The Barnes & Noble Elephant in the Room at DBW 2013
Digital Book World 2013 was, as always, brimming with possibility, cautious optimism, and the energy of an industry in full-sail transformation.
Within that optimism though, was some troubling data presented by Codex Group CEO Peter Hildick-Smith, which suggested that, despite a shift in reading habits to more electronic devices, there has not been a comparable shift in book discoverability. According to the most recent Codex survey, online selling accounts for 61 percent of book sales, but only 7 percent of discovery. In other words, the physical bookstore showroom continues to play a vital role in readers’ decisions about which book to read next, even if that book is eventually purchased on an electronic device or through an online retailer like Amazon or B&N.com.
The information is especially concerning given the current state of the single largest physical book retailer, Barnes & Noble, whose news so far in 2013 has largely been dominated by poor sales results and impending store closings.
So it was both thought provoking and ironic that Barnes & Noble Vice President of eBooks, Jim Hilt, took the stage for his DBW 2013 presentation to discuss “Selling Everything Every Way” immediately following Hildick-Smith’s presentation.
Hilt gave a compelling talk about B&N’s unique position in the book marketplace with approximately 700 B&N stores, it’s proprietary Nook reading device, and an online store—a combination Hildick-Smith’s discoverability data would also seem to suggest offers a strong opportunity.
What Hilt didn’t mention though, was the current state of the Barnes & Noble business. Same-store sales at B&N were down from a year ago and sales of the Nook tablet fell considerably short of expectations over the holiday, leading some analysts to question the Nook’s long-term viability in the increasing crowded tablet marketplace. Then, just this week, B&N announced to the Wall Street Journal that it intended to close a third of their stores over the next decade—a proactive announcement that openly acknowledges the challenge of managing a fleet of 25,000-35,000 square-feet stores in a book retail era that can no longer support inventory levels of that size—or the rent required to stay there.
“Physical retail works if you protect it,” Hildick-Smith said at the close of his presentation, almost as an aside. “Movie producers do [protect movie theaters]. I would argue publishers are not doing enough to help bookstores.”
As someone who spent a dozen years at Borders struggling with some of the same issues Barnes & Noble faces today, I’m sympathetic to the challenges and ever hopeful that B&N can find a way to navigate through this difficult transition, for the sake of all readers.
But given the current scenario and announcements, we’re all forced to ask: What would the book discovery environment look like without Barnes & Noble? Quite possibly much sooner and more widespread than the decade-long process quoted in the Wall Street Journal article.
In this interview, paidContent reporter Laura Hazard Owen discussed the Barnes & Noble situation, and shared her own opinions about the precarious situation publishers now find themselves, considering a book retail world that does not include Barnes and Noble or Borders.
“The [Barnes & Noble] stores are turning into places where Barnes and Noble has to sell a lot of other products like toys and games and cards and stuff like that and not just books. And independents are great, but a lot of people, the only bookstore they have in their community or near them is a Barnes and Noble and its not like if a Barnes and Noble goes away that a great independent bookstore is going to rise up in its place, so I do worry about them being gone.”