October 21, 2011

Good news/bad news: B&N expands its non-book business


We’ve commented before that Barnes & Noble was actively shrinking its commitment to books — it seems dubious to us that it will even be selling print books in brick-and-mortar stores much longer. One thing that first got us thinking about that was that when Borders went bankrupt, B&N did not act aggressively — did not act at all — to fill in the vacancy Borders left behind and capture some of its business. In fact, within a month of Borders announcing it wasn’t paying its Christmas bills (last December), we here at Melville House noticed a significant drop-off in orders from B&N, and a massive up-tick in returns of backlist titles: our largest chain bookseller was shrinking, and shrinking rapidly.

This has all been kept on the hush hush, and people in the industry seem more frightened to discuss the demise of B&N than even the rise of Amazon’s publishing business. But the thing is, unlike Borders, B&N is a solid company with a very smart executive team. They are not on the verge of bankruptcy. So what’s going on?

Well, as we said in our Borders wrap-up (linked above), our observation is that B&N plans to devote a rapidly increasing amount of attention to higher margin items, and our prediction is that it plans to do it online … yep, just like you know who. And a Thursday news item seems to make the case. As a Publishers Weekly story reports:

Barnes & Noble is expanding its non-book offerings. The company, which already sells a variety of forms of media and entertainment, ranging from games to toys to crafts, is adding over one million new products to its online marketplace. The growth is coming with a partnership the retailer has established with a handful of retailers, including Wayfair.com, Right Start, Abe’s of Maine and Deilvery Agent. Currently BN.com Marketplace features products from over 10,000 other retailers.

With these new partnerships, B&N will be offering free shipping on a number of its new product offerings through the holiday season. The partnerships have also led to five new categories at BN.com Marketplace: Home and Gift, Consumer Electronics, Arts and Crafts, Toys and Games and Baby.

The disappearance of another 700 bookstores, or even the halving of their book business, coming on the heels of the vaporization of Borders, would be a devastating blow to the book industry. But this is, perversely, a good news/bad news story. As one commentator put it under the PW story: “I’m not a big fan of Barnes & Noble, but I could become one if the company is serious about challenging Amazon for online market supremacy.”

So could we.

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.