Monday, February 25, 2013

Nook Strategy Not Working

Barnes & Noble attempt at building a digital strategy appears to have lost its footing.  Despite the world moving to tablet devices, Nook has not been able to capture a market share and produce a growing business.  "Navigating the digital revolution has been a tougher initiative for Barnes & Noble, as its Nook e-readers and tablets face stiff competition from Amazon, Google and Apple."  So what went right and what went wrong.

Analyzing the landscape, B&N already felt the competition from Amazon and other retailers in the book-selling marketplace.  But B&N also has been building out their merchandising to keep audiences coming to their stores.  And financially, the bookstores have been staying profitable.  Stores also kept adding more and more retail space to sell Nook devices.  But that also tends to directly hurt the hard copy side of the business.  Still it was a move to keep B&N customers as they transition from print to digital.

As nice as e-readers may be, the consumer quickly grew to prefer full featured tablets to e-readers.  Apple's iPad has the largest market share and Amazon was farther ahead with its infrastructure of apps and content.  Worse, the partnership with Microsoft never seemed to take a big step forward, especially when they introduced their own tablet, the Surface.  Nor did Microsoft embrace using the B&N retail space to help roll out the Surface and make Nook their official reading app.  Whatever financial support Microsoft gave to Nook never seemed to have a consumer connection.

Now comes word that B&N may split the company moving out the Nook and college bookstore businesses into separate entities.  Not being tied to the Nook may let B&N strike other partnership deals with other hardware providers.  And hopefully a leaner Barnes & Noble may be able to add another merchandising partner to their stores.  Perhaps a call from Amazon or Google may be a good start.

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