{"id":23402,"date":"2017-11-15T02:17:23","date_gmt":"2017-11-15T07:17:23","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/dear-barnes-noble-stop-playing-catch-up\/"},"modified":"2017-11-15T02:22:24","modified_gmt":"2017-11-15T07:22:24","slug":"dear-barnes-noble-stop-playing-catch-up","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/dear-barnes-noble-stop-playing-catch-up\/","title":{"rendered":"Dear Barnes & Noble: Stop Playing Catch-Up!"},"content":{"rendered":"

Digitalization is not lost on the priorities list of Barnes & Noble (B&N) executives; they can see the effects over the last 2 decades by looking at the company financial statements1<\/sup>. They have seen what has happened to Borders Group and scooped up some of its remains that fell by the wayside2<\/sup>. The word \u201cdigital\u201d is found 72 times in the 2017 annual report1<\/sup>\u2014the focus is there, but so far nothing has stopped the bleeding entirely. Their response has been understandable but predictable\u2014cost-cutting, hiring a Chief Digital Officer (Fred Argir)3<\/sup>, trying their hand at an e-reader4<\/sup>, redesigning their web page5<\/sup>, running through CEOs etc6<\/sup>. In all of this, B&N\u2019s efforts have failed to use digital innovations and explore how the consumer can be brought along to establish new in-store habits.<\/p>\n

Fundamentally, there is a mismatch in digital between consumer expectations, current technological offerings, and what a given company like B&N delivers. Brand executives talk the talk of digital transformation, but often fall short on execution. A cluster of high performing companies have found success by prioritizing customer experience as a mindset7<\/sup>. In contrast to such successes, failure to adapt to customer expectations results in a decrease in brand loyalty and diminishing sales. Worse still is heavily investing in advanced technologies that consumers don\u2019t want. Given the complex but ever-prevalent landscape B&N is navigating in being pitted against a tech company while clinging on to brick and mortar, some of B&N\u2019s efforts have played missed the consumer mark8<\/sup>.<\/p>\n

Currently, Fred Argir has boldly said that he doesn\u2019t care what Amazon is doing. He said at Digital Book World Conference, \u201cMy win percentage on predicting what Amazon is going to do is very low. They\u2019re going to do whatever they want to do.\u201d9<\/sup> B&N doesn\u2019t consider itself to be a tech company10<\/sup>, but does recognize the importance of digital. Fine\u2014but it\u2019s going to take more than incremental changes such as website redesigns to win market share back. Argir\u2019s answer, in conjunction with input from the new CEO, Demos Parneros, is trying to come up with creative ideas to invigorate the in-store experience. Parneros stated, \u201cour stores are really much more about discovery and spending time walking through stores.\u201d11<\/sup><\/p>\n

During the 2017 Summer, B&N launched the “B&N Podcast”, which is aimed at connecting readers with author\u2019s sentiments on writing, their creative process, and what inspires their writing12<\/sup>. This seems a little late in the game, but is nevertheless a good tool to employ in trying to capture more customer purchases and enhance the B&N brand. To really gain any momentum, this needs to be combined with more far-reaching efforts to garner customers through digital means and match B&N’s offerings with customer expectations13<\/sup>.<\/p>\n

Ultimately, B&N does not need to be Amazon; however, it should cultivate Amazon\u2019s mentality of removing the friction in the in-store experience to make it enjoyable, seamless, and valuable in a way that Amazon cannot provide online. A portion of B&N\u2019s recent efforts have been around creating an environment where people can relax, read and eat, but to complete the experience, building the capability for members to walk out of the store, book in hand, and be automatically charged would be an easy habit for consumers to cultivate. Furthermore, to reduce friction in its audiobook business, B&N stores could have phone setup kiosks to get the apps people need and\/or download in-store trials for customers to start. This could also be positioned as a gift opportunity for parents and grandparents willing to use audiobooks, but wary of the technology. To match this throughout the store, as a customer walks around, select books could have display stands with codes for people to scan to be able to listen to books as they continue wandering the aisles. There are many ways to implement these suggestions, but it will come down to how the customer responds and is brought along to establish these kinds of habits to boost sales. The lower the friction and the pain point of adopting these digital delivery systems, the quicker the adoption rate, and the more it will proliferate. The iterative process that will ensue will help them stay in touch with consumers and keep up with their changing preferences.<\/p>\n

Going forward, B&N will have to address some looming challenges. With Amazon coming into the brick and mortar scene in a technological fashion, how can B&N respond to retain its presence and remain unique? With consumer preferences being so liquid or fickle, how can B&N best build up its capabilities to stay informed and act quickly? How can B&N take advantage of the continued adoption of e-books and technology in education?<\/p>\n

(775 words)<\/p>\n

1<\/sup>Barnes & Noble, 2017 Annual Report (New York: Barnes & Noble, 2017), p. 4<\/p>\n

2<\/sup>Galen Moore, \u201cWill Barnes & Noble do business as Borders,\u201d Boston Business Journal<\/em>, October 3, 2011, https:\/\/www.bizjournals.com\/boston\/news\/2011\/10\/03\/will-barnes-noble-dba-borders.html<\/a>, accessed November 2017.<\/p>\n

3<\/sup>\u201dShould Traditional Businesses in Digital Trouble Look to CDOs for Help,\u201d Centric Digital<\/em>, July 27, 2015, https:\/\/centricdigital.com\/blog\/digital-strategy\/barnes-and-noble-cdo\/<\/a>, accessed November 2017.<\/p>\n

4<\/sup>John Kell, \u201cB&N Enters Hot Market With Its Nook Tablet,\u201d The Wall Street Journal Asia<\/em>, November 8, 2011.<\/p>\n

5<\/sup>Natalie Gagliordi, \u201cBarnes & Noble Looks to Boost Sales With Revamped Website,\u201d ZDnet, http:\/\/www.zdnet.com\/article\/barnes-noble-looks-to-boost-sales-with-revamped-website\/<\/a>, accessed November 2017.<\/em><\/p>\n

6<\/sup>\u201dBarnes & Noble Announces CEO Departure,\u201d Barnes & Noble press release (New York, NY, August 16, 2016).<\/p>\n

Phil Wahba, \u201cBarnes & Noble Names a New CEO, Again,\u201d Fortune<\/em>, April 27, 2017, http:\/\/fortune.com\/2017\/04\/27\/barnes-noble-ceo-2\/<\/a>, Accessed November 2017.<\/p>\n

7<\/sup>Anatoly Roytman, \u201cExpectations Vs. Experience: The Good, The Bad, The Opportunity,\u201d Accenture<\/em>, https:\/\/www.accenture.com\/us-en\/insight-expectations-vs-experience-good-bad-opportunity<\/a>, accessed November 2017.<\/p>\n

8<\/sup>James Manyika, Gary Pinkus, and Sree Ramaswamy, \u201cThe Most Digital Companies Are Leaving All the Rest Behind,\u201d 性视界 Business Review<\/em>, January 21, 2016https:\/\/hbr.org\/2016\/01\/the-most-digital-companies-are-leaving-all-the-rest-behind<\/a>, accessed November 2017.<\/p>\n

9<\/sup>Michael Kozlowski, \u201cBarnes and Noble CEO Doesn\u2019t Care About Amazon,\u201d Good <\/em>Ereader, March 15, 2016, https:\/\/goodereader.com\/blog\/electronic-readers\/barnes-and-noble-cdo-doesnt-care-about-amazon<\/a>, accessed November 2017.<\/p>\n

10<\/sup>Joe Keenan, \u201cInside Barnes & Noble\u2019s Digital Transformation,\u201d TotalRetail<\/em>, March 1, 2017, http:\/\/www.mytotalretail.com\/article\/inside-barnes-nobles-digital-transformation\/<\/a>, accessed November 2017.<\/p>\n

11<\/sup>Phil Wahba, \u201cBarnes & Noble Is Falling Further Behind Amazon,\u201d Fortune<\/em>, September 7, 2017, http:\/\/fortune.com\/2017\/09\/07\/barnes-noble-books\/<\/a>, accessed November 2017.<\/p>\n

12<\/sup>\u201cBarnes & Noble Launches \u2018The B&N Podcast,\u2019\u201d Barnes & Noble press release (New York, NY, August 16, 2017).<\/p>\n

13<\/sup>Edwin van Bommel, David Edelman, and Kelly Ungerman, \u201cDigitizing the Customer Decision Journey,\u201d McKinsey<\/em>, June 2014, https:\/\/www.mckinsey.com\/business-functions\/marketing-and-sales\/our-insights\/digitizing-the-consumer-decision-journey<\/a>, accessed November 2017.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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