Barnes and Noble is a leading retailer of books, maps, DVDs, graphic novels, gifts, games, Nook e-readers, and tablets, with over 600 stores across the United States. Founded in 1886 as Arthur Hinds and Company, the company has its headquarters at 122 Fifth Avenue, New York City. Barnes and Noble takes pride as a pioneer in the bookselling industry, being the first bookstore to offer an in-store cafe, online book sales, and a loyalty program.
However, the company is not without competition. Given technological advances and the rise of digital reading, Barnes and Noble’s competitors continue to grow and evolve. Initially, the company’s main competitors were other large bookstores, such as Borders and Books-A-Million. However, with the advent of e-commerce and e-readers, Barnes and Noble’s competitors now include digital retailers such as Amazon and Google.
In an attempt to demystify the notion of a failing Barnes and Noble, this report will provide a comprehensive overview of the company’s competitive landscape. Can the company continue to compete in an increasingly digital world? Or is Barnes and Noble destined to become a victim of disruptive technological change?
Bottom Line Up Front
Barnes and Noble operates an omnichannel model focusing on physical and digital sales. This model exposes it to competition from digital-native companies and other physical retailers. It stands out as a trusted brand with many products, services, and loyalty programs. The company has weathered competitive threats in the past. Still, it faces an uphill battle as digital reading becomes more prevalent.
List of Barnes and Noble Competitors
Barnes and Noble Overview
When Barnes and Noble was the only big game in town, the company’s strategy was simple: be the biggest bookstore chain in the country. The company achieved this by opening new stores at a rapid pace and acquiring small regional chains to fuel its growth. It wasn’t until the late 1990s that Barnes and Noble focused on developing a more differentiated customer experience by introducing its in-store cafes and online book sales.
The 21st century, however, saw a dramatic shift in the entire retail landscape with the rise of e-commerce and digital reading. National Endowment for the Arts (NEA) reported a significant decline in non-reading adults by more than 17 million from 1992 to 2002. At the same time, the adoption of e-readers and tablet devices exploded, with Amazon’s Kindle becoming the most popular e-reader on the market.Â
Barnes and Noble needed to revise its strategy in response to these changes. The company developed the Nook e-reader to compete with Amazon’s Kindle and other digital reading devices. Barnes and Noble also emphasized its brick-and-mortar stores, revamping the store experience with new features such as in-store cafes and expanded event spaces.
Borders Group, one of Barnes and Noble’s main competitors, did not respond as effectively to the changing retail landscape. Borders essentially outsourced its online sales operation to Amazon, attempting to compete on price rather than customer experience. This strategic misstep proved fatal, and Borders filed for bankruptcy in 2011.
While Barnes and Noble has managed to stay afloat, the company has not been immune to the challenges facing the retail industry. The Covid-19 pandemic has exacerbated these challenges, with Barnes and Noble temporarily closing about 420 stores across the United States. The company has also been hurt by declining sales of physical books and Nook devices.
Barnes and Noble Business Strategy and Revenue Model
As per a report by the New York Times, Barnes and Noble’s sales increased 3% compared to its pre-pandemic sales in 2019. The company is narrowing the mix to books, puzzles, workbooks, and educational workbooks that are “essential for academic and professional development.” In other words, Barnes and Noble is trying to focus on its core competency of selling books.
Barnes and Noble’s strategy is to operate the best omnichannel bookstore business. Essentially, the company wants to provide an exceptional online and in-store customer experience. By investing in its physical stores and online presence, Barnes and Noble hopes to attract more customers and grow its market share. The company is also revamping its brand’s in-store retail experience.
The company uses a hybrid business model, generating revenue from physical book sales, Nook e-books, and other digital content. Because it’s a private entity, it doesn’t disclose its financials; however, we know the company made $3.552 billion in 2019. Barnes and Noble Education (BNED), a publicly-traded company and a spin-off of Barnes and Noble, operates college bookstores. In 2021, BNED had $1.50 billion in revenue, down 3.63% from 2020.
Barnes and Noble Competitor Analysis
Barnes and Noble competes for market share in an industry with well-established players and new startups. Below is a detailed look into some of its main competitors.
1. Amazon Books
Amazon is the world’s largest online retailer and a major player in the book industry. Jeff Bezos started the company in 1994 after noticing an interesting trend in how people were adopting the internet. He saw that people were using the internet to find information but not to buy products. Amazon was one of the first companies to take advantage of this opportunity and start selling books online.
Today, Amazon sells more than just books. The company leveraged the infrastructure it built for books to enter new markets and now sells a wide range of products, including electronics, apparel, home goods, and food. Amazon is also a major provider of cloud computing services. In the past 15 years, Amazon has reinvented itself multiple times, moving from an online bookstore to a platform for third-party sellers (Marketplace) to a producer of its products (Amazon Basics, Kindle).
It used its enormous scale to change how customers bought books, how they read, and how publishers published their copies, ultimately upending the entire book industry. While Amazon doesn’t segment its business by books specifically, it’s safe to say that books are a significant part of its overall revenue.
In 2021, the company generated $469.8 billion in sales; if books were a standalone business, it would rank as one of the largest publishers in the world. Estimates have it at less than 10% of Amazon’s total revenue.
While Amazon focuses on online retail and e-commerce, the company has a physical presence through its bookstores. Amazon opened its first bookstore in Seattle in 2015 and has since expanded to locations across the United States. As of 2022, there are 22 Amazon Books locations. The company’s bookstores sell a curated selection of Amazon’s best-selling books and products from local businesses.
2. Books-A-Million
Books-A-Million is the second largest book retailer in the United States, behind Barnes and Noble. The company started operations in 1917 as a newsstand in Florence, Alabama. It has since grown to more than 250 locations across the United States. Books-A-Million also operates an online store and sells books through its membership club, Millionaire’s Book Club.
Books-a-million is a more direct competitor to Barnes and Noble than Amazon. The company has a similar business model, selling books online and in physical stores. It also offers a loyalty program, which gives members discounts on purchases and other benefits. While it doesn’t have the scale of Barnes and Noble or Amazon, Books-a-million is a significant player in the book retail industry.Â
In 2019, the company was levering its cloud-based Aptos CRM to obtain an omnichannel customer view, which helped it to improve customer engagement and loyalty. The company’s primary focus is on the book retail industry, but it also operates in the gift and toy industries. Barnes and Noble’s main competitive advantage over Books-a-million is its scale. Barnes and Noble operate more than 600 stores across the United States, while Books-a-million has less than 300.
Complaints about poor customer service against Books-a-million are rampant. The company has been accused of overcharging customers, not providing refunds, and being uncooperative when problems arise. In 2014, 24/7 Wall Street identified the company as one of the worst workplaces. Suppose these accusations still linger. In that case, they could be a significant barrier to the company’s growth.
3. Half Price Books
Half Price Books is a US-based specialty retailer that sells used, new, and collectible books. Its motto is quite specific to its mission: “We buy and sell anything printed or recorded except yesterday’s paper.” Founded in 1972 in a Dallas, Texas suburb, the company now operates more than 120 stores across the United States. It also has an online store and sells through its Half Price Books marketplace on Amazon.
The company has a different business model than Barnes and Noble. It focuses on selling used, new, and collectible books at discounted prices. The company can offer lower prices than its competitors by focusing on used books. It also publishes some of the books it sells through its imprint, HPB Press.
While Half Price Books has a niche focus, it’s a significant player in the book retail industry. It doesn’t release its sales figures, so we can’t sell for sure how its performance compares to Barnes and Noble or Amazon. However, we acknowledge its success in building a significant physical and online presence. The company survived the dot-com crash of the early 2000s and has continued to grow in the years since.
Barnes and Noble and Amazon both sell used books on their websites. However, Half Price Books has a significant competitive advantage in this area. The company has expertise in buying and selling used books. It also offers a broader selection of used books than its competitors. Moreover, its ability to publish cheaply and sell its books gives it another competitive advantage.
4. Powell’s Book Store
Powell’s Book Store is a large independent bookstore in Portland, Oregon, United States. Founded in 1971, it claims to be the world’s largest used and new bookstore. The inventory for Powell’s is not computerized but maintained in a card catalog that includes more than four million titles. While it has an online store, most of its sales come from its physical store.
The company established itself as a destination bookstore, where people would come to browse and buy books. The success of its physical store has allowed it to expand its online presence. The company now sells through its website, Powell’s marketplace on Amazon, and AbeBooks. It takes pride in being an independent bookstore and has been an outspoken critic of Barnes and Noble and Amazon.
Barnes and Noble’s main competitive advantage over Powell’s Book Store is its scale. Barnes and Noble operate more than 600 stores across the United States, while Powell’s has just one physical store. However, Powell’s competitive advantage is its focus on creating an exceptional customer experience. The company has a knowledgeable staff, a wide selection of books, and a comfortable environment. These elements help Powell’s draw customers to its store and website.
Powell’s focus on finding and stocking rare and unusual books also gives it a competitive advantage over Barnes and Noble. The company has an extensive network of contacts in the publishing industry. These networks allow it to find and stock books that its competitors might not be able to get their hands on.
Barnes and Noble SWOT Analysis
Below is a detailed SWOT analysis of Barnes and Noble. This analysis highlights the company’s strengths, weaknesses, opportunities, and threats.
Strengths
- Barnes and Noble has a long history dating back to 1886. The first mover advantage and the company’s brand name help it to stay ahead of the competition.
- The company has a strong online presence with its website and online store. It also sells its products through marketplaces such as Amazon and eBay.
- The NOOK eBook reader and e-books platform give Barnes and Noble a competitive advantage in the digital book market.
- Its massive store network of more than 600 stores across the United States helps Barnes and Noble reach many customers.
Weaknesses
- Sexual harassment accusations against the company’s founder and former CEO, Leonard Riggio, damaged the company’s reputation.
- The company’s slow response to the shift from physical to digital books hurt its sales and profitability.
- Pressure to achieve profitability may lead Barnes and Noble to make short-term decisions that are not in the company’s best interest.
Threats
- Increased offerings in e-books and e-readers from Amazon and other companies threaten Barnes and Noble’s market share.
- Global economic and political uncertainty may decrease consumer spending on Barnes and Noble’s products.
- The company’s dependence on the United States market leaves it vulnerable to economic downturns.
- Changes in consumer preferences could lead to a decline in sales of Barnes and Noble’s products.
Opportunities
- The growing popularity of e-books presents an opportunity for Barnes and Noble to grow its sales.
- Increased demand for digital content and services is an opportunity for Barnes and Noble to expand its NOOK platform.
- The company’s brick-and-mortar stores provide an opportunity to create experiential retail spaces that draw customers.
- Barnes and Noble’s focus on customer service provides an opportunity to differentiate itself from Amazon and other online retailers.
Barnes and Noble Competitors Analysis (FAQs)
Question: Who is Barnes and Noble’s biggest competitor?
Answer: Barnes and Noble competes for market share in the retail book industry. The company’s main competitor is Amazon Books. Amazon Books is a subsidiary of Amazon.com and operates online and physical retail stores. Other Barnes and Noble competitors include Books-A-Million, Half Price Books, and Powell’s Book Store.
Question: What is Barnes and Noble’s competitive advantage?
Answer: Barnes and Noble’s main competitive advantage over its competitors is its scale. It operates a chain of more than 600 stores across the United States. The use of chaining gives Barnes and Noble a wide reach and a large customer base. Additionally, the company’s online presence and its NOOK eBook reader and e-books platform give it a competitive advantage in the digital book market.
Question: What is Barnes and Noble target market?
Answer: Barnes and Noble’s broadly categorizes its target market as America. However, it specifically targets readers, educators, and booksellers. While it doesn’t segment its target market by demographics, it does focus on marketing to adults and young adults with some level of purchasing power.
Conclusion
The competitive landscape surrounding Barnes and Noble is intense, with Amazon being the main competitor. Both companies are large, global retailers that sell physical books, e-books, and offer other digital content and services. Barnes and Noble has a few key advantages, including its scale, online presence, and NOOK. As the market shifts towards an even greater focus on digital content, Barnes and Noble will need to continue to invest in its online capabilities and to stay competitive.
Other players in the space, such as Books-A-Million and Powell’s, are much smaller but still pose a threat. These companies are more nimble and can better adapt to changes in the market. They also have loyal customer bases that could be drawn away by Barnes and Noble’s competitors.Â
Still, Barnes and Noble is the largest physical bookseller in the United States and has a strong brand. As long as it can continue to innovate and adapt, it should be able to compete successfully in this dynamic landscape.
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