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You Can Get It At Barnes & Noble, Except When You Can’t

There weren’t any large bookstores in my neighborhood when I was growing up in the Bronx. That didn’t matter to me, however, because my mother worked just a few blocks from a one-of-a-kind store in Manhattan, at 18th Street and Fifth Avenue.

Whatever I needed, chances were good that Barnes & Noble had it.

First established at 31 West 15th St., and moved to the 18th Street location in 1932, the flagship Barnes & Noble store was purchased by Leonard Riggio in 1971 and became ground zero for a bookselling revolution. Though that original outlet was already big by the standards of the time, Riggio sought to make it, and the many other Barnes & Noble outlets that followed, the premier source for books of all types.

The strategy began with discounting and mail order sales, continued with the assembly of a national chain of large retail outlets, and more recently led to the creation of a book publishing arm and a digital store. The company’s website claims that “Barnes & Noble superstores have become the information piazzas of America,” combining “a vast and deep selection of book titles with an experienced bookselling staff and a warm, comfortable and spacious atmosphere.”

Soon, that staff is going to have to start telling customers that the deep selection of book titles has gotten a little shallower.

Barnes & Noble recently announced that its stores will not carry any books released by Amazon’s new publishing division. That announcement came after a new imprint of Houghton Mifflin Harcourt agreed to publish and distribute Amazon Publishing’s list in traditional paper form, providing the digital titan with a path into the brick-and-mortar world. Already, Amazon Publishing is building its list. Last summer, it acquired a book by self-help author Timothy Ferriss, who was previously published by Random House, and a memoir by the actress and director Penny Marshall. Unless Barnes & Noble changes its mind, however, its customers will never find those books on its shelves.

Barnes & Noble has reason to be unhappy about giving shelf space to Amazon. Since Barnes & Noble first introduced its e-reader, the Nook, in 2010, the two companies have entered into increasingly close competition. The two have also found themselves in opposing camps in the intensifying battle over whether online retailers ought to be required to pay sales tax.

Barnes & Noble took particular offense at Amazon’s strategy of seeking out exclusive e-book deals with publishers, agents and authors, blocking other retailers from carrying digital editions. “These exclusives have prohibited us from offering certain e-books to our customers,” Barnes & Noble’s chief merchandising officer, Jaime Carey, said in a statement. He claimed that Amazon’s actions “have undermined the industry as a whole and have prevented millions of customers from having access to content.”

Barnes & Noble said last August that it would sell print editions of Amazon Publishing’s books in its stores only if it could sell digital editions as well. By stocking physical copies, Barnes & Noble argued, it would be promoting titles customers might then decide to instead purchase in cheaper, digital editions, which they could do only from Amazon. Amazon continued to refuse to allow Barnes & Noble to sell its e-books. The recent announcement is Barnes & Noble’s response.

Barnes & Noble is betting that Amazon’s new print operation needs Barnes & Noble more than the bookstore chain needs Amazon’s books. This sounds like a game of chicken that Barnes & Noble is likely to lose.

Barnes & Noble has only a 17 percent market share of print book sales, compared to Amazon’s 29 percent. It is fair to note that some of those sales at Amazon occur only after customers have noticed the books at Barnes & Noble. The bookstore chain apparently believes it can get its way by denying Amazon exposure, as well as making it harder to sign up authors for the new Amazon imprint.

Scott Waxman, a literary agent who sold a title to Amazon Publishing before Barnes & Noble’s announcement, told Crain’s New York Business, “The idea of what Amazon Publishing can be is extremely powerful, but that was assuming the bookstore proposition would be worked out. If you take bookstore distribution out, it's certainly not appealing.”

Yet Barnes & Noble is not the only place where readers can browse or buy paper books. It only thinks it is. A second chain brick-and-mortar bookseller, Books-A-Million, has joined Barnes & Noble in its planned boycott. But even adding Books-A-Million’s 251 stores to Barnes & Noble’s 703 official Amazon-free zones, when it comes to sheer number, the chains are no match for the nation’s 9,225 public libraries. At libraries, patrons can not only get the books of their choice but can also do so for free. If Amazon publishes titles that people want to see, people will go wherever they must, including the library, to see them.

For those unwilling to give up their marginalia, there are also approximately 1,900 independent bookstores across the country. Some of these will likely sign on to fight what they see as the good fight against Amazon. But others will almost certainly take advantage of the opportunity to serve the customers their larger competitors have chosen to shun.

In an email interview published on NBC Chicago’s business blog, Kevin Elliott, the manager of a literary advocacy organization, argued that independent booksellers should set aside their feelings about Amazon and sell the books their customers want, regardless of the publisher. “I may have personal opinions and strong feelings about what Amazon and B&N and Houghton Mifflin Harcourt are doing,” he said, “but as a bookseller, I want to make as many different books available to as many different readers as I can. Period.”

That opinion gets to the heart of what is wrong with Barnes & Noble’s strategy. Barnes & Noble is breaking retailing’s cardinal rule: the customer always comes first. Barnes & Noble built its reputation by being the store where you could get anything. It is not going to keep that reputation if it becomes the store where you can get anything that is not published by a competitor. Booksellers exist to sell books their customers want to buy, and executives who forget this do so at their peril.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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3 Responses to "You Can Get It At Barnes & Noble, Except When You Can’t"

  • Torsten Adair
    March 6, 2012 - 5:08 pm

    Ah, but the customer is not always correct. Many owners create a business that matches their philosophy, and hope to attract the clientele they prefer. Many independent bookstores specialize in specific subjects, and many will not stock or recommend substandard titles. (How many independent bookstores stock Harlequin romances?)

    Even the Library of Congress, which acquires millions of books and items each year, many of them for free, is selective in what it keeps and shelves.

    Every library has a selection policy. Some will stock popular titles, but with limited budgets, libraries cannot offer everything.

    Barnes & Noble could gain favorable exposure for their stance, just as they are from fighting Amazon over sales tax revenues. A bigger question: What happens when Amazon asks for more exclusives, either via paper or e-books? Will publishers suffer the wrath of Amazon if they do not acquiesce?

    Regarding brick-and-mortar bookstores, how many people will come in looking for an Amazon title, see the cover price, and decide to buy the book at Amazon.com? (I’d say at least 10% will scan the barcode in the store and/or use their smartphone to place the order.)

  • Mary Beougher
    March 7, 2012 - 9:10 am

    Of course, now Amazon is going to start offering ebooks outside of their Kindle store. It sounds like maybe they were listening to Barnes & Noble, BooksAMillion, and all the others who think Amazon is out of control after all.

  • Catherine James
    March 7, 2012 - 6:58 pm

    I disagree too – the customers are not seeing how a monopoly by Amazon will hurt them in the long run. People talk about New York publishers being the “gatekeepers” of what the American public reads. What do they think will happen if the marketplace begins and ends with Amazon? One company serving as the sole provider of content means diminished diversity and arbitrary policing of what we read. I for one salute those who stand defiant against the enormous pressure of Jeff Bezos and his rampant greed.