Thursday, February 25, 2010

Brick and Mortar Giants rush into the digital arena, but can the dinosaurs compete with the deep efficiencies of their new competition?

Mobylives posts a link to a Publisher Weekly article that quotes Barnes and Noble's CEO Steve Ringo as saying that Barnes and Nobles will transition from a brick and mortar bookstore into an "E-commerce retailer," and that his booksellers will become "e-book evangelists."

I posted my thoughts on the possibility of this new Barnes and Nobles, as a comment on Mobylives, and now I am cross posting them here:

I think this is a really bad move for Barnes and Nobles. Not the selling of E-books, but making it the core of their business. They risk loosing focus on their brand and their key business of selling books. Such hubris can be dangerous.

There is also the question about their position as a stable player in the E-book market. There is a lawsuit over their vehicle for this transition, the Nook, by former partner Spring Design. This threatens to derail the Nook in its current incarnation. Spring Design has recently signed a deal with Barnes and Noble competitor Borders to release a more robust but similar e-reader, the Alex. Borders conservative attitude to moving into new forms of retail may have finally paid off.

The e-book market has a huge potential for retailers especially those with the market share to transition large portions of their paper book customers to new e-book readers. But I still wonder if its the right way for to go. I almost feel that moving towards a point of services printing model is the best direction for large chains to go. Training costumers to go online or electronic moves them away from the space of the store and the bookstore experience. That physical presence and experience is the one advantage that Barnes and Nobles and Borders have over established and upstart online sellers which can operate more efficiently, and at a lower cost in the internet and electronic markets then a company with split priorities. Borders and Barnes and Nobles could quickly find themselves flanked on both sides.

We could see a huge revival in independent stores. An Independent store rooted in the community and able to compete with title availability thanks to point of service printing technologies poses a real danger for a large big box retail chain struggling in two markets at once. Unlike the big 3 book retailers, Independent bookstores are already moving to adopt the point of service model with three stores in the Seattle area purchasing new machines. Xerox has also gotten in to the game, which means these machines will most likely get smaller, more reliable, and cheaper.

One thing is for sure, whether large or small the book stores of tomorrow are going to be radically different from the bookstores of today.

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