Dear B&N,
I want you to succeed. Really, I do. I know it’s hard to believe, being the former Borders’ girl that I am. And sure, my personal library is pretty heavily Amazon-focused. But I like the competition. And I like bookstores. And you bring both. But come on, you need to step up your game, and it seems like you’re falling behind at exactly the wrong time.
Let’s look at your main competition, Amazon. They have the Kindle Fire tablet coming out, and the “special sauce” is their ecosystem. Point for point they offer more value to a new customer. Let’s see:
- Apps: Amazon’s AppStore is well stocked, and works on multiple Android devices. Your NOOK Apps only work on NOOKs, and cost as much as their more versatile Amazon counterparts. Not good for you. Honestly, short of partnering with a rival store, there isn’t much you can do about the app flexibility .The best you can do is make sure that original NOOKcolor owners can redownload their apps for free. In addition, you need a killer app. Something that showcases the NOOKcolor, or that lets NOOKcolor owners play against one another. Just a way to make people want to explore the apps. Finally, get prices as low as possible. If an app isn’t transportable from a NOOKcolor to an Android phone, it needs to be cheap, or of incredible value. Give people an economic incentive to buy the apps from you, because there is a silver lining here: Amazons AppStore can head to other platforms. If someone falls in love with a NOOK app, they have to stay in the B&N ecosystem, a huge win for you!
- Media: The Kindle Fire will have access to the library of free-with-Prime movies Amazon offers. While the NOOKcolor does have limited media support, it isn’t as simple as click and watch. Here’s where you have an opportunity, though. Amazon fires Achilles heel is connectivity. So push the NOOKcolors ability to watch a movie from SD card. Use your strength! There’s a rumor you are adding Hulu+ support, and that’s nice, but an extra 10/month for something with the same connectivity limitations as the Fire is just matching, and you need to exceed.
- Books: Effectively, Amazon kicked you in the unmentionables with their Kindle lending announcement. A free loan a month with Prime membership is unreal. For a voracious reader like me who can go through 4-5 books a month, that pays for Prime all by itself. But you have a slim shot here. It means taking a lot of risk, so sit down for this. You have a membership card, remember? It’s that $25 service that’s of zero value to your NOOK toting customers. Double the fee and match Amazons program as best you can. I fully believe it can work-if Amazon can stretch $80 to cover movies, shipping, and now books, you can use it to offer 10% off paper books and a free lending library of ebooks. But do it now. The longer you wait the worse it’s going to get. The last thing you want is more and more of your customer base picking up Prime for movies or shipping and stumbling into the benefits of this new lending program.
So things look a bit bleak. I have faith you can innovate, just like you did with the original NOOK and the NOOKcolor. You helped drive a price war that has really benefited consumers. You pushed Amazon to up their ebook game because you took 15-20% of the market inside of a year! Amazon may be #1, but you came out swinging to be #2. However, it seems like Amazon’s response to the NOOKcolor caught you way off guard. How else to explain the leaks that you’ve insanely priced the NOOKcolor 2 at $249? Yes, the rumor is that there is more memory. Yes, it’s a bit thinner. But think like a consumer. Two products, one from a bookstore and the other a web retailer/bookstore. Both offer a color, tablet-style device. But for the cost of one, you can get the other plus a nice case and a few books! Maybe you have to shell out $80 for Prime too, but then all those other holiday gifts will ship for free. Plus a free book loan each month, and the family can cancel Netflix and just use Amazons movies instead. Or, they can spend more money on a tablet ebook reader that doesn’t offer any of those things. Which do you think they’ll pick?
I am not saying the NOOKcolor 2 won’t be a great device. But great device=/=great success. That often goes to the better marketer, better brand name, better extras…see where I am going?
So let’s see you revisit some strengths. You have physical stores and a membership program. Reward your members. Offer 10% off a NOOK to members, raise the membership fees and throw in a lending library. Kill the free ebook reading in-store; all it does is further the free riders sitting in the café not buying books. Find another way to encourage people to come in-store. Make ebook themed gift cards for the holidays. Sell “store exclusive” cases. Have every store hold weekly training on how to maximize your NOOK use. All these things will bring in foot traffic and leverage your stores. You can’t match Amazon on any features that require cash or multimedia. Amazon has deep pockets and a big media library. But Amazon isn’t everyone’s neighborhood bookstore. Amazon isn’t the place where your kids went to story hour. And Amazon isn’t the place you take a date for coffee and book browsing.
So use your stores! Showcase your devices! But please, don’t release the NOOKcolor 2 at $249. You’re only as good as your competitor’s better deal.
I will be watching closely Monday and rooting for you to succeed. Don’t let me down!