Barnes and NobleCredit: Google ImagesCredit: Google Images

After Borders did a spectacular belly flop, all the industry analysts pointed to Barnes and Nobles as having done everything right to survive the rise of Amazon and the eBook. So what happened in the span of less than 2 years that sees their third-quarter shares posting a loss? And why is everyone saying they are failing when despite that loss, their profits in the areas recognized as “must-haves” for success are growing? Barnes and Noble is quickly becoming a study in how to have everything going for you and then to lose it all because of a small error in planning.

Back when they had it all

Even with Apple and Amazon storming the castles of brick and mortar bookstores with their large inventories, cheap prices and e-Readers; Barnes and Noble held firm. They rolled out the Nook which was brilliantly conceived and tied directly to their store. They began to work to create a “Barnes and Noble” lifestyle complete with in-store cafes and the invitation to come read for a few free hours a day on your Nook. You could even lend your books to other Nook readers after you were done. Add in their continued emphasis on paper books and it looked like when the dust settled it would be Apple, Amazon and Barnes and Noble all fulfilling our reading needs.

So what happened?

Barnes and Nobles began to fail when it made some missteps with handling the Nook OS and entering the tablet market. In 2012, the Nook had become comparable to the Kindle readers in power and ability but by then it was too late. The Nook had gained a reputation as being too limited a device to do what the wonders of a Kindle could do for only 40 or so more dollars. Apple and Amazon both leapt into the tablet market with both feet foreseeing consumer’s tiring of having a different device for everything and they have been proven right.  

Barnes and Noble’s “Johnny-come-lately” approach to bringing in a tablet offering has made them look second rate. On a practical business level, too much of their inventory remained in paper stock. With real estate and the economy bottoming out, paper books have become a luxury for most people and rent and utilities a burden for many businesses. To keep paper books in stock in a brick and mortar store, Barnes and Noble has also had to sacrifice selection. They just don’t have a broad enough range of books to keep customers from wandering over to Amazon.

The coming struggle

In order for Barnes and Noble not to fail completely they will have to rebrand themselves. They are still seen as the “old bookstore” and not a part of a fast paced, information-based culture. They would do well to drop the “Nook” name because reading in an isolated nook is no longer an ideal fantasy. Kindling a fire to burn brightly is, and the more they can find a way to give consumers a way to integrate their lives – rather than offer ways to isolate – the better they will do.

Barnes and Noble is still for the moment a great place to sit, have a cup of coffee, and enjoy a good book, but for those looking for so much more; the times has come and gone.  When the dust settles Apple and  Amazon will have effectively taken Barnes and Nobles place in offering readers so much more for much less.