Students and alumni looking for college swag have a clear reason to walk into a university-affiliated Barnes & Noble over another store.īut Barnes & Noble spun off that part of its business into a separate entity called Barnes & Noble Education, so it'll have to find a different way to keep customers coming back, whether by hosting more compelling events throughout the year or selling more merchandise and gifts for dedicated fans. Instead, Barnes & Noble could build a community by appealing to fans of those books and artists throughout the year.īarnes & Noble was able to do that with university book stores, said Kahn. "If you're so reliant, your business doesn't work," he explained. Starbucks did not respond to a request for comment.īarnes & Noble cafes did have slightly positive results last quarter, thanks to buy-one-get-one and other deals, said CEO Demos Parneros when discussing second-quarter earnings.īarnes & Noble rides the waves on bestsellers like "Harry Potter" or hit records like Adele's "25." That's a dangerous strategy, said Saunders. The companies have not disclosed the details of their partnership. "In this case that means merchandise and food / beverage offerings." "We believe a differentiated experience is a must in today's retail landscape," added David Schick, managing partner and lead retail analyst with Consumer Edge Research. But rather than partnering with a national chain, he suggested joining forces with a local cafe in order to distinguish a Barnes & Noble's coffee shop from one you can find on any corner. Saunders doesn't think a coffee shop is a bad idea. "I'm not sure the synergy works both ways," she said. People may pop into a Barnes & Noble to get a cup of coffee, but that doesn't mean they're going to buy anything else. It's possible that Barnes & Noble's decades-old partnership with Starbucks ( SBUX) has run its course, said Kahn. And the brand is testing out smaller stores, and cutting back on gifts that don't sell. In its annual report for 2017, the company said it is hopeful that "improving navigation and discovery throughout the store, including a customer friendly and more intuitive organization of books and improved signage for easier browsing," will help sales. The company may plan on making some of these changes. Related: Barnes & Noble losses: Blame it on Harry Potter
Right now, Saunders said, shoppers face a random assortment of products, most of which can be found at stores like Target ( TGT) and Walmart ( WMT). "It makes the shopping very easy to do," she said.īarnes & Noble can start by losing its most outdated products - CDs and DVDs - and doing a better job of curating the toys, journals and other non-book items it sells. Kahn noted that Amazon's bookstores are much smaller than Barnes & Noble's, focusing on a curated collection of recommended items. Smaller stores could make for a better shopping experience, added Kahn. In order to cut down on losses, Barnes & Noble could both decrease the size of its stores and shut down some locations, said Saunders. Here are steps Barnes & Noble can take to turn itself around. In order for the company to survive, it needs to convince customers that they should shop at Barnes & Nobles, he argues. The main problem is that "Barnes & Noble doesn't seem to have a very clear proposition," said Neil Saunders, managing director of GlobalData Retail.
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