Amazon recently opened a physical bookstore. Think about that for a second. Many have decried Amazon as killing the bookstore concept with giants like Borders going out of business. The last remaining major chain is Barnes and Noble which has slowed the bleeding but is still expected to close 197 stores by 2022. The situation I pose is simple. In a world where it seems anything is possible, I think I know how to save Barnes and Noble.
I didn’t read actual books for most of my life. I was 25 when I read my first real book, not a comic book, from cover to cover. If you’re interested, the book was a deep theological work by Dr. John Piper called The Pleasures of God. Once that happened the reading habit started to grow.
I ordered physical books online usually. I was living on a remote island of around 6000 people where you couldn’t even buy underwear on island (and still can’t). Once I returned to the DC area I frequented the two story Borders near Chinatown. I also went to the Barnes and Noble in Manassas. In addition to those, I ordered online from Amazon. My habit developed into reading 100-150 books per year for several years.
I credit that reading habit with reawakening my curiosity and being a huge catalyst in my return to college. That return has gone from finishing my Bachelor’s degree to currently working on the dissertation for my PhD. Seeing Borders close and Barnes and Noble struggle brought about some observations and eventually questions on my part that I think could help save the bookstore experience.
How To Save Barnes And Nobel
The overarching problem
When I first went to Honolulu to start my PhD, it was easier to buy books at the huge Barnes and Noble at the Ala Moana mall than to order from Amazon (free 2 day shipping isn’t an option there). The convenience of picking up a book right then and there, instead of often waiting 4-5 days or more, was compelling. There was an organizational problem that still exists and I have yet to see anyone address it in even a passing manner.
Barnes and Noble competes against itself is a stunningly stupid way. Stupid is the only way I can describe it, there is no nicer term that is accurate enough. I considered buying a book at the Ala Moana location and was shocked to see that the price was different than the online price. I could buy it online, and pick it up in store when it was shipped there, for less than simply going to the store and purchasing the book. It wasn’t just different, it was full cover price in store compared to an online price that was only about $1 more than Amazon.
I don’t care what the book is. Unless it’s an emergency the convenience of picking up a book in store is not worth $5-10 or more. Unless you both have a membership and purchase one of the pre-selected books with a sticker discount in store, you’re stuck paying full price. For example, right now on 9/19/17 you can order the paperback version of Tim Keller’s book The Reason For God for $10.86 online from B&N, $11.18 online from Amazon, or $17.00 in person at B&N. The reason for this is B&N online and in store operate separately. Each individual store orders their books and sets the prices except for the few that are displayed at 20-30% off due to promotions.
That’s just stupid.
The current situation
When I say bookstores are dying, I only mean the chains. There has actually been a boom in independent stores in recent years. Barnes and Noble needs a restructuring that makes the online and in store prices identical. I can see an extra $1-2 if it helps keep people employed in the physical locations, but absolutely no more than that.
There’s another thing that operates separately from Barnes and Noble. In most of their cafe stores, you can buy Starbucks coffee and food products. The problem there is that it’s not really Starbucks so no rewards points are available. Why would I, or anyone, willingly pay significantly more for a book just because I can buy it in a store and pay Starbucks prices without getting points towards rewards? Some people will, but the hundreds of closed locations in recent years clearly signals that most people won’t.
Now that I’ve mentioned Starbucks, let’s take a closer look at where these two companies stand before I suggest my solution. As I write this it’s shortly before noon on September 19, 2017. The B&N market cap is $569.22 million. Starbucks has a market cap of $80.05 billion. Starbucks shares are carrying roughly 140x the value of Barnes and Nobel.
I think you see where I’m going with this.
The proposed solution
Starbucks should buy Barnes and Nobel.
Barnes and Noble has already announced they’re going to try locations that have bars and restaurants. Starbucks is ending its similar venture. Instead of spending so much time trying to do something so radically different, the simple solution is to eliminate the competition between online and in store while transitioning the cafes into real Starbucks locations.
Imagine this scenario. You search for a book online that you’re interested in reading. You decide you want the physical copy instead of the ebook. You check to see if your local B&N has the book in stock. You see that it does, that it’s the same price as it would be online, and decide to go pick it up. When you get there, you realize that traffic is going to be a mess for a while and sit down at the in store Starbucks cafe where you get a latte and scone that count towards your rewards. Take it one more step and make rewards points earned for books or drinks and food applicable to either one in the future.
There, you’ve saved a large book retailer. You’ve eliminated mind-numbing and unnecessary infrastructure problems. You’ve created a midpoint between the Goliath of online and the local bookstore that can personalize things in a way that no national store can at the moment.
What Are You Going To Do About It?
So, what do you think of the idea? Are there other elements that you would want to see added to the plan? Are there other businesses that you would want to see saved, and what would your plan look like to save them?