B&N in a Fantasy World

The Amazon versus Hachette stories in the newspapers and the blogosphere started me thinking about Barnes & Noble yet again. (For those of you unfamiliar with the Amazon–Hachette dispute, it boils down to this: In a few months, the prohibition against agency pricing that came about as part of the settlement agreement between the U.S. Department of Justice and the big publishers expires. Amazon is trying to get Hachette to agree to a new division of fees — Amazon gets more, Hachette gets less — as a sort of preemptive strike to stop the reimposition of agency pricing. For the first time in its history, Amazon is under pressure to produce large profits and it sees as one avenue to doing so receiving a larger discount from publishers. Although the fight is currently over print books, most commentators see it as a proxy for ebooks. The speculation is that if Hachette succumbs, the other publishers will follow; if Hachette prevails, agency pricing is likely to be reinstated by all of the publishers.)

As many of you know, I buy a lot of books through B&N. In May alone, I received eight hardcovers from B&N and preordered several more. In looking at my list of preorders, I find that I currently have 11 preordered hardcovers and 18 that I am thinking of preordering. (I do not preorder ebooks. I only preorder books that I want in hardcover.) Since January 1, I have purchased (and received) another 21 books from B&N.

In my fantasy world, B&N cares very much about me as a customer. In the real world, B&N cares for me as much as Amazon does, which isn’t a whole lot. Yet with the Amazon–Hachette dispute, B&N has a golden opportunity to strike a blow for its own special relationship with its customers. Alas, if history is any guide to the future, this will be another opportunity that B&N misses.

So let’s look longer term than what B&N could do tomorrow while the Amazon–Hachette dispute festers. What is it that I, as a regular customer of B&N, would like that would entice me to spend even more money at B&N (and also might be appealing enough to draw in new customers)?

A fundamental rule for all businesses is that to survive and grow you need not only new customers, but you need to retain existing customers. B&N doesn’t do a great job at either.

Both Amazon and B&N use some algorithm that, when you buy a book, says “customers who bought this book also bought”. Who cares? I don’t care what someone I don’t know bought, especially when the suggested books are so unlike what I did buy. To me, it is like the anonymous reviews or the reviews by IAteMyTongueYesterday.

Instead, I would like to be given opportunities to (a) have forthcoming books by the author automatically preordered for me with (b) a guarantee that I will pay only the lowest price at which the book is offered by B&N and (c) with the opportunity to cancel the preorder before the book is shipped. This would be particularly valuable because customers would no longer need to remember to keep checking to see whether an author has a new book coming out.

I would also like to be able to create a custom newsletter that would keep me abreast of new releases in particular areas. Now I can sign up for broad categories but I want to be able to narrowly focus. I want to be able to say, for example, “World War II history, European theater” of “Fantasy but no vampires or time travel.” I also want to be able to set the frequency. Personally, I would opt for once a month; weekly is far too often for me.

It happens that I am also a member of B&N. With the number of books that I order, it is worth the $25 annual fee to save on the shipping. But except for the shipping savings, being a member is a pretty useless thing at B&N if you shop online. (It isn’t that valuable if you shop in the stores, either.) There area no member discounts or specials online; just the saving of the shipping charges and the getting of “express” shipping, which isn’t all that express.

Now, while Amazon and Hachette (and subsequently the other big publishers) fight over terms and Amazon cuts access to Hachette books, B&N should enhance its membership — give inducements to become a member and to shop at B&N.

I recommended a long time ago that B&N cut deals with publishers to offer a very significant discount on the ebook version of a book if a customer buys the hardcover version. Or, twist it around and offer a significant discount on the hardcover version to the ebook buyer. That’s one inducement that would work with someone like me. But there are a lot of people who are uninterested in having a second copy of a book, even if in a different format.

Perhaps the way to do it is to give members reward points. One point for each dollar spent on books and ebooks, with the points redeemable for a B&N gift card or as a discount on a future purchase.

The point is that B&N needs to quickly figure out some way to immediately take advantage of the Amazon–Hachette spat. It also needs to come up with some ways of inducing book buyers who are currently buying from Amazon to buy, instead, from B&N. Although B&N will not move those who are in lock-step with Amazon, there are a lot of book buyers who are open to shopping elsewhere.

And B&N has to move because its big box competitors, like Walmart, are attempting to woo those same Amazon customers with steep discounts on Hachette books. The odds are long — very long — against B&N doing anything but blowing this opportunity, but one can hope.

Richard Adin, An American Editor