Ways to Save Barnes & Noble
theamericanconservative.com
theamericanconservative.com
Perhaps the real question is not how to save Barnes and Noble, but rather why anyone wants to save them at all. I find it hard to see them cast as Meg Ryan opposite Amazonian Tom Hanks in the re-re-make of You've Got Mail.
B&N were once fans of market forces, and the public's insatiable hunger for lower prices at any cost. Unfortunately, their discovering that economies Of scale are only on your side until someone else comes along who does it better.
B&N are fundamentally Unsaveable. They contain neither the charm of the shop around the corner, nor the value of Amazon. I for one will shed no tears at the demise of this corporate monster.
I really enjoy stopping by once in a while and checking out what computer books are on the shelf. Sure, I can "see" them on Amazon, but with minimal effort I can flip through the pages and read bits and pieces. I am obviously guilty of going home and buying it on Amazon, because the markup is just too much to ignore. I'll miss them, but I agree that they're unsaveable in their current form.
It's kind of a crappy situation, but it's one that we've put ourselves in. I'm not confident that we'd see a renaissance of indie booksellers should BN close.
Personally I think that with Nook, BN for various reasons bungled what could easily have been a very successful product. They might still have been able to turn it around by pressuring publishers to sell ebooks for cheaper, removing DRM, and focusing on a true ereading experience and owning a niche instead of competing with full-blown tablets.
Since they've thrown in the towel with Nook, their only hope seems to be dropping prices to give people a reason to walk in instead of going to Amazon, or to make money on ancillary physical experiences, like drinking coffee while browsing. But they already made a possibly fatal mistake in that strategy by renting out space to Starbucks instead of doing their own coffee thing.
BN closing would be a pretty big blow to books in general, regardless of Amazon's sales. While I can't pity the corporation for being affected by market forces, nor can I pity it considering what it's done to indie sellers, neither do I want to see books completely disappearing from the average American's sight.
Why not?
Here's a pretty standard progression:
1. there used to be a bakery a few blocks away--medium-scale, medium-convenience. Six or seven of them in your district.
2. Then a supermarket came. It was just a bit further away than the nearest bakery, but it included a bakery and a bunch of other things. The bakeries went out of business. One supermarket per district was all you needed.
3. But supermarkets aren't something you pop into for an "experience"--you don't visit one on a date. So, someone trimmed down the bakery idea to the most consumer-focused essentials, giving people only what they wanted and none of what they needed (the supermarket covers what they need, after all), and launched... a cupcake shop. Maybe just one to start. But then, suddenly, they're on every street corner.
I could see the "cupcake shop" equivalent to a bookstore: not a big pile of unsorted old tomes, but rather an exquisite presentation for a small, heavily-curated collection of books. A showroom for books, if you will. The clerk would have read everything on sale, and be able to talk at length about all of them. You'd be matched to a book in the same way an Apple Store employee guides you to a piece of consumer electronics. Etc.
1. There was no bakery a few blocks away. Maybe there was in 1850, but not in my lifetime.
2. There were two grocery stores, both of which sucked. one sucked way worse than the other, though.
3. The crap grocery store went out of business.
4. Walmart opened up.
5. A coffee shop, bakery, fro-yo place, hockey arena, sports bar, hair salon, tire store, Dollar Tree, AT&T store, and J.P. Edwards mortgage lending place opened up in a cluster around the new Walmart.
You won't ever see the small bookshop version of this story because for the most part, nobody reads books.
The one thing you might see more of is Bookman's style used book shops next to the Walmart. In low reading zones they will sell other used stuff.
A small, curated, general-purpose bookstore with a knowledgeable clerk will still be just a showroom if people can buy it cheaper on Amazon. Baked goods (and other sorts of things like that) on the other hand vary from store to store, have a built-in expiration date, and lend themselves poorly to shipping by mail.
Maybe a super-niche showroom or specialized bookstore (like antiques or first editions) might be able to turn a hair of a profit, but I suspect not enough to make it more than a labor of love for a retiree owner or some other kind of person not concerned with profit.
The other killer is amazon prime. I'm paying $70 or whatever it is, to get free shipping and no sales tax. Anytime I pay spend a penny at B+M even long after I saved my $70 from amazon, I'm still thinking... I fronted amazon $70 and I need to make it back on free shipping, and its cheaper online anyway, and I won't have time to read it until after two-day shipping anyway... so why go brick and mortar?
The other problem is, I'm pretty well read, interested in certain specialties, and 50% of salespeople are below the median anyway, so a local store is useless to me. I have special ordered books at local bookstores in the distant past; I believe they used USPS media mail and it took about three weeks plus two trips to the store. I already have amazon prime and it takes two days not three weeks. So I'll probably never buy a new book at a B+M book store again, at least not for myself. I don't know if they can survive off gift sales.
There are five interesting options going forward for bookstores:
1) Gift store that happens to sell books.
2) I donno what to call it, but the sales pitch would be "Don't pay for amazon shipping when we can get it next day air no extra charge". Of course the base price would be MSRP not amazon discount, to pay for the logistics.
3) "We print your book on demand in less than 15 minutes while you drink a complimentary coffee and its still hot when we put it in your hands"
4) "We only stock the (insert authority name)'s top 100 titles... but we know all about those 100 titles, and we never run out of copies". AKA the midnight harry potter store, more or less. Also hosts wild midnight release parties.
5) Dead street in a dead town with no customers but the rent is cheap and the owner sees it as a lifestyle business or bragging rights. Also a front for money laundering, seeing as its a cash business. Being a front and a laundry for regional weed distribution is how our local candle store kept in operation a couple years back.
6) "We don't sell books, or make money from customers. Instead, your eyeballs are the product, and we sell chain-wide coverage of recently-released titles (including a guarantee our clerks will read+familiarize themselves with your book) to publishing houses. We want people to come in and read the book for 30 minutes and be itching to buy it on Amazon by the time they leave; that's what the publisher is paying us for."
Sort of neatens up the incentive structure, doesn't it?
(This also means they don't have to have any storage; they only need two or three pristine copies of each book to put on display. And it can even work for books that are otherwise digital-only: the only physical copies are one-offs created solely for display purposes, printed by the author's marketing agency using a service like Lulu and delivered directly to each participating book-gallery. In other words, the "books" become part of the PR kit for a book launch, rather than the goods being sold.)
Back in May, Marc Andreesen and Peter Thiel were hosted by The Economist in a panel on whether or not technology offers us a way out.
While I'm generally not predisposed to agree with Thiel (my view, substantiated by much recent research, is that Libertarianism is grossly flawed), he hit time and time again on points that I've been becoming aware of in recent months:
- That energy use and economic growth are very high correlated. And we're facing an impending shortage of cheap liquid fuels, and eventually of others (as well as environmental concerns over their continued use in any regard).
- That virtually every post-WWII recession was preceded by an oil price spike (the 2nd early 1980 recession seems to be the principle exception).
- That technology is underperforming and is delivering diminishing returns.
- That older technologies: indoor plumbing, cars, phones, trains -- were vastly more profound in their societal impacts.
- That government involvement is a mixed bag. Sometimes it detracts, but often it delivers (rural electrification & phones, highway system, Internet).
- That the tech industry's scale is much smaller than is commonly believed. As Thiel puts it: it wouldn't be able to bail out the US government or even a state, it might be able to bail out San Francisco.
- That we're developing a growing high-tech rust belt, companies such as Cisco, Intel, Oracle, IBM, and Microsoft. Possibly even Apple.
- That post-Google, there really hasn't been a major new player in the tech field (and no, Facebook doesn't count).
- That if you look at the Forbes list of wealthiest people, there are a handful in tech, but most are in highly price-inelastic sectors which do well when the economy is in decline.
- The only recent growth sectors of the economy (1990-2013) have been financial services and tech. And the financial sector looks to be hurting.
I'll toss in a phrase of Andreeson's here: software is eating everything. What finance and tech have in common is that both have been hollowing out other fields. Perhaps this has been providing for greater efficiencies in some cases, but it's also been resulting in weaker structures overall.
None of this changes the situation for B&N, but it does suggest that the company is less the author and more the player of its fate.
The reason I like shopping and buying books there is the sheer selection. Of course, their footprint is much larger than BN. But BN could raise funds to expand their stores slowly and see if it works. Powell's has several floors of books and are probably larger than many large libraries in big cities. Next to each new book they also stock used books of similar or the same titles.
I just really enjoy the act of flipping through an entire book and then buying it on the spot. I don't think paging through the ToC in PDF form a la Amazon is that nice and I hate waiting for shipping. Plus, if on a technical book I'm going to spend $100 then I need to make sure for myself it's a decent reference.
It's been painful to see BN push the Nook. And to see them try to be a coffee shop. And CD store. etc etc. For the size of their store, they have a remarkably small selection of books, and they're all high-priced... and they complain they can't sell many books. Sorry, when I walk in to the store and see 4 crappy books on CSS, 10 on HTML, 5 on Windows, and a smattering of others, I'm not that inspired. But in Powell's technical bookstore, when there's a whole aisle on Javascript, I get excited.
They need to draw people into their stores AND make them spend money. A lot of these tips are just about getting freeloader traffic.
If anyone ever cracks same day delivery, it would align very well with this. Onsite fabrication would align well too.
So while I'm sure B&H could 1:1 match Amazon in prices, with Amazon's economies of scale, and the tax loopholes online retailers get, I highly doubt a B&H store could do it and still be profitable.
So, yes, lower prices. Just give the books away. It will get people through the doors, no doubt, but they'll still go bankrupt.
:)
So the TLDR is a B+M bookstore is fancier and more expensive than a typical amazon warehouse.
I wonder if a "amazon warehouse"-like experience at a cheaper price would be workable for a bookseller. Probably still have some issues with lack of centralization.
Oldest business trick in the book... instead of paying for labor, convince your customers its a privilege to donate their own labor...
If you're telling yourself this sounds ridiculous, think about supermarkets and then consider Sams Club... Turns out lack of marble floor tiles is not much of an issue after all...
Being able to go and get something you want immediately – and happen to not want in eBook form – is worth some small premium, but not at nearly 100% markup vs your own online store.
You know, I am fan of a certain niche sci-fi series. Buying physical books is hell expensive (shipping get outrageous), so I buy e-books!
Except, this niche sci-fi series was only available at Fictionwise to me (it was in B&N, I tried to buy there, it made me fill lots of forms, and then install a local Nook software, and do some other annoying things, and THEN finally it told me they don't sell it outside the US... why the hell it allowed me to register as Brazillian then? fuck you B&N).
Fictionwise was great, it allowed me to get the book in multiple formats, make backups without DRM, and lots of other nifty stuff!
Then comes again B&N to ruin my party, they buy Fictionwise, and send a message stating that all Fictionwise books will only be available in Nook format, and you must download them from the US...
I even went into their FAQ site to be sure...
"Q: If I have a Fictionwise book and a Nook, and I want download it but I live outside the US, what can I do?
A: You can go to the US, then connect in a network there, download your book, and go back home."
OMG FUCK YOU AGAIN B&N!!!!!
By the way, if someone know someone that replaces Fictionwise I would be REALLY HAPPY to know (you know, I still want those books, and I won't visit US only to buy those books...)
And you cannot buy from outside the US even with a proxy (you need proof that you have a house, or a bank account, or something like that in the US).
Further, I'm one of the (rare?) techies who prefers paper books.
If there are enough people who like discovering books (like me), then brick & mortar bookstores have a future.
Amen, and amen, and amen. You'll have to forgive me, I'm not familiar with the local custom. Where I come from, you always say 'Amen' after you hear a prayer. Because that's what you just heard - a prayer. Where I come from, that particular prayer is called 'The Prayer for the Dead.' You just heard The Prayer for the Dead, my fellow stockholders, and you didn't say, 'Amen.' This company is dead. I didn't kill it. Don't blame me. It was dead when I got here. It's too late for prayers. For even if the prayers were answered, and a miracle occurred, and the yen did this, and the dollar did that, and the infrastructure did the other thing, we would still be dead! You know why? Fiber optics. New technologies. Obsolescence. We're dead, alright. We're just not broke. And do you know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow, but sure.
You know, at one time, there must've been dozens of companies making buggy whips. And I'll bet the last company around was the one that made the best god-damn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead. Let's have the intelligence, let's have the decency to sign the death certificate, collect the insurance, and invest in something with a future. 'Ah, but we can't,' goes the prayer. 'We can't because we have responsibility, a responsibility to our employees, to our community. What will happen to them?' I got two words for that - 'Who cares?' Care about them? Why? They didn't care about you. They sucked you dry. You have no responsibility to them. For the last ten years, this company bled your money. Did this community ever say, 'We know times are tough. We'll lower taxes, reduce water and sewer.' Check it out: You're paying twice what you did ten years ago. And our devoted employees, who have taken no increases for the past three years, are still making twice what they made ten years ago. And our stock - one-sixth of what it was ten years ago. 'Who cares?' I'll tell ya -- Me.
I'm not your best friend. I'm your only friend. I don't make anything. I'm makin' you money. And lest we forget, that's the only reason any of you became stockholders in the first place. You wanna make money! You don't care if they manufacture wire and cable, fried chicken, or grow tangerines! You wanna make money! I'm the only friend you've got. I'm makin' you money. Take the money. Invest it somewhere else. Maybe, maybe you'll get lucky and it'll be used productively. And if it is, you'll create new jobs and provide a service for the economy and, God forbid, even make a few bucks for yourselves. And if anybody asks, tell 'em ya gave at the plant. And by the way, it pleases me that I'm called 'Larry the Liquidator.' You know why, fellow stockholders? Because at my funeral, you'll leave with a smile on your face and a few bucks in your pocket. Now that's a funeral worth having!
--
[1] http://www.imdb.com/title/tt0102609/ -- a clip of the speech is currently available at http://www.youtube.com/watch?v=62kxPyNZF3Q
"Expensive used paper retail" aka bookstore has no pivot options not already supersaturated. Coffee shop? Music/Video physical media store? Toy store? "Educational kids stuff" store? Generic department stores? Gift shop? Used book stores? All full marketplaces, or in decline, or both. B+N has been pretty good at picking trendy overdone and declining sectors to expand into. I think they need a in-house residential real estate office and a cupcake shop.
Their only hope seems to be outlandish. So they've got big mall stores... I know, give up on all this "book" stuff and become Tesla Automotive Dealers. Keep the coffee bar, I guess. My local B+N is architecturally beautiful compared to local car dealerships; it could work out well.
Larry's speech is pretty much the opposite of modern crony capitalism's "too big to fail". Its possible the only move left for B+N would be into govt bailout/jobs programs.
The problem with "experience" is it takes up space where books used to be sold. So you end up with a coffee shop, and wifi, with live music, and D+D/Pathfinder RPG get togethers, and author signing visits, an internet cafe, wedding receptions, and dvd sales, and ... where's the books? Had to take them out to make space for the candle shop and onsite child care center... Not much of a bookstore anymore if walmart has a better quantity and selection.
One good rule of thumb is to look up and down small town main street. If you're going to try 50/50 pirate shop and bookstore, you're not going to do better than the actual pirate shop store, and you already know 50% of the model (bookstore) doesn't work. Ditto candles, antique stores, herbal soaps, or chocolate candies... simply listing an inventory of small town shops is mostly going to result in lack of focus on multiple business models. None of which are doing all that well anyway.
On a macro level, since I was a kid, total retail CRE square footage per citizen has roughly doubled, but median consumption patterns haven't kept up making aggregate brick and mortar retail per citizen drop, and the long term trend isn't looking good for retail. There's a lot of stores to close before we get back to long term trend for retail store CRE. It may very well be that nationwide big box booksellers simply don't "work" in a real economy. In a contracting market, aiming at shrinking holes is like picking up pennies in front of a steamroller.
However, it's exactly the other way around.
Amen is actually a Hebrew contraction word that is "Ayl Melech Ne'eman" (AMN) in its lengthened form. What is means is "It is true, and I believe what is being said."
So it albeit true that current US culture thinks of Amen in religious roots, however in Hebrew it is a powerful affirmation of the individual. Frankly, because you believe him/her.
1. Employee pay and retention. Retail always pays shit, but if you want good employees, you have to pay them.
2. Re-zoning continually. B&N spends an inordinate amount of labor re-organizing and shuffling books from one area to the other. This make work makes it hard for customers to find books, makes it hard for associates to know where a book is, and is just shuffling deck chairs.
3. Pricing. BN.com is cheaper than B&N stores. Customers don't understand this, causing huge amounts of irritation. Plus, B&N is just charging too much.
4. Delivery/inventory. Order a book from Amazon, you can have it tomorrow. Order it from B&N or bn.com, and it might take a week. All deliveries are made from central warehouses, instead of leveraging the store's own inventory.
A smart fix for this would be to have the delivery manager able to deliver books from his inventory overnight to the customer. If you're in San Jose, a San Jose B&N would fulfill your order, (assuming the book is in stock), otherwise the closest warehouse or store would. Naturally, Amazon is the exemplar when it comes to order fulfillment, but at least try and close the gap.
Cut some of the deadweight management. A district manager who only shows up in your store once or twice a quarter is of no use to the company. Fire them or make them perform.
The problem is: It's better to get almost anything delivered to you than to spend time and gas going to the store. On top of that the selection is better online.
The pity is that bookstores have obvious attractions other than being a place to buy the fat end of the the very long tail of books. Nobodying is going to go to Sears to meet the washing machine designer, but they will go to B&N to meet an author. Nobody wants live music at the Home depot but at B&N, maybe. Nobody would go to a LAN party or board game night at the hardware store, but B&N?
These might all fail, but B&N could have put up more of a fight: Kindle LAN party? Did they even try?
Dumb.
Yes.
>What a pointless article.
No, you missed the point.
Throw a bunch of random ideas in the air and see what sticks. If B&N fails, you can point to all the ideas they didn't follow and blame the failure on that.
That's all TFA is. Most of the "ideas" are so impractical they wouldn't work for a local mom-n-pop bookstore, let alone a giant chain like B&N. If any of these "experts" spent more than ten minutes on their idea I'll eat my hat.
Most of the developers are at best mediocre. The IT managers are clueless. They reside in the same building as Google and are unable to attract NYC talent.
Every time I see the stock climb above 17 or 18 I have a strong urge to sell it short.
All kidding aside I really do miss the local shops that did not survive. I just don't feel the same about big national bookstores.
The current organization by generic area of study does nothing for gift shopping. I need store categorization by stereotypical demographic group. "wife" or "tween boys" gift section. Maybe broken down by hobby, maybe not. Holiday and "event" selection. So... this is THE place to buy gifts made out of old fashioned ink and paper.
Their biggest problem is lack of selection. Amazon is so much bigger, and about a half of the store floor space is already non-book (toys, board games, videos, CDs, coffee shop...) They may as well give it up and become a gift store for the small segment of the population which is not functionally illiterate. Coincidentally people who are literate tend to hang out with other people who are literate, and are usually in an economic class well above functional illiterates, so its probably a good demographic to market to. They can keep their chocolate bar selection, those are good gifts. Obviously the gift card and wrapping paper racks stay. Maybe old fashioned optical disks should be kept for awhile. The rest of the addon non-book stuff can be junked. Why would I want a coffee bar when I'm shopping for a kids b-day party gift? If you've ever been inside a "hallmark store" imagine that toned down a bit with a selection of "gift books". Bland generic popular inoffensive stuff for gifts; pretty much what they've already got.
Another interesting idea is segmentation. So the general masses of the population have given up on physical trinkets and now go virtual. Selling physical CDs? In 2013? I haven't bought a physical CD at a retail store since the 90s. Well, that's OK. There's always going to be a small segment of the population who want physical stuff (aside from gifts, see above). They might increase profitability by intentionally shrinking, which is stereotypically unthinkable by the "drive it into the ground" types, but might be their best bet. As long as they don't make the big mistake of assuming 1:1 mapping between old people and luddites. The Venn diagram probably looks more like 100% of hoarders are physical buyers. Also probably lots of aspirational buyers; lots of travel guides sold, and "kids summer workbooks" and the like.
So for me, #2 (tables, not shelves) and #7 (community franchising) would make the most sense.