March 24, 2013

Barnes and Noble: #Omnichannel Struggles

Have you had a chance to read through the most recent 10-Q for Barnes & Noble?  Click here to take a peek.

Barnes and Noble continue to generate a loss - and according to the profit and loss statement, the loss is in the Nook division.

We hear an awful lot about omnichannel, especially from the retail side of the spectrum.  We're told that we have to do the following (at minimum):
  • Align inventory across channels.
  • Align creative strategy across channels.
  • Same promotions in all channels.
  • Price parity, where reasonable, across all channels.
  • Be everywhere your customer is by participating in an explosion of channels.
If businesses do this, then omnichannel experts suggest that profit should be robust - because the business is meeting the needs of the customer.

Does Barnes and Noble meet the needs of the omnichannel customer?  Absolutely!
  • Inventory available via Nook (digital), e-commerce, or in-store.  How do you beat that?
  • Digital device (Nook), or available on iOS and Android devices via an app.  How do you beat that?
  • Similar book-based merchandise assortment to the competition (Amazon).
And yet, Barnes and Noble struggles to generate a profit.  The Nook division appears to be losing hundreds of millions of dollars, and it appears that sales of the Nook device are in decline ... content was +6.8% last quarter.

If omnichannel strategies are so critical to success, then wouldn't Barnes and Noble, with retail, e-commerce, and digital (Nook) have an enormous advantage over Amazon, which doesn't have the bricks 'n mortar advantage?

You can't blame the failure on merchandise (same merchandise as Amazon).

Why does an omnichannel strategy, one that should guarantee success for Barnes and Noble, lead to the opposite outcome?

Discuss.  And discuss what this truly means for the validity of omnichannel strategies.