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Broken Bookselling

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Barnes and Noble Continues Slow Slide to Extinction as Experts Predict the Worst

January 21st 2013

Barnes-and-Noble store shot

Wharton Marketing Stephen J. Hoch guru was blunt: "I don't think Barnes & Noble has a prayer," Hoch says. NY Racked wrote: "One of the few remaining Barnes & Noble bookstores downtown has abruptly shuttered, and it did so in the most depressing way possible. A sign on the doors of the Sixth Avenue location reads 'Closed Forever,' and there's a stack of Nooks sitting by a trash can. As far as Manhattan is concerned, there are still six stores in business—including the Union Square and Tribeca outposts. The other sign on the window doesn't say much, except that the location is dunzo (our words, not theirs), and offers a thank you for the last 12 years of patronage. That same sign also suggests customers shop online on the bookstore's website, though that might not bode to well for the other brick-and-mortar locations."

Barnes and Noble should have grown due to the bankruptcy of Borders, the expansion of Internet buying, and the explosion of e-books. Instead the dysfunctional book chain recorded an approximate 12 percent drop in all three areas--its retail stores, its BN.com website, and its Nook e-reader. The end is being predicted by critics and experts, and being hammered into reality by millions of Americans who are voting with their wallets and turning away from the collapsing giant.

"Barnes & Noble and Best Buy are places that are showroomed like crazy," says Wharton marketing professor Hoch. He was referring to the fact that customers go into the stores to shop around and inspect the goods, but then make their purchases from Amazon or other etailers. Hoch predicts that neither chain is likely to survive Amazon's assault because the stores don't have the service levels to stand out. "Go into a Barnes & Noble or a Best Buy and you see big box stores that should know their businesses. What you find out, however, is that employees don't know their business, and you don't get great help."

Hochdid hold out a ray of hope for BN. "The thing the company does have is 674 college bookstores. Those are different because Barnes & Noble has a captive audience and can sell memorabilia." But that would shrink the company to a barely visible bookseller that stocks only a few titles--those ordered by professors for class. In an article entitled, "Is Barnes & Noble Getting Out Of The Bookstore Faster Than We Thought?" Storefrontbacktalk.com declared: "Listen to any recent Barnes & Noble earnings call and you’ll hear lots about the potential of the Nook e-reader and some online magic, a little about college bookstores (where students still often have to buy dead-tree textbooks) and the rare reference to non-college physical bookstores that is generally about how well they demonstrate the Nook. Any talk about those bookstores selling actual soon-to-be-dog-eared books? Not so much. ... We envisioned the chain’s 689 retail bookstores (along with its 674 college bookstores) to stick around for at least a year or two longer. Perhaps not."

Most striking is the company's bizarre inventory practices. Whereas Amazon jumps through hoops to ensure that it can obtain inventory from any source on the planet--from distributors to the authors themselves--Barnes is constantly returning and declining to stock the very books it needs to satisfy customer demand. Retailers such as Barnes & Noble and Best Buy are places that are showroomed like crazy," says Wharton marketing professor Hoch. Hoch was referring to the fact that customers go into the stores to shop around and inspect the goods, called "showrooming," but then they make their actual purchases from Amazon or other etailers. Hoch predicts that neither chain is likely to survive Amazon's assault because the stores don't have the service levels to stand out. "Go into a Barnes & Noble or a Best Buy and you see big box stores that should know their businesses. What you find out, however, is that employees don't know their business, and you don't get great help."

Hoch did hold out a ray of hope for BN. "The thing the company does have is 674 college bookstores. Those are different because Barnes & Noble has a captive audience and can sell memorabilia." But that would shrink the company to a barely visible bookseller that stocks only a few titles--those ordered by professors for class. In an article entitled, "Is Barnes & Noble Getting Out Of The Bookstore Faster Than We Thought?" Storefrontbacktalk.com declared: "Listen to any recent Barnes & Noble earnings call and you’ll hear lots about the potential of the Nook e-reader and some online magic, a little about college bookstores (where students still often have to buy dead-tree textbooks) and the rare reference to non-college physical bookstores that is generally about how well they demonstrate the Nook. Any talk about those bookstores selling actual soon-to-be-dog-eared books? Not so much. ... We envisioned the chain’s 689 retail bookstores (along with its 674 college bookstores) to stick around for at least a year or two longer. Perhaps not."


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