This is not the best of times for Barnes & Noble. B&N shares have lost about 50% of their value in the last couple of weeks and it doesn’t look like B&N can find a buyer, regardless of the low price. Not surprisingly, there is a growing concern that B&N may eventually follow Borders and file for bankruptcy.
B&N is in a search to redefine its business model. They really don’t have a choice as the traditional brick and mortar bookstores model doesn’t work that well anymore. It’s true they got the Nook, but they also have 705 stores with 18.4 million square feet (not including B&N College stores) they need to transform back into an asset to stay in business.
So here is an idea – how about adopting a green strategy to avoid bankruptcy?
One of the biggest challenges B&N is facing is how to increase sales in its 705 stores amid the growth of online purchasing. No matter how many stores B&N will end up with (and apparently it will be much less than the current number), it looks like they need to find really convincing reasons for customers to visit. That is why I believe they need to start focusing on the “New Consumers.”
There are 70 million “New Consumers” according to BBMG’s latest report, which identified them as “values-aspirational, practical purchasers who are constantly looking to align their actions with their ideals.” BBMG found that New Consumers tend slightly to be more youthful, educated and female. They are also early adopters on key trends and tipping point influencers among their friends, family and peers. And they read books.
So how can B&N become the book retailer of choice for this desirable group? Well, according to BBMG, the New Consumers are looking for a triple value proposition, “uniting practical benefits (e.g., cost savings, durability and style), social and environmental benefits (e.g., local, fair trade and biodegradable), and tribal benefits (e.g., connecting them to a community of people who share their values and aspirations).” Now all B&N has to do is figure out how to meet these needs.
Of course it’s not an easy challenge, but none of B&N’s major competitors (i.e. Amazon and Borders) address these consumer needs. The only players in the market that actually make an effort to address the triple value proposition are independent bookstores, which may put greater emphasis on the tribal benefits. The problem is that customers in independent bookstores often need to make trade-offs for example, by paying a higher price on books. That can be a barrier for many New Consumers, especially when their budgets are tight.
B&N can start this journey by fundamentally redefining itself as a sustainable retailer that is working to achieve triple bottom line goals, including specific environmental and social targets. These goals should address B&N’s main environmental and social impacts and show B&N really means it and is not just looking for marginal changes to accomplish a status of green brand. In other words, no greenwashing please!
What B&N can do? Plenty of things. How about making the stores more energy efficient? Greening their operations? Committing to forest conservation (just like Indigo in Canada)? Becoming a center of “green” knowledge and increasing customers’ awareness on green issues? Strengthening their connection with local communities by becoming collection points for CSA programs for example or offering a space for community meetings?
To strengthen its brick and mortar stores B&N should also look into becoming the Mecca of “green” items – instead of selling games and toys, competing with well-established brands, they can offer a unique added value that cannot be found anywhere else – a green section in every store which includes a variety of “green” items, from solar backpacks to some of Terracycle’s cool products. With the right items and the right incentives (e.g. major discounts to in-store sales) this can become an effective way to attract New Consumers to the stores, even when they’re not interested in purchasing a book.
B&N can also look for innovative ways to integrate its digital and brick and mortar strengths to offer unique experiences in the stores, like providing store customers with exclusive materials available only at the stores. For example, “Climate Capitalism: Capitalism in the Age of Climate Change” is to be released on April 12, but wouldn’t it be cool if visitors to B&N stores could have access to the book and read it (only) there on their Nooks or Kindles four weeks before the rest of the world gets to read it?
There are many more ideas that can eventually generate the triple value proposition for B&N. It’s not a short journey and probably not an easy one, but if they can do it right and incorporate sustainability into their core of business, it can be the key for recreating their business and securing their future success. Sustainability is not a magic bullet but right now it may be B&N’s best chance to avoid bankruptcy.
Raz Godelnik is the co-founder and CEO of Eco-Libris , a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.