Evan Schuman: Barnes & Noble plays into Amazon's hands
- 13 August, 2014 00:41
The ongoing battle between Amazon and Barnes & Noble is interesting to watch, although observers who are hoping for Barnes & Noble to be a David to Amazon's Goliath should steel themselves. This is more likely to resemble Godzilla versus Bambi. And that just becomes clearer as the fight starts to focus on same-day delivery.
Barnes & Noble's new commitment to same-day delivery speaks to a broader, strategic view of e-commerce, one that CIOs need to play an increasingly active role in. Merged-channel strategies -- combinations of e-commerce, in-store and mobile tactics -- need to align not only with the goals of the company, but also its specific strengths and weaknesses. Merged channel must also factor in a candid analysis of the competition so that it can be shaped to deflect rivals' strengths while accentuating your own. That is where B&N has dropped its stack of books.
It's easy to see how same-day delivery does everything right for Amazon. It's the e-commerce behemoth, and same-day delivery clearly strengthens its brand. B&N, however, is an online laggard whose real strength (such as it is) lies in its retail stores. An underlying problem for B&N is that same-day delivery is worse than simply being a matter of the also-ran trying in vain to match what the leader of the pack can much more easily accomplish. No, same-day delivery actually undermines B&N's strengths. That's because same-day delivery is not just about faster delivery. It's about getting shoppers to change their behaviors.
Consider the end-of-the-year retail bonanza commonly referred to as "the holidays" or Christmas. You can be sure that every retailer that operates where Christmas is celebrated thinks about that period a lot, depending on December shopping days to put them in the black for the entire year. And the closer you get to Christmas Day, Dec. 25, the bigger the sales opportunities are. For online retailers, though, that's true only up to a certain point. After Dec. 22 or so, online shoppers abandon their favorite retail websites and head to the mall instead for any remaining gift buying they need to do. That's because they want guaranteed delivery by Dec. 24.
And so Amazon has started experimenting with same-day delivery in certain markets. It makes perfect sense. Every day that it can extend the Christmas season benefits its bottom line tremendously. At the same time, same-day delivery could potentially undermine one of the strongest advantages of brick-and-mortar retail stores. People who took to shopping online because it afforded them a way to avoid long lines and full parking lots could now have more days when doing that makes more sense to them -- and those days are the most important ones of the year for retailers.
And so, back to B&N. Last week it announced same-day shipping trials in New York City, West Los Angeles and San Francisco. By doing so, it was clearly trying to play catch-up with Amazon, which just one day before had expanded its same-day shipping service to Baltimore, Dallas, Indianapolis, New York City, Philadelphia and Washington, D.C.
Where is the competitive advantage for B&N? In fact, it seems to be playing into Amazon's hands. When both booksellers are pushing same-day delivery, this devolves into a battle focusing on inventory and price. Put another way: Amazon wins. The only way for B&N to win is to focus on the inherent advantages of a physical bookstore. (Although, realistically, winning for B&N is going to look more like simply putting off losing and utter devastation for a few months or, at most, a year or two.)
B&N isn't alone in making such a mistake. This is a problem throughout much of retail. Physical chains try to battle online retailers by replicating online services. Have they even thought this through? The initial bookstore response to online is the correct one. Invest in comfortable chairs and tables, pipe in topic-conducive music in the different sections of the store. Sell lots of coffee and snacks for people to enjoy while reading. Have authors come in and speak and sign books. Set up discussions. Use your online presence to drive more traffic to the physical stores.
In short, do the things that your customers want and that Amazon can't. Same-day delivery is a great move for Amazon and a self-defeating one for B&N. Getting customers more comfortable with the idea of fast book delivery serves only to enhance Amazon's standing.
Evan Schuman has covered IT issues for a lot longer than he'll ever admit. The founding editor of retail technology site StorefrontBacktalk, he's been a columnist for CBSNews.com, RetailWeek and eWeek. Evan can be reached at firstname.lastname@example.org and he can be followed at twitter.com/eschuman. Look for his column every other Tuesday.
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