How Barnes and Noble Is Countering New Technology

With book sales sinking nationwide, bookstores have struggled to keep their doors open. From Borders, which filed for bankruptcy in 2011, to other chains such as Waldenbooks and Cokesbury, diminished sales have created an unsustainable atmosphere. Despite an increasingly difficult market and lessened competition, Barnes and Noble is aggressively countering new technology and its effect on the literary market.

Barnes and Noble’s Lower Revenues

As 2013 unfolds, it’s become clear that Barnes and Noble will continue experiencing lower revenue as expected. Much of this is because the chain is failing to meet expectations of their digital units for Nook sales. As Barnes and Noble management discuss quarterly results, establishing a clear strategy to increase digital sales has become the central focus. However, since two of their Nook devices fell short of expectations, digital revenue is expected to be less than $3 billion.

Countering Lower Sales with a Digital Strategy

While mobile and electronic devices continue to shape our society, Barnes and Noble is fighting to keep itself in the forefront by promoting digital sales. For instance, the chain recently cut the number of titles they carry from publishing house Simon & Schuster. Although the move has placed a strain on the retailer-publisher relationship, Barnes and Noble chose this course of action to keep up with consumers who have embraced digital readers.

Despite weakened sales nationwide, certain branches are showing that it’s still possible to maintain financial health regardless of growing concerns. Sales at Barnes and Noble at Vanderbilt, for instance, only declined 1.6 percent year-over-year, compared to 10.3 percent nationally and 26 percent for digital sales.

As a college store, Barnes and Noble at Vanderbilt markets aggressively to college students, who are more likely to purchase digital books and textbooks. Furthermore, the branch also reaches out beyond the college campus and engages the local Nashville community. As all of these marketing efforts culminate, the bookstore at Vanderbilt remains a bright spot for Barnes and Noble nationwide.

Though the Nook is a nice device, Barnes and Noble is competing with reader technologies from Apple and Google. As the market shifts, the chain has to redefine itself not only as a literary leader, but as a technological leader as well. While sales may be disappointing, the chain’s 677 stores nationwide are largely safe. Only 15 highly unprofitable stores are expected to be shut down and replaced with stronger branches and digital strategies.

About the author

CFOGlobalHQ

Click here to add a comment

Leave a comment:


Get FREE Updates & Insights for CFOs, Treasurers & Finance Executives

x

Join Other Senior Finance Professionals - Get Weekly Curated News

x