An American Editor

January 24, 2011

Making B&N Number One

As we know, the two ebooktailer giant in the United States are Barnes & Noble and Amazon. And, as we know, Amazon is currently the number 1 ebooktailer. But there is no reason why B&N, with a bit of shrewdness, can’t move closer to or takeover the number 1 position. I’m prepared to make one suggestion along this path.

Currently, B&N is trying to get people who do not currently own a dedicated ereader to buy a Nook. Why not work on getting people who already own a dedicated device — e.g., a Kobo, Sony, or Kindle or other brand — to move to the Nook? Why not offer a trade-in:

Bring us your working device and we’ll exchange it for a brand new nook! Want the Nook Color, you can have it for your working device plus $75. In addition, we’ll give you a $50 B&N gift certificate for buying ebooks.

I’ll admit that the offer wouldn’t tempt me considering the current state of the Nook as compared to my Sony 950, but I think it would tempt a lot of current owners of other brands. And B&N could make back some of its loss by eBaying the working exchanged devices.

The name of the game is not device owners but getting people to buy ebooks. The device is essentially a one-time sale. Most people buy the device and won’t consider buying an upgrade or newer device for several years, if not longer. In my case, I used my Sony 505 for 3 years before buying the 950 and if I had know that my wife was going to ultimately decide that she still wanted the print version of the New York Times, I would still be using my Sony 505 and would not have bought the 950. I upgraded for a specific reason that turned out to be a failed experiment.

And when I look at what other ebookers list as their device, I note that many ebookers are still using the even older Sony 500 and Kindle 1. There isn’t a groundswell that compels the average ebooker to upgrade the device. After all, the Kindle 1 and the Sony 505 still perform the function for which they were designed — enabling the user to pleasurably read ebooks.

Consequently, with the exception of the cadre who must have the latest and greatest technology, the device is not a revenue generator. Rather, it is ebooks that are the revenue generators and what both B&N and Amazon need to do is get device owners to regularly buy ebooks from their ebookstores. Thus, although exchanging other devices for the Nook would mean taking a one-time hit to the financials, if B&N got its act together, it could turn the person who buys 1 or 2 ebooks a year, or who only “buys” the free ebooks, to buy (for dollars) 10 to 12 ebooks a year.

Of course, should B&N try this it would have to be prepared for the tit-for-tat comeback by Amazon, offering an even better deal for people who exchanged their non-Kindle devices for a Kindle. To my mind, the only defense that B&N would have would be if it came up with superior customer service, aggressive marketing, and — before embarking on an exchange program — a better device.

It isn’t that the Kindle is a better device than the Nook; it is that people believe it is. Neither device is particularly well designed and both can stand some significant improvement, but B&N needs to convince users that everything about B&N is a better ebook experience than can be had at Amazon. B&N can begin by improving its customer service and the Nook. But the real ace in the hole for B&N is its bricks-and-mortar stores.

Some creative thinking about how the b&m stores fit with the Nook experience could let B&N pull rapidly ahead of Amazon in the ebook game. Here’s one thing I would do if I were in charge:

Come into the b&m store with your Nook. Browse our shelves for a book. Bring the pbook and your Nook to the special Nook counter and you can buy the ebook version at 15% off the current ebook price. And if you want to buy both the ebook and the pbook, you’ll get the 15% off the ebook and an additional 15% off the pbook price. (For B&N members this would be in addition to their member discount. Not a B&N member? Join on the spot and get the member discount plus the 15% discount.) And as long as you are here buying a book, have a coffee on us.

I would also have special sale events, worked out with publishers, that are only available in store, such as enabling a customer to obtain the first ebook in a series free if they buy the second and third together.

And why not have special Senior Citizen Nights. If you are a senior citizen, you can learn — one-on-one — how to operate your Nook and while learning how to use it (overcoming the technophobia that is often seen in seniors), we have special discounts for you, and even special subscription deals. OK, I know you are itching to hear more about this idea, so here goes:

If I were B&N’s chairman, I would be calling all of the major publishers, notably the big 6, and try to convince them to offer a special subscription to seniors. For $x per month you can “borrow” any new release for up to 3 weeks. If you haven’t finished it in 3 weeks, you can borrow it again until you do as long as you are a current subscriber. Finish the book in 1 week? Then borrow another book. The subscription fee is for 1 month for 1 device for an unlimited number of books — just 1 at a time — but you can’t keep or lend the book. Essentially it is librarying books for senior citizens with B&N and the publisher each getting a cut. 

Even if you don’t like any of these ideas, the point is that B&N needs to turn its b&m stores into an advantage in the ebook world and it needs to increase the number of Nook owners and users. I’m certainly open to suggestions, and based on what I read about B&N, it should be open to suggestions.


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