As Barnes and Noble Struggles to Find Footing, Founder Takes Heat | Hacker News Reader

As Barnes and Noble Struggles to Find Footing, Founder Takes Heat

nytimes.com

58 pointsSREinSF87 comments

The big figure that stood out for me in this article was that the number of independent bookstores in the United States has increased 30% in the last ten years. And there's enough people who love brick-and-mortar shops and physical books to warrant Indigo to expand into the U.S.

I think the article was spot-on about following the Waterstone model of making it a chain of hyper-localized stores, instead of a homogenous behemoth trying to be everything to the masses. Book readers are thinkers, and are turned off by mass marketing.

It's like how local coffee shops continue to survive and thrive, in spite of the ubiquitous presence of Starbucks. People like local, special things. What people on 35th Street in Chicago want to read is not the same as what people in Haight/Ashbury in San Francisco want to read.

If one wants to explore something from the other, there's always in-store ordering, and online. Plus the more-popular-than-ever-in-spite-of-the-zeitgeist libraries.

> Book readers are thinkers, and are turned off by mass marketing.

You cannot infer any of that from the simple act of consuming books. Books range from essentially written porn all the way up to dissertations on philosophy.

Plus book readers aren't some elite niche, the majority of the adult population (72%) reads books[0].

[0] https://www.irisreading.com/how-many-books-does-the-average-...

> You cannot infer any of that from the simple act of consuming books. Books range from essentially written porn all the way up to dissertations on philosophy.

It's just someone regurgitating Received Wisdom from the TV Age, when everyone was absolutely convinced that the world was on its way out as everyone got TV and destroyed their minds watching nonsense. Why, I betcha they'll be up to 1500 channels by 2015, I betcha, and absolutely nobody reading anything at all.

Think "Brian O'Blivion" from Videodrome, except people being obtuse enough to take it seriously.

Anyway, ideas have a way of sticking around, zombie-like, well after their original context is gone, being parroted by people who have no idea where they originally came from, or why. It's impossible to seriously evaluate everything in your head, but stepping outside the system every once in a while and asking why you think what you think is a good thing.

> the world was on its way out as everyone got TV and destroyed their minds watching nonsense.

And it has come to pass!

TV has become a prestige form of entertainment. We are currently in a new golden age of television.

Rather, it's 30-second meme videos or hour-long YouTube fringe conspiracy theory dissertations that are more problematic. Or social media, which has largely supplanted the trashy reality TV boom of the '00s.

One wonders what future form of entertainment will uplift social media and online videos, at least in comparison.

> One wonders what future form of entertainment will uplift social media and online videos, at least in comparison.

Hyper-realistic VR trash, of course!

No, it hasn't, and trying to say it has is a desperate attempt to paint the modern era as stupid, something which fools have been doing for every era throughout history.

Exactly.

According to your own source, the median number of books read was four while the mean was twelve. Most people do read books occasionally, but a large proportion of books are bought by a much smaller group of regular readers.

Thus my source perfectly illustrated the point I was making. 72% of adults are reading every year, and most are reading several books, this isn't some elitist niche.

Sure, but if a few percent of people read _many_ books then they could disproportionately drive revenue for books sales.

Absolutely. There's no way that Barnes & Noble (or any retailer) can compete with Amazon on selection or price. Where they can compete is on discovery.

Amazon is really great on converting high-intent customers, but terrible at discovery. (This is why it is beginning to open physical bookstores.) When was the last time you went to Amazon to "browse" for books? The physical retailers that can compete in this space will have a niche and a carefully curated selection of books to capture the type of people who want to relax and find a good book to read, rather than the people who already know what they want.

I actually find Amazon to be pretty amazing at discovery, but it's dependent on the "Customers who bought this item also bought" section under a book I know I like or am interested in.

I don't go to Amazon books just to start browsing aimlessly, but if I am yearning for a book in the same vein as another book I liked, I'll just search that book and look through the books suggested below. It does keep my discovery narrow, but that consequently keeps my reading wish list small and wieldy.

Speaking of coffee shops, I can't for the life of me remember where I heard/read this story, but there was a guy who owned a coffee shop who said that they got a big boost in business when Starbucks opened across the street from them. His claim was that Starbucks was approachable enough to turn more people in the town into regular coffee drinkers, and once they became regular coffee drinkers, they would often seek out something they liked better than Starbucks and end up in his shop.

My uncle in Kansas City runs a coffee shop that ran Starbucks of out business[1]. Starbucks brought coffee shops to the masses, but once people get hooked they generally like to support local craft shops that often taste better and feel more personal.

1. https://www.nytimes.com/2008/01/30/business/30sbux.html

I worked at Starbucks in Store Planning in the early nineties. The Real Estate group at the time was superior. Picking locations, revenue projections, competitive analysis. This was received wisdom inside the org.

Having Starbucks show up in your town educated (or created) the market. The nonsense about Starbuck driving local coffee shops out of business was never reality based. Competing chains? Sure. But not the mom & pops. And since then, there's been a proliferation of local chains.

That said...

Starbucks (for coffee) != Amazon (for books). Starbucks is more like Anheuser-Busch: mass market, consistency, broad appeal. By their nature, both leave plenty of room for microbrews and local roasters.

Amazon is more like Walmart, a destroyer of markets. Your margin is their opportunity.

There's also a "cluster of restaurants" aspect to this kind of thing. If you have multiple restaurants or coffee shops within the same area when people are interested in going out for food or coffee they'll go to that area. If there are multiple choices available when they arrive it may be up in the air which one they go to.

It's possible that the Waterstone model is something to consider moving forward, but it's unreasonable to act as if the flaw in B&N's business model was a "thinker" book reader market that is "turned off by mass marketing". Toys R Us, Radioshack, Payless, Circuit City, Sports Authority. There are dozens of retail businesses that have gotten the ax in recent years and they're all in very different industries.

The internet just flipped a bunch of retailers' business models upside down, and they're all dealing with the consequences.

The retail apocalypse is real.

Links: https://www.bloomberg.com/graphics/2017-retail-debt/ https://www.theatlantic.com/business/archive/2017/04/retail-... https://www.businessinsider.com/the-retail-apocalypse-has-of...

I'm not sure about the others but I'm pretty positive that Toys R Us was killed by a standard vulture capitalist business model.

Arrange a bunch of financing, purchase a company, saddle that company with the payments for the debt that you used to acquire it, charge that company large management fees and take out any profits that you can. Eventually when the massive debt load and payments are too much for the now under capitalized business see if you can sell the remains to someone else who thinks they might be able to get a little more meat off those bones.

but weren't the unfavorable terms of the purchase a result of poor sales?

Borders helped lead the way with this model, but there wasn't room for two mega-chains.

It's bizarre that bookstore consolidation, homogenization, and expansion happened just as text was converting to digital and becoming available via network.

B&N (1986) & Borders (1992)

Waterstones is fairly high up the list of things I miss from the UK high street (along with Pret a Manger).

I haven't bought anything in Waterstones for years, I think the WHSmith era ruined it for me (and the fact Blackwell's is close).

First the chains ate the small booksellers. Then the chains ate each other.

Why should I be sad?

Yes, their passing will see the further increase of independent booksellers.

Hard to feel any sympathy for them when they've been doing stuff like this (Feb 2018) http://audreyii-fic.tumblr.com/post/170886347853/the-entirel...

Yeah that was gut wrenching. I'll be a typical HN reader, however, and point out this

> B&N is the last thing standing between Amazon and a total monopoly of the publishing industry

This is total hyperbole. There are plenty of publishers and book stores with online store fronts. When you shop there instead of Amazon, a greater portion of your contribution supports the authors and editors. And as always, once B&N closes up for good, we will see a resurgence of local booksellers, anecdotally I already see it happening in my town. In a lot of ways, your local coffeeshops have also turned into mini bookstores as well, we could see this niche expand.

When you say you see it happening in your town, are you referring to an urban or suburban area? Not trying to contradict you here, just legitimately curious. I would think more of the local coffee shop customer would go to this sort of place rather than a Starbucks customer, if I had to guess.

It's a fair question -- I live in a suburban town, but I spend a lot of time in the urban center. Thinking of it from this perspective I would say the local bookstore revival is coming to the suburbs, and the coffeeshop quasi bookstore trend is more urban.

If one were smart, that would be the obvious chink in Starbuck's business model: create a chain of neighborhood-aware, individualized, community-focused coffee shops / bookstores / office-lite / meeting place.

Essentially blend Starbucks, WeWork, Half-Priced Books, FedEx Print & Ship with hyperlocal zine creation and publishing. Offer logistics support and deals to franchisees, then let them be unique.

Starbucks wouldn't be able to compete, because they've essentially defined themselves as "We're the same, wherever you go." Your moat would be the social integration of place and community. And you'd actually be inspiring local creation instead of corporate consumption.

Call it 'Nubucks', slap a shoe logo on there, and make a billion dollars and a better country.

Something like that yes, but they would be high price because supporting corporate overhead requires high margins

Holy moly! Well, that's a different narrative than I suspected...

Thanks for sharing this. Definitely the glimpse you don't see in the business section, but the result of corporations that solely answer to shareholders.

Yup, they're starting to kill off the CBDM positions as well. No severance either...

Unfortunately, I have no sympathy for the company, as they recently laid off much of their full-time, expert-level employees for a quick and dirty buck, likely accelerating their demise. It is a shame, though, because in some places - despite the rise of local bookstores - they are the only place left to not only _buy_ books, but a place to "hang out" around books. They also host readings for smaller writers. Yes, libraries also fulfill this function, but where else can you bring your kids, buy a coffee, look at/buy some books or magazines and then go to the nearby mall?

I've always been amazed at how well-stocked B&N stores are, even in small towns like Fresno, CA. Likely one of the only places to buy a philosophy or classic literature book in the whole town.

You have a fixed asset (facility) and variable assets (employees). If you are trying to keep your failing company from hemorrhaging money, you can cut the liquid assets, because you have to keep lights on.

The situation at Barnes and Noble is dire. Anyone of us in the same position would have done the same thing, if you cannot admit this, then you need to look at financial sheets and what it takes to run a business.

Bearing this in mind, a similar action was undertaken by Home Depot where they cut their experienced staff loose to save monies, but were not in dire straits, I was on the same bandwagon as you about the move.

Nonsense. If you can't properly staff a location, then you close that location. What B&N has done is made a system-wide staffing reduction. So now busy stores have fewer employees to help customers. This ends up hurting sales in all stores, ending in a death spiral.

B&N management has been incompetent for the better part of a decade; Riggio is mostly to blame since he can't seem to either delegate or let go.

Unless they targeted higher numbers of experienced staff at said slow stores where their higher pay and experience didn't result in significantly higher sales and largely left experienced staff at busy stores in place. I have no clue if that's how it was done, but it isn't required to do this sort of reduction evenly across the entire business.

The firing of the receiving managers and other positions were system-wide. Didn't matter what the store sales were, they lost these positions. At the store near where I live, they often have only 4 employees working at a time, for a very busy location. One at the register, one at the Cafe, one manager, and one bookseller. So good luck if you get a large group of customers who don't want to wait 30 minutes to purchase their books, much less find them on the shelves. It's a death spiral...

> even in small towns like Fresno, CA.

Fresno isn't a small town. It'd be the biggest city in ~50% of the states in the US.

Eh, fair enough. I guess I meant, "less culturally diverse" than a place like the Bay Area or Los Angeles.

Remember when we all hated B&N because they put all our local booksellers out of business?

Yep. Amazon did to B&N what B&N did to local bookstores.

Just like China did to Mexico in the 2000's what Mexico did to American factories in the 1990's.

(For those of you not old enough to remember, in the 1990's there was panic over Mexican maquiladoras just across the borders, just the same way that Americans today complain about Chinese factories.

And in the 1980's the same panic, but it was about the Japanese.

My prediction: East Africa will do to China what China did to Mexico.)

Does East Africa have the infrastructure and law enforcement necessary to compete with China in manufacturing?

China are pouring money into Africa, because they need their own China. Africa desperately needs infrastructure and expertise, while China desperately needs future sources of cheap labour and raw materials. It's a messy and complicated exchange that is neither neocolonialism nor a straightforward win-win.

What's really brilliant about your question is that if you took your time machine back about 30 years, it could be a quote about how India would never play a role in IT and China would never suffice for manufacturing. For that matter I've heard the same basic gist from American farmers regarding their competitors in South America. If someone else can do it cheaper, then the infrastructure and laws will more or less improve to meet the demand. And then when India becomes too expensive for IT, the work with go to <next place> and when China is no longer the cheap place for manufacturing then that will all go to <next place>.

From what I've read in financial publications, it's getting its act together. It's sick of doing contract labor making flip-flops and other plastic bits, and is making investments in infrastructure to compete in the long-term.

So, compete today? No. Compete in 2030? Maybe.

I haven't been there, myself, but that's what I read.

I thought china was bankrolling infra in east africa to kind of offshore their manufacture even further

Yup, manufacturing will move from China to Africa, and it'll be China reaping the benefits.

Ethiopia beckons: https://news.ycombinator.com/item?id=17118342

There is no regional loyalty when dealing with Industrial Profit growth.

There is no loyalty when dealing with profit.

Emphatic agreement about East Africa. Exciting times...

Ya, and now it’s the smaller locals that are thriving while the big booksellers are struggling.

Makes me want to rewatch “you got mail” again.

Someone needs to update this Onion article about the relaunch and subsequent success of local indie darling The Shop Around the Corner:

https://entertainment.theonion.com/fox-books-files-for-bankr...

The bottom line is that it's not possible to compete on price with Amazon. Amazon does not need to operate storefronts (although ironically it is starting to open them), has a massive selection, and offers very fast shipping.

Amazon also does not need to deal with shoplifting, which is a huge problem for bookstores. I worked at a Border's Books back in college and it was just amazing how many DVDs were stolen. People would fill backpacks with them.

The only way to outcompete Amazon is by becoming a niche player, not by becoming a worse version of Amazon, which is the outcome of the Barnes and Noble strategy.

Amazon also does not need to deal with shoplifting

They do, but they call it "package theft".

And those Amazon stores, ironically, are hyper-localized. The one in San Jose has a bunch of "popular in your area" and "highly rated in your area" shelves, and I'm guessing other purchasing decisions are influenced heavily by other local data they have available. B&N aren't just playing against Amazon's supply chain but also their insane data collection.

Ironically the Amazon store in Santana Row is across the street from a former Border's location that closed years ago.

We've been trying to make all the purchases we can from our local B&N store to try to keep them open as long as possible.

It's a small effort but if everyone does this maybe it will make a difference.

I love going by our local B&N to look at books, games and legos.

Hopefully they can fight this out and stay open.

Just curious. Why choose B&N over a local bookstore?

In many places I'd guess B&N is the only option. Having a chain bookstore is significantly better than having no bookstore.

y, we don't have a local non-chain bookstore here. We do try to purchase from local speciality stores if we can. There are a few board game/comic shops around.

I'm kind of surprised that they say they are still struggling. B&N in my area is one of the few chain stores I go to where I am actually interested in their inventory and often but things. I agree that the Nook seemed weird as it was a lesser device to the Kindle at launch and never really differentiated. The fact that they are my go-to shop for interesting gifts is an easy choice. They are one of the few places I can reliably buy interesting Lego and other fun junk. It's usually better selection and selection that seems to rotate inventory than a target and walmart where the experience is static and feels like it hasn't changed in a decade.

Do I buy books there? No, they usually struggle to have anything that meets my interests or are appropriate for my level of expertise. But the fun junk? It's my first stop as it doesn't have the home and house thing like a homegoods or pier 1 style place or an accessory or clothing store. They have a place in the neighborhood marketplace but I am wondering if the square footage is too high per store to make a meaningful conversion. Americans really don't like empty stores and empty shelves even if they have no interest in buying what's on it ever. Once I saw them going the mid-upscale gift shop route I felt they nailed it.

I always enjoyed going to B&N to drink a coffee and read a magazine and have thought that they should do something to capitalize on this. I wouldn't mind being able to rent or check out magazines while I drink coffee, then give them back when I leave.

I'm not sure if they can even turn a profit on this though.

You invented a library. This is what a library is. Visit your local library.

My local libraries don't have cafes. And my local coffee shops don't have good reading material.

I've been to libraries with cafes in them.

Alternatively, I've also been to urban libraries where cafes were within walking distance of the library. Less than a block even, closer than a bus stop.

Borrow a book and take it to the coffee shop. Or request a coffee shop be put in your library. Or bring some coffee with you.

Ask your library if they've considered a cafe. I suspect that your local library board would be quite happy to have someone interested come to their board meetings, and I guarantee that cafes and other ways to increase patronage our regular topic for anyone involved in libraries.

In my experience a bookstore has a much more relevant selection of books than the local library.

Commercial spaces offer a much better experience than libraries.

Better hours. Cleaner. Near other amenities.

Seems like something that can be fixed with better funding, better staffing, and more locations.

Can I have a library that kicks out homeless junkies?

No, because the library is just as much for them as it is for you. The best way to remove "homeless junkies" from your community is to help house and rehabilitate them.

You can’t rehabitate someone who doesn’t want to rehabilitate himself. The simple but politically incorrect fact is that the presence of these people makes public spaces dirtier, less inviting, and less safe for the rest of us. Saying the public library is just as much for me as it is for Fenatyl Joe is like saying the underside of the interstate is just as much for me as it is for Fenatyl Joe.

Small town libraries are lovely. Urban libraries in places that don’t have an uncontrolled vagrancy epidemic are probably fine, too. In cities like Seattle and SF, exclusive, commercial spaces are significantly more inviting than public spaces.

Ok, well then don't be surprised when we don't use the library, and instead use a cleaner, better comercial space.

Libraries are public safe space. Get over it.

Safe for who? I'm friends with a number of librarians in my city, and every single one of them has been verbally harassed by patrons and more than half of them have been physically assaulted. It's not always by people with mental health issues but unfortunately it usually is.

(Nannies are particularly nasty when it comes to verbal abuse, I'm told. Sometimes they get barred for a while, usually they don't.)

Homelessness and mental illness are real, hard problems that have been rehashed to death here and elsewhere and I'm not even going to pretend to suggest that I have an answer. But I do know that the answer is not "Hope your MLS degree prepared you to deal with a guy literally taking s shit on the circulation desk while screaming at you for being a godless cunt dyke whore."

Guess what? An MLS degree does not train you to deal with that. Librarians are not professional mental health care providers or social workers. Dumping your city's homeless population on them because you are unable and unwilling to deal with the problem and saying "get over it" is irresponsible both to the librarians and the communities that they serve.

I spent a lot of time in libraries as a kid and there was more than one pedophile in my local branch trying to groom me...even some who followed me home to know where I lived. I didn't realize the seriousness of the situation until I was older, but I was definitely in an extremely unsafe situation.

That's not a situation that we should be accepting of, just because the library should be for everyone. If can't be a public safe space if it isn't _safe_.

and pedos.

Nook includes free reading of books while at stores, not sure if that covers magazines btut i'll try on my tablet next time i'm there.

The second web site I ever built (and then sold) was built in a B&N cafe.

Smaller stores in higher traffic areas, a few bigger stores that serve a larger suburban metro, and they need some exclusives and maybe a paid membership program.

What should B&N do???

Support the efforts of reading epub's in browsers, get rid of "an app for that" and simply have Edge/Chrome/Firefox be your front end for reading as well as a limited selection of nook branded tablet devices included 1-2 7" tablets and 1-2 paper white devices. your part time sales can't be good at selling 4-5 different devices you have now. Make your ebooks universally readable without the expense of "an app for that". Have a simple discovery service that is http so it works on anythimg/everything as store front.

work with indy publishers and such to fast-track publication of books to nook devices - promotion at stores, promotion on wifi login - allow people to buy this space and self-service taking advantage of online and offline premium presence.

maybe ditch printed magazines entirely and push electronic delivery and have ipads or samsung galaxies at stores with read at store capability and a simple way to buy and subscribe and deliver - save the retail/stocking space of magaines - maybe even offer something like "subscribe to 5 magazines, get 7" nook for free" - offer this approach to bloggers who write good blogs/online magazines so you can help indy publishers and indy content.

Make the B&N discount program universal - apply to all purchases at B&N - jack up the price if need be.

Follow amazon's footprints - if you're a B&N member have consistent pricing online & offline - monopolize on 600+ locations. Who cares if they buy on or offline, make pricing the same.

keep the cafe's up and the service up. Make sure wifi doesn't suck ass like it does at a lot of stores supplied by shitty ATT service. Just like you allow Nooks to read at the store, allow anyone with a browser to read at the store. Instead of copying the mile long receipts of CVS, use wifi login to make it stupid easy to purchase/have a coupon or funnel customers to an experience that builds a sales funnel.

Fix the "pickup at store" to be stupid easy rather than painful process.

Work with favor or city delivery services to offer B&N "now" in major cities for ~ 2-hour delivery service and use this to incentivize purchasing and sales funnel - no need to do your own delivery, capitalize on other services. Offer this as a discount to B&N members so they choose you for fast books even if they can't make it to a store or don't want 3-5 day delivery from website.

Update the 7" nook asap - keep using android, make it known it can use any ebook service out there too even if its not yours - add 512MB of ram (1.5gb total or so), increase CPU speed slightly - fix the local storage to be faster and 16gb - the current 8gb model requires massive nerding to be useful by any means - if your customer is older people who read tons of books - make it stupid easy for them to do so with nook / B&N branding all over the place - even if they're reading google books or amazon books or microsoft books - having a Nook that can easily read all of that means you own the fucking start page to reading. Hell, hack the price up to 69 bucks to make the 7" nook just that much better - if you had iterated on it i'm sure the nook experience would be killing it rather than festering.

help monetize podcasts - just like blog/magazine content above - use your branded nook devices to offer a simple channel - it can't cost much to acquire and develop a simple solution that could be built into a web service and branded on nook devices. allow podcasters to join in with monetization to allow you to fill these with pre-roll commercials or "supported by" and allow others to buy these spots just like web presence, end caps. learn to grow your digital market not just in commissions but in creating a person two person market - get out of the way of defining the product but allow people to create products that you have experiences to sell.

hire me. :)

More than beefing up their current small tablet lineup I'd love to see a well-supported large screen reading device. I know I can get a 10 inch tablet from whoever, but a decent e- ink option would be an amazing thing for both large format books and aging populations.

Reply on news.ycombinator.com