The Barnes And Noble Makeover

Netflix moved from hard goods to soft, and Borders didn't. Netflix is growing and Borders is bankrupt. So it is now Barnes and Noble's turn to decide where it's future lies. "As reading moves ever faster from hardcovers and paperbacks to electronic gadgets, the retailer is attempting to reinvent itself as a seller of book downloads, reading devices and apps." The loss of Borders can potentially help B&N in the short run to improve it's store sales while focusing on it's next generation of products. Perhaps it is time to take notice too of the Apple Store model to help reconfigure stores to a software industry.

"Today's Barnes & Noble depends on its bookstores to introduce customers to its Nook e-readers, but its growth and future profits hinge on outfoxing and outselling deep-pocketed rivals Amazon.com Inc., Apple Inc. and Google Inc. on the digital-books front." And it is B&N stores that can help in that differentiation. It may require a merger with a different type of retailer, it will require a keen focus on service, and other differentiation strategies to make book lovers more loyal to the B&N model then to Amazon and others.

Like Apple stores, the B&N store is a place to gather, a place to test products, and a place to mingle with like minded customers. But once a customer buys their Nook, they need reasons to return to the store. Whether merchandising or service, adding this push and perhaps even bringing your Nook with you to the store can lead to more selling opportunities. I watch as my son brings his Nintendo DSi to Game Stops to download free characters, to look at new games and to ultimately shop. Perhaps B&N should consider an expansion into gaming as another means to bring customers into their stores. With B&N stores so large in size, they will need other merchandise to sell. Digital books don't require any space and their will be less of a need to stock large volumes of hardbound books. If not a reallocation of space, then stores may need to get physically smaller.

The loss of Borders is an opportunity for B&N to grow. There is a new generation of readers out there getting more and more comfortable with digital over physical books. B&N has taken the right direction with their Nook; their innovation needs to continue to maintain their leadership position.