Digitalization is not lost on the priorities list of Barnes & Noble (B&N) executives; they can see the effects over the last 2 decades by looking at the company financial statements1. They have seen what has happened to Borders Group and scooped up some of its remains that fell by the wayside2. The word “digital” is found 72 times in the 2017 annual report1—the focus is there, but so far nothing has stopped the bleeding entirely. Their response has been understandable but predictable—cost-cutting, hiring a Chief Digital Officer (Fred Argir)3, trying their hand at an e-reader4, redesigning their web page5, running through CEOs etc6. In all of this, B&N’s efforts have failed to use digital innovations and explore how the consumer can be brought along to establish new in-store habits.
Fundamentally, there is a mismatch in digital between consumer expectations, current technological offerings, and what a given company like B&N delivers. Brand executives talk the talk of digital transformation, but often fall short on execution. A cluster of high performing companies have found success by prioritizing customer experience as a mindset7. In contrast to such successes, failure to adapt to customer expectations results in a decrease in brand loyalty and diminishing sales. Worse still is heavily investing in advanced technologies that consumers don’t want. Given the complex but ever-prevalent landscape B&N is navigating in being pitted against a tech company while clinging on to brick and mortar, some of B&N’s efforts have played missed the consumer mark8.
Currently, Fred Argir has boldly said that he doesn’t care what Amazon is doing. He said at Digital Book World Conference, “My win percentage on predicting what Amazon is going to do is very low. They’re going to do whatever they want to do.”9 B&N doesn’t consider itself to be a tech company10, but does recognize the importance of digital. Fine—but it’s going to take more than incremental changes such as website redesigns to win market share back. Argir’s answer, in conjunction with input from the new CEO, Demos Parneros, is trying to come up with creative ideas to invigorate the in-store experience. Parneros stated, “our stores are really much more about discovery and spending time walking through stores.”11
During the 2017 Summer, B&N launched the “B&N Podcast”, which is aimed at connecting readers with author’s sentiments on writing, their creative process, and what inspires their writing12. This seems a little late in the game, but is nevertheless a good tool to employ in trying to capture more customer purchases and enhance the B&N brand. To really gain any momentum, this needs to be combined with more far-reaching efforts to garner customers through digital means and match B&N’s offerings with customer expectations13.
Ultimately, B&N does not need to be Amazon; however, it should cultivate Amazon’s mentality of removing the friction in the in-store experience to make it enjoyable, seamless, and valuable in a way that Amazon cannot provide online. A portion of B&N’s recent efforts have been around creating an environment where people can relax, read and eat, but to complete the experience, building the capability for members to walk out of the store, book in hand, and be automatically charged would be an easy habit for consumers to cultivate. Furthermore, to reduce friction in its audiobook business, B&N stores could have phone setup kiosks to get the apps people need and/or download in-store trials for customers to start. This could also be positioned as a gift opportunity for parents and grandparents willing to use audiobooks, but wary of the technology. To match this throughout the store, as a customer walks around, select books could have display stands with codes for people to scan to be able to listen to books as they continue wandering the aisles. There are many ways to implement these suggestions, but it will come down to how the customer responds and is brought along to establish these kinds of habits to boost sales. The lower the friction and the pain point of adopting these digital delivery systems, the quicker the adoption rate, and the more it will proliferate. The iterative process that will ensue will help them stay in touch with consumers and keep up with their changing preferences.
Going forward, B&N will have to address some looming challenges. With Amazon coming into the brick and mortar scene in a technological fashion, how can B&N respond to retain its presence and remain unique? With consumer preferences being so liquid or fickle, how can B&N best build up its capabilities to stay informed and act quickly? How can B&N take advantage of the continued adoption of e-books and technology in education?
1Barnes & Noble, 2017 Annual Report (New York: Barnes & Noble, 2017), p. 4
2Galen Moore, “Will Barnes & Noble do business as Borders,” Boston Business Journal, October 3, 2011, https://www.bizjournals.com/boston/news/2011/10/03/will-barnes-noble-dba-borders.html, accessed November 2017.
3”Should Traditional Businesses in Digital Trouble Look to CDOs for Help,” Centric Digital, July 27, 2015, https://centricdigital.com/blog/digital-strategy/barnes-and-noble-cdo/, accessed November 2017.
4John Kell, “B&N Enters Hot Market With Its Nook Tablet,” The Wall Street Journal Asia, November 8, 2011.
5Natalie Gagliordi, “Barnes & Noble Looks to Boost Sales With Revamped Website,” ZDnet, http://www.zdnet.com/article/barnes-noble-looks-to-boost-sales-with-revamped-website/, accessed November 2017.
6”Barnes & Noble Announces CEO Departure,” Barnes & Noble press release (New York, NY, August 16, 2016).
Phil Wahba, “Barnes & Noble Names a New CEO, Again,” Fortune, April 27, 2017, http://fortune.com/2017/04/27/barnes-noble-ceo-2/, Accessed November 2017.
7Anatoly Roytman, “Expectations Vs. Experience: The Good, The Bad, The Opportunity,” Accenture, https://www.accenture.com/us-en/insight-expectations-vs-experience-good-bad-opportunity, accessed November 2017.
8James Manyika, Gary Pinkus, and Sree Ramaswamy, “The Most Digital Companies Are Leaving All the Rest Behind,” Harvard Business Review, January 21, 2016https://hbr.org/2016/01/the-most-digital-companies-are-leaving-all-the-rest-behind, accessed November 2017.
9Michael Kozlowski, “Barnes and Noble CEO Doesn’t Care About Amazon,” Good Ereader, March 15, 2016, https://goodereader.com/blog/electronic-readers/barnes-and-noble-cdo-doesnt-care-about-amazon, accessed November 2017.
10Joe Keenan, “Inside Barnes & Noble’s Digital Transformation,” TotalRetail, March 1, 2017, http://www.mytotalretail.com/article/inside-barnes-nobles-digital-transformation/, accessed November 2017.
11Phil Wahba, “Barnes & Noble Is Falling Further Behind Amazon,” Fortune, September 7, 2017, http://fortune.com/2017/09/07/barnes-noble-books/, accessed November 2017.
12“Barnes & Noble Launches ‘The B&N Podcast,’” Barnes & Noble press release (New York, NY, August 16, 2017).
13Edwin van Bommel, David Edelman, and Kelly Ungerman, “Digitizing the Customer Decision Journey,” McKinsey, June 2014, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/digitizing-the-consumer-decision-journey, accessed November 2017.