Stick a Google-Shaped Fork in Barnes & Noble

Everyone hailed the Nook as smart business. Now, thanks to the very same company that powers the Nook, it’s going the way of disco -- fun while it lasted, but an impractical long term way to groove.
The hype around Google’s new Nexus 7 tablet is mostly surrounding its threat to Amazon, and while there may be merit there, the striking first casualty is Barnes & Noble. With brick and mortar bookstores and physical reading of books declining in favor of e-readers, Barnes & Noble announced plans earlier this year to this one from Peter Svenson of the Huffington Post, I am convinced that the Nexus 7 will provide me a far better experience than my Nook or a continued relationship with Barnes & Noble would. Here are my top 3 reasons as follows:

1) I will have access to the full range of apps in Google Play. There are many apps that I would like to have on my tablet that I simply can’t. Take a big one. DIRECTV recently introduced its watch anywhere app called, appropriately enough, DIRECTV Everywhere. A tablet seems the ideal device on which to add this app, yet it’s not available in the Nook App Store, and I can’t find information on its future availability. The Nook tablet is also still running a very old version of the Android OS, Android 2.x. With the Nexus running 4.1 (Jelly Bean), I will get access to some pretty cool new stuff like NFC and Google Now, which from early reports seem much more suited to what I would want than what Siri delivers (via Steve Kovach of Business Insider). I also did a quick (and not statistically valid) check of content on Google Play, and every book that I could get on I could get on Google Play at the same price. Using the Kindle Android App, I will also have access to the Kindle store if needed. I will then get greatly enhanced overall content by moving to the Nexus 7, a true Android tablet.
2) Barnes & Nobles loyalty program is not particularly sticky for me -- in fact, in my opinion, it’s terrible. The primary goal of any loyalty program is to drive higher engagement and stickiness. Their program has failed for a very simple reason. It is a loyalty program that rewards behavior that I have left behind -- buying books in store. No amount of purchases that I have made of e-books receive any credit whatsoever, so when I stop using my Nook, the only thing that I leave behind is the memory of the books I have already read, which could lead to some needless re-purchasing. I think buying a couple of e-books per week for over two years should lead to some recognition, but last year, when I left my Nook in a hotel and took almost a month to get it back, I reverted to using the old fashion channel. Yet B&N never even picked up on that fact with any tailored communications. In fact, its loyalty communications strategy is abysmal. The program is a paid program, and I would at least expect a quarterly email detailing how much program membership has benefitted me. So, the loyalty program itself is actually Teflon instead of sticky.
3) The Nexus 7 simply seems to be a better device. It runs a blazingly fast processor, the Nvidia quad-core Tegra 3, which has a much more vivid and scratch resistant screen and has been optimized for gaming, which is essential for my 11 year old, who is also a Nook tablet user. In fact, I think I know what her 12th birthday present will be! With NFC, Bluetooth, a camera and the latest version of Android, this actually becomes a no brainer at $199.
So, e-books are killing the Barnes and Noble retail model, and Google can now kill their e-book model. B&N will lose my business in buying e-books, as well as the small annual spend on its loyalty program. Will they notice? In my experience with them so far, no they won’t. Will they care? Ummm, yes, as the business in its entirety gets shuttered. I wonder if Google will now attempt to create some stickiness with Google Play?

Category: branding, consumer engagement, Acquisition Strategy, offer management, marketing enablement, persona marketing, offer strategy, customer acquisition, loyalty programs, pluris marketing

Michael Caccavale

Michael Caccavale

As the leader of Pluris, CEO Michael Caccavale is the innovator and forward-thinker behind the company’s marketing enablement, analytic and optimization solutions.

About this blog

At Pluris, we believe that we all can do a better, more efficient job at marketing to our most important customers. On this blog, we'll discuss how strategy, database management, offer optimization and analytics can help us all be better marketers. Sometimes, we may just talk about sports.

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