Barnes & Noble Inc. owns and operates the largest chain of bookstores in the United States. In 1917, the company was formed by combining the C.M. Barnes Company, a seller of new and used books, and Noble & Noble, an educational bookstore. The company’s primary business was wholesaling to schools, libraries, and dealers. Barnes & Noble entered the retail sector rather reluctantly. It agreed to “tolerate” (not encourage) sales to individual college students who contacted them directly. Customer demand for individual book sales grew. In 1932, Barnes & Noble opened its first retail store in New York at Fifth Avenue and 18th Street. This flagship store became a model for college bookstore operations as the target market remained college students. For the next twenty years, Barnes & Noble successfully operated their retail division alongside its original business of wholesaling to schools and libraries. In 1969, a “crippled” Barnes & Noble was purchased for $750,000 by a young entrepreneur named Leonard Riggio. He developed Barnes & Noble into an educational bookseller with a broader focus that included all kinds of “how-to” and non-fiction books. By 1976, the company operated 21 campus bookstores and Riggio had grown the wholesale and retail divisions to $32 million in sales. This financial success made possible the creation of the first book supermarket. The original Barnes & Noble superstore opened across the street from the original flagship store. It provided a warehouse environment for educational books, children’s books, fiction, non-fiction, and gift books. This original model was designed to attract the average shopper, not simply the academician or bibliophile. It was a unique marketing technique.
Between 1980 and 1990, Barnes & Noble acquired Bookmasters, Marlboro Books, Inc., Doubleday Book Shops, and B. Dalton Booksellers. In 1990, Barnes & Noble operated a total of 23 superstores. Each store was large—carrying a many as 150,000 titles— offering a pleasant customer-friendly atmosphere encouraging shoppers to browse, read, and linger. In 2009, the total number of stores had grown to nearly 800 in all 50 states. In addition, they operate 636 college bookstores. In spite of concerns that rapid expansion would saturate the book market, Barnes & Noble seemed to understand the importance of environment—equally suited to bargain hunters, book lovers, and people who like to socialize. Today, in addition to a vast offering of books, Barnes & Noble offers magazines, newspapers, DVDs, audio books, gifts, games, and music.
By 2000, Barnes & Noble, the number one bookseller in the U.S., met a major threat. The fact that Barnes & Noble held a 15% share of all book sales in the U.S. was less important than the fact that Amazon.com held a 75% share of online book sales. The result was a sudden halt to store expansions and new emphasis on developing barnsandnoble.com. Today, Barnes & Noble is the second largest online retailer, carrying over 1 million titles.
In 2003, Barnes & Noble expanded its product further with the acquisition of Sterling Publishers. Management saw publishing as a way to create revenues from both the publishing and the selling of the same title. In 2009, Barnes & Noble introduced its digital-book reader, the Nook.
Revenues for FY2009 totaled $5.8 billion—10% of which came from Internet sales. Amazon remains the online market leader with 70% of total online book sales compared to Barnes & Noble’s 20%. Global revenues for Amazon.com for FY2009 totaled $24.5 billion.
- Define the major types of retail operations utilized by Barnes & Noble.
- Did the development of the “superstore” change its primary type of retail operation? Explain.
- Explain how the “atmospherics” of Barnes & Noble serve the perceived needs/wants of the consumer. Do the atmospherics serve Barnes & Noble, Inc.?
- How did the growth strategies of the 1980s differ from the 1990s?
- Was the re-assignment of resources from bricks & mortar store operations to barnesandnoble.com a good decision? Explain your opinion.