The REAL Reason Barnes & Noble is Failing

My esteemed editor, Dan, posed a question today, after processing B&N’s recent holiday sales stats: Why IS Barnes & Noble failing so badly? After reading their Christmas-season sales numbers, nobody can deny that their sales are not what they could be? Why?

With all due respect to Dan, who I think is a fabulous guy, I think the answer is a lot more straightforward than he might think. It’s not about sales metrics, or marketing techniques, or any complicated analysis I think he was seeking. The answer is simple: It’s because the world has more non-Americans than Americans, and Barnes & Noble has always been curiously hostile to the non-American.

I know that B&N, at last, launched a UK store last year. So, that’s … two countries they sell to now? Not to minimize the importance of my friends across the pond by any means, but that’s still a tiny fraction of the market. And it’s not just the e-books, either. They won’t even let you register a device with them—even if you swear not to try and buy books for it—unless you register an American credit card and an American address with them.

Think about that for a second. I, like many Canadians, live less than two hours from the U.S. border. The Beloved and I enjoy a little jaunt to Niagara Falls once in awhile. I think we went three times last year. And you know what? The folks on the American side were happy to see us. There was no pesky exchange rate to worry about; we have credit cards. And the Americans were more than pleased to accept them. We went out for breakfast. We bought T-shirts and shoes and video games. I bought a very nice cupcake at an adorable little shop on our way home. We had a grand ol’ time. And nobody ever suggested to us that we couldn’t wear the shoes again once we were back in Canada. Nobody ever told us we had to be American to eat the cupcakes…

Now, compare that to the Barnes & Noble experience. They are losing my business on two fronts. First, there is the loss leader issue—Amazon has all but admitted that it sells the Kindle pretty much at cost, because the company know that once you have one, you’ll want to buy books for it. Barnes & Noble has closed off that channel. Though even if I did want to live with that and side-load forever, I’d still find features locked out to me, because B&N won’t even let you run the machine unless you have that all-important U.S. (or UK) billing address.

And then they closed the Fictionwise store. My American sister had the option of transfering her books over to a Barnes & Noble account, and as a happy side effect, they even offered to convert them all to EPUB for her. She had some clunky PDB-format stuff that is now shiny new EPUB. And me—I’ve bought four times as many books as she has, and I get nothing but an email telling me to download and back up all my books by a certain date before I lose access to them forever.

And you’re wondering why they’re failing? Could it possibly be any clearer?

When I wrote a few weeks ago about looking ahead to 2013, I predicted that this is finally going to be the year the international e-book market matures to its full potential. I think B&N’s abysmal holiday sales numbers prove my point. The book market is already a threatened one. It’s competing with music, movies, apps, video games. People have more entertainment options than ever before, and a good chunk of it can be accessed from their phones, tablets and computers. The last thing a threatened market needs to be doing is turning away people with credit cards and itchy ‘buy now’ fingers.

I guess the one good thing about B&N’s reluctance to take my money is that I have more of it to spend with other vendors. Anyone want to recommend a nice brunch place in Buffalo that would be happy to sell a nice breakfast to two lovely Canucks and their credit cards?

27 Comments on The REAL Reason Barnes & Noble is Failing

  1. Just copied from Kindle Fire HD sales copy: “To purchase, download, or stream movies and TV shows, you must be physically present in the U.S. and have a U.S. billing address.” The pesky territorial limitation troubling Canadians is therefore not unique to B-N.

  2. B&N has the worst customer service (on line and phone) of anyone anywhere. Customer service is a business fundamental and the executives at this company have given their CS agents no way to help or retain customers. Look at any company that is failing and you will see the same pattern. No customer service means no business.

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