Barnes & Noble Expands Online Marketplace

Discussion
Oct 26, 2011

If you can’t beat the competition with what you’re doing, try seeing if you can beat them doing what they’re doing. That appears to be the mindset, at least on piecemeal basis, for Barnes & Noble, which announced last week that it was expanding its BN.com Marketplace of third-party sellers to add several new categories of products, including arts and crafts, baby, consumer electronics, home and gift, and toys.

The company has added Abe’s of Maine, Delivery Agent, Right Start, School Specialty, Inc., UnbeatableSale.com, Inc., Wayfair.com and others as new partners to the site.

"The expansion of BN.com Marketplace is an organic extension of our consumer value proposition," said John Foley, pesident of eCommerce, Barnes & Noble, in a press release. "If shoppers are buying cookbooks from BN.com, it’s natural to offer them cooking supplies at the same time; if shoppers are buying new baby books, it’s natural to offer them baby supplies as well; and so on across all of our categories. In this way, we can offer our valued customers a one-stop shopping destination."

Niraj Shah, CEO and co-founder of Wayfair.com, said, "Within the next six months, we aim to offer 500,000 of our home products — from recliners and rugs to toasters and table lamps — to Barnes & Noble customers."

Morningstar analyst Peter Wahlstrom told Reuters that he did not expect the move to substantially boost Barnes & Noble’s numbers. "It’s an incremental traffic driver and helps with branding," he said.

Discussion Questions: What do you think of Barnes & Noble expanding its marketplace? What do you think its next move should be?

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14 Comments on "Barnes & Noble Expands Online Marketplace"


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Richard J. George, Ph.D.
Guest
7 years 5 months ago

Too little, too late. The horse (Amazon) has left the barn and has a huge lead in this race. For B&N to win, it needs to find a new race in which it has the potential to win.

Ryan Mathews
Guest
7 years 5 months ago

It’s too little WAY too late.

It’s next move ought to be to figure a way to seamlessly integrate its physical and digital offerings, otherwise it’s just committing the “Sin of Border’s” — building the market for its competition.

There’s little point in B&N trying to out-Amazon Amazon. What they need to do is find a way to create customer value in their own right, and on their own terms.

Doron Levy
Guest
Doron Levy
7 years 5 months ago

I think BN’s next move should be to figure something else out entirely. They’re going up against Amazon now? BN’s is having trouble managing their core business of books and media, now they want to expand into other products? It just doesn’t make sense. Focus on what you know (which in this case is books and bricks and mortar) and then expand once you whip your category.

Ed Rosenbaum
Guest
7 years 5 months ago

This is just as much a matter of survival as anything else you might want to call it. The old expression “if you can’t beat them, join them” fits well in this case. B&N will not make it only as a brick & mortar business. They have to have an expansion plan to go with the core business. The core business becomes the draw to look for other purchases while on the site. I like what they are doing. No, they will never reach Amazon status by doing it. but they will grow their business.

Max Goldberg
Guest
7 years 5 months ago

It makes sense for B&N to expand its marketplace, but I don’t see it driving a lot of incremental revenue for the bookseller. That ship sailed a long time ago, and its name is Amazon.

Bill Emerson
Guest
Bill Emerson
7 years 5 months ago

You have to give B&N credit for trying to build volume in the face of the e-reader assault. Unfortunately, they’re late to the game. They could buy the skill sets and experience, but this is something B&N has historically never been good at. They are a fine brand and command a lot of loyalty, which will translate into some volume, but not nearly enough to offset the losses in their core business. I don’t think Bezos is losing any sleep over this.

David Slavick
Guest
David Slavick
7 years 5 months ago

Physical store booksellers are going the way of the dinosaur. The list of initiatives to improve their KPIs (key performance indicators) are long: source new innovative technology to deliver content for the avid reader, pre-school and up outreach to create new B&N advocates, partners to expand their value proposition and focus on driving incremental behavior for those customers who have their MasterCard delivering rewards for preferred spend. Complimentary sales through the website isn’t going to spike their EBITDA, but the beauty of the web is that it delivers new news to avid online buyers and lifts average spend. Fulfillment is through the partner, so overhead expense is not likely impacted. The key is bringing on partners that have broad appeal and offer high quality products — don’t want to hurt the B&N brand.

Dr. Emmanuel Probst
Guest
Dr. Emmanuel Probst
7 years 5 months ago

I can’t blame them for fighting to stay in business. At least, they try to somewhat re-invent themselves so that they don’t end up in a Borders situation. The bookstore model as we know it is dead. I suggest shrinking average store size drastically and focusing only on a few best sellers (since Amazon will have 10x more SKUs in any given category anyway). Most importantly, BN would develop in-store events such as book signing but also cooking demos, puppetry shows, expert panels … instead of a bookstore that hosts book signings, think of a central stage around which BN would sell books. The in-store experience becomes the center of attention. Like a combo between Books-a-million, Williams-Sonoma and meetup. Thoughts?

Ryan Mathews
Guest
7 years 5 months ago
Since he asked, I have to disagree with Emmanuel’s suggestion about focusing on best sellers. These are exactly the titles subject to the heaviest discounts and the most promotion everywhere from Amazon to Costco. Who wants to invest in — and fight hard for the right to — selling the new Steve Job’s biography at 60% or 70% off or whatever discount is needed to entice somebody away from the 40% to 50% discounted pre-orders? As to signings, how long do you think it’s going to take Amazon — and authors — to figure out how to sell signed first editions? What’s the difference between signing 1,000 books at 10 different bookstores in five different cities which are sold at cost or below and sitting down in one place and signing 1,000 books which can then be marketed at a premium? Let’s see … their margin, cost reduction, time savings, wear and tear on the author … well, you get the idea. I’ve written three books myself and while it’s great to meet your fans,… Read more »
Anne Bieler
Guest
Anne Bieler
7 years 5 months ago

This move will be a challenge until they find the differentiation that will keep the loyal shoppers on track. It would make sense to really develop core interest areas, cooking, decor, collectibles, fitness or other possibilities that will resonate and could be well served by B&N. Without significant points of difference and great execution, it will be hard to find a place with Amazon so far ahead.

Mark Burr
Guest
7 years 5 months ago

“The expansion of BN.com Marketplace is an organic extension of our consumer value proposition.” Really? Really?

I hate to be harsh, but I really didn’t know they had a value proposition to expand upon!

Come on now Scanner, that sounds harsh! Reality sometimes is harsh.

Amazon is far more than books. Nordstrom is far more than shoes. Okay, so they had to start some place. The problem is that, as noted by many, it could be too little, too late, and too much of a mountain to climb, especially with this tactic.

If they have decided that this tactic is their value proposition, there’s a lot of rethinking that needs to be done. Wouldn’t they want to start with determining what the real value they offer is? Clearly, consumers have determined otherwise.

Try one thing. What is that one thing? It’s definitely not what others are doing so well that you stand no chance of slicing even a small piece of that pie to survive on.

Lee Peterson
Guest
7 years 5 months ago

Grasping at straws…wow! Time might be better served selling their real estate to Forever 21.

Kimberly Nasief-Westergren
Guest
Kimberly Nasief-Westergren
7 years 5 months ago

I see this as the beginning of the end. It’s like that local restaurant that just opened. Dinner only; then they add lunch. Finally, breakfast. It’s a desperate, too little too late death knell.

Mark Price
Guest
Mark Price
7 years 5 months ago

Given the crowded market for e-books these days, it makes sense for B&N to seek to provide consumers with a bunch of other reasons to visit their site. This strategy permits them to drive incremental traffic to their site (based on searches of the other products that will be in the marketplace) as well as provide additional reasons for current customers to repeat more frequently.

The next move should be to include some level of the B&N Card benefits to those customers, similar to Amazon Prime, to help to make B&N Marketplace one of the first places that customers will come for a variety of needs. With free or discounted shipping, the site can draw incremental purchases across a range of products, similar to Prime.

In addition, B&N should explore using their brick and mortar locations as ship-to addresses for the marketplace products, with no shipping charges. In that way, they can challenge Amazon based on their physical infrastructure, a clear competitive advantage.

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