Print as the future of Barnes & Noble
Barnes & Noble is a venerable brand in US consumer circles. It touts itself as the world’s largest bookseller and is composed of three segments: the main retail segment, B&N College. and Nook Media.
In 2009, B&N launched the Nook, a product aimed at the upper middle class mother with two children. Overpriced and underfeatured, the Nook tablets have faltered despite the hundreds of millions of dollars poured into the Nook segment of the business.
After poor holiday sales in 2012, it was acknowledged that BN would need to move away developing hardware devices and look toward licensing its product on existing platforms. After the disappointing 2013 holiday sales, BN’s CEO was fired and the Nook Media head moved into the position leaving Nook Media without an internal leader.
Everyone in the business of publishing is holding its collective breath about the health of BN. On the plus side, the largest portion publishing revenues come from the sale of educational books (textbooks and other educational products) but that market is headed for a disruption soon. On the negative side, overall consumer dollars spent on books is contracting. One think tank believes that it will continue to contract over the next five years as consumers shift dollars from higher paid books to self published and free books.
Barnes & Noble cannot excise the Nook arm completely because its market share in the digital market would be foolish to give up and second a bookstore without a digital component looks backward and incomplete. And the Nook brand is meaningless without Barnes & Noble attached to it. But focusing hundreds of millions of dollars on the development of hardware instead of on selling books is also a non starter at this point.
Instead B&N should pour that money into the development of a low cost, high efficiency print on demand machine. The current print on demand technology requires the installation of a behemoth device that currently costs about $100,000. Have you paid attention to the posts about 3D printing? 3D printers cost about $10,000 and can print out guns, exoskeletons, and even small planes. How is it that it requires ten times the cost to produce something made of glue and paper?
Barnes & Noble’s future is in providing quality physical objects to in store customers. To that end, they need to do three things.
1) Encourage publishers or produce on their own print books as art. I’m not talking coffee table books. I’m talking about Dan Brown’s Da Vinci Code with pull out art and maps. (I’m using this book as an example because of its immense popularity). I’m talking limited edition print books that are gorgeous objects. Things people want to display on their bookshelves and share with their friends. Books that people will buy for their family members and friends as gifts. It’s the enhanced book we’ve all been talking about but in print form, rather than ebook form.
2) Print + Ebook bundling. I know. Ebooks are a big profit maker for publishers but the time has come to bundle the two together. BN could do exclusive bundling, maybe that is something it subsidizes for a while. In the devices it would license from another manufacturer, there would be NFC (near field communication) capabilities. Pass your device over the embedded NFC tag in the print book and you would instantly have the digital book on your device. (NFC tags do not require any power, but instead take the power from the nearby device).
3) Any book, no shipping necessary. If BN developed a low cost print on demand machine, it could take any book that was published in digital or print and create a print book for a customer in under five minutes. During the time it was printing the book, the customer could wander around, buy a coffee and find more things to purchase. Instead of telling the customer that they could order it in, they could capture that sale immediately. Plus, there would be the benefit of no wait time and no delay.
Further, BN could license this technology to the independent bookstores as well as coffee shops or even partner with Starbucks (as they already do). A low cost print on demand machine that could print and bind a book in just a few minutes could revolutionize brick and mortar bookstores. BN has a great retail name and it needs to use it to leverage the love people have for physical objects by using technology to meet the customer’s instant gratification needs.
I think the future of Barnes & Noble is by elevating the print book and bringing the digital conveniences to the retail format.