Betamax. Zune. Google Plus. These are just a few consumer technology applications that hit the market with a lot of hype and all failed to catch on for the same basic reason. It seems clear that the Barnes & Noble Nook e-reader tablet can now be considered part of this list, although Barnes & Noble has not yet accepted it.
The reason technologies like Nook and Zune failed to engage the consumer marketplace is that a competing device monopolized the space. VHS, iPod and Facebook did not leave enough room for Betamax, Zune and Google Plus, and the Amazon Kindle has become the de facto e-reading device for mainstream consumers. This type of market domination occurs for a whole host of reasons that rarely reflect upon the quality of the technology being squeezed out (Betamax in particular is generally seen as superior to VHS), but nonetheless makes competition futile.
Time to bid e-readers adieu
Barnes & Noble has partially recognized the difficulty Nook is having competing with Kindle by announcing plans to spin Nook off a separate company, but would be better served by accepting reality and exiting the e-reader market altogether. This would be the first of several IT-related steps Barnes & Noble should take to turn things around. Two other steps include:
Accept Amazon’s e-book dominance
Barnes & Noble’s insistence on hanging on to the Nook is part of a larger attempt to try to capture a larger share of the e-book market from Amazon.com. It won’t happen. Barnes & Noble can stay in the e-book space, but needs to realize that its future success does not hinge on e-book sales or even digital sales of physical books.
Rather than trying to beat Amazon at a game Amazon invented and continues to perfect, Barnes & Noble should refocus on its own game, serving the needs of dedicated readers who enjoy the physical experience of browsing and buying physical books. This is a shrinking but still vital market, and while Barnes & Noble may need to look at consolidating or closing stores, customers who find the Amazon experience dissatisfying are still its best hope. Better serving them will require Barnes & Noble to…
Refine and localize assortments
Amazon can only present a limited number of books to each site visitor, and despite advanced personalization cannot satisfy the needs of a browser who prefers to handle and examine a large number of books. Barnes & Noble can make its hands-on browsing experience more appealing by using advanced assortment planning systems to focus more on regional authors, books about local history, and other works of specific area interest. The retailer should also broaden its assortment to include more small press, older and “cult classic” books that are not typically promoted by Amazon but have positive social and online reader reviews and commentary.
Barnes & Noble is already doing some things to leverage its physical store advantage, such as offering in-store pickup of online purchases and in-store kiosks that simplify searches and increase access to inventory. But by recognizing the turf Amazon has already won and using analytics to improve its in-store assortments, Barnes & Noble can avoid the fate of Borders and win at its own game.