Making B&N Number One

As we know, the two ebooktailer giant in the United States are Barnes & Noble and Amazon. And, as we know, Amazon is currently the number 1 ebooktailer. But there is no reason why B&N, with a bit of shrewdness, can’t move closer to or takeover the number 1 position. I’m prepared to make one suggestion along this path.

Currently, B&N is trying to get people who do not currently own a dedicated ereader to buy a Nook. Why not work on getting people who already own a dedicated device — e.g., a Kobo, Sony, or Kindle or other brand — to move to the Nook? Why not offer a trade-in:

Bring us your working device and we’ll exchange it for a brand new nook! Want the Nook Color, you can have it for your working device plus $75. In addition, we’ll give you a $50 B&N gift certificate for buying ebooks.

I’ll admit that the offer wouldn’t tempt me considering the current state of the Nook as compared to my Sony 950, but I think it would tempt a lot of current owners of other brands. And B&N could make back some of its loss by eBaying the working exchanged devices.

The name of the game is not device owners but getting people to buy ebooks. The device is essentially a one-time sale. Most people buy the device and won’t consider buying an upgrade or newer device for several years, if not longer. In my case, I used my Sony 505 for 3 years before buying the 950 and if I had know that my wife was going to ultimately decide that she still wanted the print version of the New York Times, I would still be using my Sony 505 and would not have bought the 950. I upgraded for a specific reason that turned out to be a failed experiment.

And when I look at what other ebookers list as their device, I note that many ebookers are still using the even older Sony 500 and Kindle 1. There isn’t a groundswell that compels the average ebooker to upgrade the device. After all, the Kindle 1 and the Sony 505 still perform the function for which they were designed — enabling the user to pleasurably read ebooks.

Consequently, with the exception of the cadre who must have the latest and greatest technology, the device is not a revenue generator. Rather, it is ebooks that are the revenue generators and what both B&N and Amazon need to do is get device owners to regularly buy ebooks from their ebookstores. Thus, although exchanging other devices for the Nook would mean taking a one-time hit to the financials, if B&N got its act together, it could turn the person who buys 1 or 2 ebooks a year, or who only “buys” the free ebooks, to buy (for dollars) 10 to 12 ebooks a year.

Of course, should B&N try this it would have to be prepared for the tit-for-tat comeback by Amazon, offering an even better deal for people who exchanged their non-Kindle devices for a Kindle. To my mind, the only defense that B&N would have would be if it came up with superior customer service, aggressive marketing, and — before embarking on an exchange program — a better device.

It isn’t that the Kindle is a better device than the Nook; it is that people believe it is. Neither device is particularly well designed and both can stand some significant improvement, but B&N needs to convince users that everything about B&N is a better ebook experience than can be had at Amazon. B&N can begin by improving its customer service and the Nook. But the real ace in the hole for B&N is its bricks-and-mortar stores.

Some creative thinking about how the b&m stores fit with the Nook experience could let B&N pull rapidly ahead of Amazon in the ebook game. Here’s one thing I would do if I were in charge:

Come into the b&m store with your Nook. Browse our shelves for a book. Bring the pbook and your Nook to the special Nook counter and you can buy the ebook version at 15% off the current ebook price. And if you want to buy both the ebook and the pbook, you’ll get the 15% off the ebook and an additional 15% off the pbook price. (For B&N members this would be in addition to their member discount. Not a B&N member? Join on the spot and get the member discount plus the 15% discount.) And as long as you are here buying a book, have a coffee on us.

I would also have special sale events, worked out with publishers, that are only available in store, such as enabling a customer to obtain the first ebook in a series free if they buy the second and third together.

And why not have special Senior Citizen Nights. If you are a senior citizen, you can learn — one-on-one — how to operate your Nook and while learning how to use it (overcoming the technophobia that is often seen in seniors), we have special discounts for you, and even special subscription deals. OK, I know you are itching to hear more about this idea, so here goes:

If I were B&N’s chairman, I would be calling all of the major publishers, notably the big 6, and try to convince them to offer a special subscription to seniors. For $x per month you can “borrow” any new release for up to 3 weeks. If you haven’t finished it in 3 weeks, you can borrow it again until you do as long as you are a current subscriber. Finish the book in 1 week? Then borrow another book. The subscription fee is for 1 month for 1 device for an unlimited number of books — just 1 at a time — but you can’t keep or lend the book. Essentially it is librarying books for senior citizens with B&N and the publisher each getting a cut.

Even if you don’t like any of these ideas, the point is that B&N needs to turn its b&m stores into an advantage in the ebook world and it needs to increase the number of Nook owners and users. I’m certainly open to suggestions, and based on what I read about B&N, it should be open to suggestions.

reposted with permission from An American Editor

7 Comments on Making B&N Number One

  1. The nook color easily blows away any other eBook reader especially once rooted. It’s a full android tablet which in my opinion is much preferable to the iPad (lighter, easily pocketed, very nice). My take:
    -Add apps, especially maps and a comic book reader.
    -Setup a “Genius Bar”-equivalent at each store
    -Make a nook-lite app that reqires less RAM and runs on Android 1.6 and greater.

  2. Wow. This posting seems to have come from some other universe.

    B&N is selling NOOKs and NOOKcolors as fast as they can make them. Which leads to the problem that B&N is incapable of handling the quantity of devices they’ve already sold. Selling *more* is just short of impossible, and dealing with more seems to be (for B&N).

    This one left me ROFL: “B&N needs to convince users that everything about B&N is a better ebook experience than can be had at Amazon.” In the absence of a Steve Jobs reality distortion field, that’s not going to happen. B&N’s ebook-buying experience ranges between “quirky” and “total disaster”. A redesign of last year made it even worse, so B&N isn’t catching up — Amazon’s pulling away.

    The various suggestions for ebook discounting seem to ignore the Agency Model. Also, any discount B&N offered, Amazon would offer, too. Amazon has the advantage of being able to lose money on ebooks all year long, and make it up on TVs and cameras. B&N can’t.

    What B&N needs to do is to get its act together.

    B&N needs to make NOOKs and NOOKcolors that work, right out of the box, with every Wi-Fi network out there. Make the NOOKs and NOOKcolors do everything that’s been claimed for them. Make features like notes, bookmarks, PDF reading, etc., usable. Fix the bugs in NOOK and NOOKcolor.

    B&N needs to make a usable site, and provide enough server power that it stays up 24/7, even on Christmas Day when a half-million people find NOOKs under their Christmas tree. They need to create a Customer Service operation that’s available 24/7, even on Christmas Day, with plenty of knowledgeable staff.

    B&N needs to rethink some of its ebook policies. Amazon offers ebook returns within 7 days, but with B&N it’s strictly no returns. B&N provides gifting of individual ebooks, B&N doesn’t.

    B&N needs to start thinking internationally. Amazon is available in many countries around the world, while B&N is US-only. As other countries discover ebooks, B&N is going to be left further behind.

    B&N already has features in NOOK to get people into the stores. Unfortunately, many of the stores just drive NOOK owners right back out again. The stores are in the business of selling books and NOOKs. The stores get *nothing* from ebook sales.

    B&N’s membership program specifically excludes NOOKs, ebooks, and anything related. Most NOOK owners drop their B&N memberships, and B&N doesn’t seem to care.

    B&N doesn’t have the people nor the money to address all of these problems. I’m not sure they have the interest to address those problems. They’re selling all the NOOKs they can make, and selling all the ebooks their poor little server farm can serve up. There’s no room for growth. Their big problem right now is figuring out how to bill for all of those ebooks they’ve already sold — their billing system is incapable of handling the current sales load.

    • Oops. This didn’t come out right: “B&N provides gifting of individual ebooks, B&N doesn’t.” I obviously(?) meant, “AMAZON provides gifting of individual ebooks, B&N doesn’t.”

  3. Interesting suggestions but I’ve seen most of these before. Borders had a big lead by selling the Sony Reader and pissed away a two-year head start on B&N. The trade-in thing is something Sony did recently. Now, they’ve just cutting the damn price of the Sony Pocket by $50 and not bothering with the trade-in hassles.

  4. B&N could offer ebooks in Adobe epub format for the non-Nook owners.

    Also, offer small discounts on the non-agency books as does Kobo.

  5. Fbone: B&N currently has over 100 non-agency e-books, including some fairly big names, on sale for $5. But so do Amazon and Borders. There’s no competitive advantage to be gained there.

    B&N can *never* win on pricing. As I noted, Amazon can afford to sell e-books at a loss for as long as they want, because they’ll make it up on refrigerators and jewelry. B&N can’t afford to, because they don’t sell refrigerators and jewelry.

    B&N has never advertised their $5 e-book sale, even though it’s been running since Christmas. My guess is that’s because they can’t afford to sell too many e-books at that price.

  6. There’s a pretty obvious reason why companies are not targeting people who already own an ereader and buy ebooks: because if they gave up their previous ereader, they would lose access to their previously bought books. (This doesn’t apply in the case of an iOs or Android device). People who actually buy ebooks, as opposed to getting free books or library books, have a lot of incentive not to switch ereaders.

    Also, the regular Nook is currently technically inferior to the Kindle and the Sony Reader, because of the screen and battery life. Now that they have a bona fide LCD reader, they should make the regular Nook, IMHO, more like the Sony reader, with a touchscreen, and not with that battery-sapping mini-screen.

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