After basically announcing that they were up for sale today, I have gathered that Barnes & Noble is struggling.
Hardly news, right? Under statement of the year, even. Profits are down, and it’s becoming harder and harder to compete with behemoths like Amazon and Wal-Mart. Hell, I don’t even think B&N even has a CEO right now. So things are bad. Not “split in half after hitting the iceberg” bad. More like “Oh shit, there’s an iceberg ahead; we need to start shoveling in the coal and turning the ship” bad.
If you’re a book lover like me, that’s the silver lining. Barnes & Noble is struggling, but there’s fight left in them. And changes can certainly right the ship.
What are those changes? I’m sure they have plans. But if they don’t — or if any potential buyers are reading this and need some advice — here are a few suggestions on staying afloat (OK, I’m done with the boat analogies).
1. Close out some stores. Obvious, right? Look, if you want to play ostrich and bury your head in the sand about it, go ahead. I’m upset about this too — the closest B&N to me is roughly 50 minutes away. Beyond that, 90 minutes. After that, over 2 hours. After that? I’m afraid to look. I don’t want these stores to close — I’m still pissed about the Borders that was 30 minutes away and closed — but to recapture profitability, Barnes will not be able to continue operating at its current level.
So they need to look at numbers. What stores are currently deep in the red? Also, they need to look at stores that are close to other stores to avoid a harsh impact on buying customers, as well as the potential to transfer employees and minimize job loss. If there are 600+ stores, pessimistically, I’d say 100 stores are closing. Optimistically, I’d say less than 25. It’s probably going to be somewhere in the middle. And while we’re looking at those numbers, let’s find trends. Why is Store A so much more profitable than Store CCC? What are they doing differently?
But if articles I read are true — and assuming they own the structures — closing stores could turn into leasing opportunities for up-and-coming businesses Warby Parker or Casper (Thank You Mr Bary).
Dying limbs get cut off trees. Sadly, the same is true of struggling retail chains. I hate it, but it’s business. And I’m not ready to see B&N die.
2. Reward Loyal Customers Like the Ice Cream Shops and Gas Stations. Chances are you bought ice cream this summer, or purchased a fountain drink or coffee at a gas station. Did the ice cream shop give you a punch card? Did the gas station scan the little card on your keychain?
Both kinds of places offer the same type of reward system: buy so many of our product and we’ll offer you one free. Barnes currently does typically run “Buy 2, Get 1 Free” sales, but it’s book dependent (only the ones on this table, only the ones with the sticker). What if you earned an 11th book after buying 10? What if it wasn’t limited to certain books, but instead any book, perhaps with a set dollar limit (most paperbacks run about 16.99; I understand if they’re unable to do this with brand new hardbacks)? Barnes currently runs a number of discounts, but could really do themselves a favor by raising the stakes.
Also, if you’ve ever noticed on your receipt, Barnes recommends titles to you based on purchases. But do they offer these books at a discounted rate personally for you for a number of days, say 20% off if you purchase within the next 30 days? Well, they should.
3. Let’s Get Interactive! As Bary notes in the article linked above, a number of B&N stores already offer book clubs, but not all of them, and only certain titles. The Barnes in Manassas, VA also offers Bingo nights. But I highly doubt all stores do. And why not?
I LOVE to read (Duh, right?), and I would LOVE to interact with others based on books. But I’m an extreme introvert, so finding or even starting a book club is not a venture I can, or am even willing, to try. And I certainly can’t be the only one who feels this way. But if there’s one at my local bookstore, I would definitely want to check it out. It’d be a great way for adults to interact. Or even a book club for teens/college students might help inspire friendships for kids like me who had a hard time making friends. And now that I have young children, I would be delighted to take them to a store reading for a children’s book where they’d get to see other kids and enjoy a fun night out.
And that’s the essence of point 3. To me, books are fun. Entertaining. So why shouldn’t bookstores be the same way, full of energy and entertainment opportunities? Again, I’m not knocking the ones that already do this: I’m just saying there are certainly opportunities to expand upon this. Which, again, leads back to my earlier statement: what are your successful stores currently doing that separates them from the pact?
4. Create an App Worth Downloading. A quick search on my phone at the App Store shows me that Barnes and Noble currently has several apps, but none seemed particularly appealing. And why is that?
McDonald’s has daily deals on their app. Target has coupons on their app that you can download. Does Barnes and Noble have enticing deals on their app? Doesn’t look like it. And why not? Here are a couple of things I’d like to see:
- Daily, or even Weekly deals. “Buy One, get one 25% off.” “Buy this book, 40% off this week only.” “Buy a book, and get a free coffee.”
- Pathway to Awesome Deals. I’m picturing a Candy-Land-Style board with certain “benchmarks” you have to hit (eg: Benchmark 1: Buy a book, then you move to Benchmark 2, etc) and at the end of the path when you hit the final benchmark, you get some awesome reward! Games could be quarterly so customers would have three months to reach the end of the path Wouldn’t that be fun??
- Piggybacking on the above point, what about a Scavenger Hunt? Create Weekly Clues that customers need to unlock (ie. What is the first word on Page 132 of Harry Potter and the Sorcerer’s Stone?). Once customer’s correctly guess the clue, a barcode unlocks that has to be scanned by a B&N employee (thus ensuring customers have to come to the store to do it), and then the next clue is revealed. After so many clues unlock, another handsome reward is waiting our faithful players.
- Trivia Games: Weekly Trivia Games (with book trivia, obviously) that with a passing score of say, 80% and above, a reward is offered (And yes, put a timer on the questions so cheaters can’t Google the answers).
See a pattern here? Rewards. Discounts. Fun. Just because you can’t necessarily beat a competitor’s prices, it doesn’t mean you can’t beat them. What can Barnes offer that Amazon doesn’t? Within that answer lies the key to success.
5. Reclaim Your Identity. Cut the Crap: Trivia Time! What is Barnes & Noble?
- a) Bookstore
- b) Toy Store
- c) Store for DVDs and CDs
- d) A Store for Useless Trinkets at the Register that No One Needs
- e) All of the Above
If you answered E, you are right. But that’s where Barnes went wrong.
I’d love to see numbers on the profitability of answers B-D. Are these things selling? Is the inventory hurting or helping sales? Because frankly, if it’s not a book, it probably shouldn’t be there when you’re losing millions in a year. Got news for you, Barnes: you have a hard time beating the competition at book prices, you sure as hell ain’t going to beat ’em at toys.
The answer to the above question should be A. In order to survive, Barnes has to remember its roots and appeal to that customer base. Books are what made you. Books are what can save you. Not overpriced stuffed animals. Not Marvel figures that are $80. Not card games. Not DVDs that cost less at Target, Amazon, AND Wal Mart. Inventory is costly. Inventory that doesn’t sell is painfully costly. So let’s run those numbers and remember who we really are: a BOOK store.
6. If We Are Ever Profitable Enough to Open More Stores, Cut the Coffee: Barnes & Noble does good coffee business. I am aware of that. Sadly, it’s a longer line than the book registers most of the time. And books and coffee go so well together! (In fact, I’m pretty sure I have a pillow that says that, along with rain) But maintaining the price to run a bookstore and a coffee shop is not cheap. Take it from a guy that works for a utility company.
Coffee costs money to make. Product aside, it runs up your electric, water, and gas bill (it probably runs up your trash bill too). It also forces you into maintaining a larger space, and larger spaces are more expensive to cool and heat. Like Jon Snow said: Winter is Coming.
Right now, Barnes is struggling to stay alive, so the very idea of opening stores is ludicrous. But if we can get to that point — and with all the uncertainties in the world right now, I have to believe that we can — we do not need to open a coffee shop as well. Leave that to Starbucks. Besides, without running data, I can guarantee there is probably already a Starbucks within 10 miles of every Barnes in the US. They need to stick to what they know best:
It just might be the key to their long term survival.