Meanwhile, at Barnes & Noble: Q2 financials…not looking good for NOOK books
Should we still care what happens at Barnes & Noble?
Competition from the NOOK has apparently driven some interesting improvements in Amazon devices over the years (there was a frontlit NOOK before the Paperwhite, for example), features for e-books (B&N had lending first), Amazon’s price matching them on e-books, and Amazon has followed B&N in dropping the price on hardware.
I think that influence has considerably weakened, though, and may continue to do so.
The NOOK has been tanking, and for a while, I thought that NOOK Books might continue online after the NOOK hardware ceased to be a brand (B&N doesn’t make the tablets any more, but there is a NOOK name).
makes me more pessimistic about the NOOK Books.
Specifically, there is this, which I will briefly excerpt:
“NOOK sales of $43.5 million decreased 31.9% due primarily to lower content sales.”
Not primarily due to hardware, but to content.
Content for the NOOK is more than just e-books (there are apps, for one), but I was a bit surprised to see that.
Comparable store sales, excluding the NOOK drag, were pretty steady…only down .5%.
That doesn’t mean that p-books (paperbooks) are going to save e-books, though. They mentioned lower online sales…and increase in wages in the stores.
As a former manager of a brick-and-mortar bookstore, I’ve mentioned before, you are fighting three things primarily: rent; wages; and “shrinkage” (shoplifting, employee theft, and damage).
Those are your challenges…but you also have to be a place (nowadays) where people are willing to pay more money than they would pay online to support you.
It doesn’t look like Barnes & Noble is doing that successfully, at least as far as books are concerned.
Toys are going well for them. 🙂 That is, looking at 2015 growth versus 2014 levels.
A reader sent me a link to this
in a private e-mail. It’s called “Barnes & Noble’s Problems Are Self-Inflicted”, and that’s the basic premise, supported by interesting charts.
The thrust is that B&N is doing worse than the print book business generally.
While the article does start out with what I would consider a debatable statement (“Barnes & Noble (NYSE:BKS) is the only remaining brick-and-mortar mass retailer of books…”) with which I would think Books-A-Million would disagree, I agree with most of what it says.
Check out the first chart in particular, showing the relative rise in what appears to be online sales of p-books perhaps combined with e-books, and brick-and-mortar bookstores.
To be clear, I think bookstores can survive and thrive in the coming decade.
They need to have personality and they need to be a destination shopping experience.
Unfortunately, I don’t think Barnes & Noble at this point is that.
I also managed a brick-and-mortar game store, and my sense is that B&N’s toy/game sales are benefiting by being in a bookstore. I think it gives them a patina of respectability for some people that going to a Toys R Us might not have.
If B&N was just a toy/game store, I’m not convinced they’d survive…they’d be battling Costco, Walmart, Toys R Us, and, importantly, the online retailers…like Amazon.
When I managed a gamestore, we would give you a hands-on experience. We knew the games (we had game nights for the employees), and we’d open a box to show it to you, if you wanted. We did have a shrink wrap machine in the back, so if everything was still good, we could shrink wrap it again.
That wasn’t my idea (I wasn’t the owner, I was a manager), but I certainly had the authority to take something out of stock rather than shrink wrap it again, if I thought it wasn’t as good as new.
I thought that store was a good shopping experience…and customers generally liked shopping there. There were several branches, including one in the Embarcadero in San Francisco (that one was mine). We did a lot of business with German tourists, who were buying role-playing game elements not yet released in Germany.
That was only a small part of what we sold…we also sold boardgames, chess sets, Go, Mah Jongg, darts (a small, but intricate part of the selection), and more.
We did some radio advertising (I was in a commercial).
We had media coverage of an event I designed, the Great Game Race.
If it had been a bookstore? It could make it, with proper management…maybe not in the Embarcadero, though. 😉
Back to B&N…
I don’t claim to be good at predicting what will happen to stock, but I think this is not good for B&N tomorrow. Some people might go bargain shopping after a drop, but honestly, I wouldn’t be investing in it.
Amazon will still have challengers…remember how entrenched the big publishers were before e-books. Amazon has an increasing amount of the infrastructure of the internet, but would it be harder to disrupt them than it was to disrupt the near totality of the big publishers in the brick-and-mortar bookstores?
Again, I would say yes. 🙂
Amazon is a lot more flexible.
It’s more of an idea (several ideas, actually) than one existing process.
I think they can swivel in a way that the big publishers and brick-and-mortar stores couldn’t.
Barnes & Noble has tried some things…I don’t know that they are the right things, but they did make an effort.
What do you think? Was Barnes & Noble a victim of circumstances, or was it their inherent vulnerabilities? Will they survive? If so, in what form? How does all this affect Amazon…and us as readers? Feel free to tell me and my readers what you think by commenting on this post.
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