Barnes & Noble: How to Not Kill Yourself
Stop being a bookseller.
Last month, Fox Corp. unveiled what it termed its “insanely simple” strategy going forward: live events (sports and news). In order to compete against the view-anytime advantage of Netflix, etc., Fox would focus on programming that Netflix couldn’t.[1]
It warms my strategy cockles. First, it’s easy to communicate and deliver. Second, it strikes at the competitor’s weakness.
I see a lot of pitch decks and generally ignore them and just tell the pitcher to build a dating app; their engagement metrics crush everyone short of Disney World. The first step to building any business is engagement (definition variable). Everything is downhill if you can generate engagement.
Oh, you aren’t in the dating app business? Then figure out how the dating app user experience can be ported to your business. People crave contact and authentic interaction. Everyone is sick of social media. Everyone wants to get real.
Your Strengths Are Not Enough
Many years ago I told the Sears c-suite that they shouldn’t compete on price or convenience — they’ll always lose. Rather, Sears needed to refocus on experience, which was both awful (at the time) and a potential advantage, if well cultivated, against which online retailers couldn’t compete. And we know how that turned out.
A lot of strategists make the mistake of thinking that optimal strategy leverages your strengths. It doesn’t. Instead, it targets the competition’s weakness. Of course, you have to be able to execute the plan, but targeting weakness beats leveraging strength.
So how does Barnes and Noble beat Amazon?
First, attack Amazon’s weakness. The ultimate brand extension is building community, and Amazon is terrible at this. Community generates engagement, price leverage and loyalty. Second, recognize that it’s not Amazon that’ll put you out of business; well-funded local libraries will. Our local library just invested millions to build maker spaces and podcasting booths and a petting zoo for pigmy goats. (Ok, not the last one but who knows … they’re going all out to be relevant.)
From that perspective, B&N beats Amazon by assuming its competition is local libraries. B&N has physical space, and people are desperate for physical spaces to meet (bars are just physical spaces to meet; WeWork; libraries today aren’t about book lending but offering physical space to meet). This is a good deal of Starbucks’ function but they are space-limited to pursue this as a primary strategy.
B&N needs a small stage and decent A/V. More tables for people to meet. An app where people can schedule shows (people = authors, local professors, various groups). The app should also allow people to reserve tables (people = tutors, etc). Charge $5/hr to book (mostly for security reasons). Make it a cover charge if you want. Figure out the logistics to reserving tables. I wouldn’t care if the stage is booked for authors or someone giving group lessons on painting or micro-badging courses … who cares? Just pack the house … the books will sell.
(Consider this line from a recent Hollywood Reporter story: Howard Kremer hadn’t heard from his friend and fellow comedian Brody Stevens for a couple of days. They’d both performed at The Pleasure Chest, a West Hollywood sex shop that hosts a monthly gig called “Performance Anxiety” on Tuesdays. A sex shop has a comedy night. Give you any ideas, B&N?)
You’re Not a Bookseller
Stop being the receptacle for publisher marketing plans and start being proactive; be a comedy club or LiveNation. Be the frictionless platform to schedule live national tours for thinkers and debaters and doers. People actually pay to attend live debates. Pay! Give creators a way to directly make money (sell tickets? I don’t know.) Every city in the country has people who write for magazines — give them a place to talk about their work. They’ll do it for free, probably. And if they can get 30 people to show up on a Tuesday night, give them the mic. (The comedy club model.)
QED: Untether yourself from the petrifying publishing industry and be the new American Agora.
You know how much money Disney makes from selling food? Or how much revenue Delta derives from excess baggage fees? Hundreds of millions. Yet no one thinks “I really need an over-priced limp burger” and goes to Disney. No one thinks “I need this luggage full of bricks to go to Omaha.” (Ok, maybe that one had happened.) Point is: how you get people in the door — how you drive engagement — isn’t necessarily the same as how you drive revenue. Stop competing with Amazon. Stop being a bookseller. Be something more.
Make B&N the new town hall and public square — but the physical version. It’s WeWork and MeetUp and a well-funded library and the local pub all in one. People need a place to sit and have a decent conversation with real people. It’s not about selling books and competing on price — it’s about an experience against which Amazon cannot compete.
And none of this should take any more effort than opening an app. (Right now, doing any of that at B&N is either clunky or not possible. Friction = failure.)
Defining the strategy is the easy part. The hard part is committing to it.
Also: make a dating app.
Catalyst for this: “Elliott Management to Buy Barnes & Noble in $475 Million Deal.” Pivot point? Opportunity? Or PE asset drain? https://www.wsj.com/articles/barnes-noble-to-be-acquired-by-elliott-management-for-6-50-a-share-11559906841?mod=hp_lista_pos3
[1] https://nypost.com/2019/05/09/fox-unveils-insanely-simple-business-model-at-investor-day/
