded well and we have added over 0.5 million members since the beginning of this fiscal year, bringing our total count to 6.5 million members.

He insists:

There’s incredible loyalty to the Barnes & Noble brand and the experience that our fantastic booksellers provide to customers every day. Customers love their bookstores and we are working hard to make bookstores not only more comfortable for them, but more inviting, easier to navigate etc.

With that in mind, the days of the large B&N store, complete with toys, novelties, DVDs and a rarely-troubled music section, could be numbered.

B&N plans to roll out five “prototype stores” this year, with ‘less is more’ as the underlying theme. As well as being much smaller in terms of floor space, there will be a tightened inventory and a lower, but more informed, staff headcount. Parneros asserts:

This right-sized format will have a new look and merchandise focused on books and other categories that are more reflective of today’s business model.

Omni-channel mix

Parneros sees this as a way to tackle what he calls “pretty well documented” challenges:

We have had consistent traffic shortfall over the past number of quarters. What our team has been focused on is how do we provide better experience to our customers, taking a hard look at pretty much everything in our business, beginning from our overall value proposition, starting with our merchandise mix, having all the right books at the right time available and we feel like we have done a really great job with that.

It’s all about getting back to basics in many respects, he adds:

Books are a heritage and centerpiece of everything we do. So the first pillar of our strategic plan is to strengthen the core. We are reasserting our book leadership by placing a greater emphasis on books while taking a much more pointed view of our non-book products.

We know that customers value Barnes & Noble for our expansive assortment, the expertise of our booksellers and the experience we provide. Our customer value proposition is a distinct competitive advantage for B&N and we are working to further improve our merchandise mix and hence, the overall shopping experience, increase the value of our membership program and improve our omni-channel capabilities.

On the omni-channel topic, there’s going to be more focus “to tie the barnesandnoble.com site to the store” – another example of the integration challenge cited by Nordstrom management. Ship-from-store was introduced six months ago and Buy Online, Pick-up In Store is “coming soon”. Many would argue “coming far too late”, but how that rolls out remains to be seen.

Despite all the apparent evidence to the contrary, Parneros pitches that B&N is actually well-placed in digital terms:

Beyond the in-store experience, Barnes & Noble has tremendous multichannel assets to deliver any book anytime anywhere in any format. Over the course of the past year, we have begun to utilize these assets to improve our omni-channel capabilities and better fulfil our customers’ needs.

For example, approximately six months ago, we launched our ship from store program, which fulfils bn.com offers from our store inventory. The program increased delivery speed while reducing shipping costs. Furthermore, later on this year, we will launch our buy online, pick-up in store offering for customers. This will replace our current Reserve Online, Pick-up In Store program. Through this new offer, our promise to customers is that they can place an online order and pick it up at their local store within one hour.

My take

The new store look-and-feel is going to be an interesting roll of the omni-channel dice. I can’t remember the last time I bought a book from a real-world bookstore. I’ll go in and browse through possible purchases, but then complete the transaction via Amazon at a lower price-point.

The cost factor strikes me as the thing that Parneros isn’t talking about at the moment. Making the stores a more welcoming experience doesn’t guarantee that visitors will up their spending if they know that they can pick up their choice of purchase for much less online. Still, at least B&N isn’t talking up that damn Nook device, for now at least.

Image credit - B&N

    1. Good stuff Stuart. I think I agree with the diagnosis but not the prescription or the prognosis that the company sets out. Essentially the new strategy will fail because it does nothing to change the business model which is pure merchandising. Moving books, selling books, overlaid with a patina of technology to enable buy on line pick up wherever. As somewhat of an expert on CRM and as a book author, I feel qualified to offer some additional ideas.
      First, BN’s approach doesn’t address the customer or the customer experience and therefore customer engagement, the ultimate battleground. They’ll disagree citing comfy chairs and espresso as important creature comforts. But that’s not it either. Many people don’t have time to hang around their homes with espresso and a good book and traveling to a bookstore to do this is challenging.
      People who read books tend to read them out of habit, part of their lifestyle, and they attach themselves to authors. Authors draw people into stores if for nothing else than to get a signed copy of the latest work. But I can tell you it’s tougher than coming up with rent and alimony to set up an author visit and a reading at the local BN.
      This approach works though, as any independent book seller will tell you. That’s part of the different business model I allude to. If BN wants to change its model then smaller might be a good idea but along with that comes community outreach and author involvement. All of that amounts to engaging the reader/customer. Engagement is something we’ve forgotten about in our march to higher volumes and profits. We forget at our peril.

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