Fight the power: Buy at BN.com, not Amazon

You might have noticed that about three months ago I started hot-linking book titles to the Barnes & Noble website rather than Amazon. I also stopped buying my books from Amazon and instead started funneling my literary dollars to the Barnes & Noble website BN.com.

Not only that, I’m going to buy a Nook from B&N, not a Kindle from Amazon.

I made the switch after Borders went into bankruptcy and I read about the financial problems being suffered by B&N. Suddenly, it seemed Amazon was going to establish a monopoly over the book world.

Not on my watch.

Amazon is a great company. I like Amazon. Always have. Still, there’s no advantage to you or me if we stand idle while Amazon drives all competitors over the cliff.

Americans deplore concentrations of power. We always have. Amazon is doing exactly that – concentrating too much bookselling power. The Seattle-based company’s business strategy suggests domination is its aim.

Take the company e-reader, the Kindle. Many people don’t realize that the Kindle is a proprietary system, meaning e-books bought for the Kindle will not work on other e-readers, such as the Nook, iPad and Sony Reader. The e-books available at your public library will not run on the Kindle. They will run on the other aforementioned e-readers because they are open systems. Unlike the Kindle, they do not lock others out.

Again, Amazon is a great company. But so is B&N. So is Powell’s Books in Portland, Oregon. I still love bookstores and don’t want to see them disappear entirely.

Fortunately, B&N is making a lot of smart business moves in making its financial comeback, according to Stephen Wunder, managing director of New Markets Advisors. Wunker makes that argument in a recent blog post he wrote for Harvard Business Review headlined Barnes & Noble’s smart strategy. (Wunker is also author of Capturing New Markets: How Smart Companies Create Opportunities Other Don’t. (Click on that book title to buy a copy at BN.com.)

Wunker points out that, while B&N’s biggest brick-and-mortar competitor, Borders, has ended up in bankruptcy, B&N is creating a credible growth plan in the midst of upheaval. Wunker says B&N is pursuing four strategies to move boldly into the future.

Competing with its legacy business. Rather than swim against the e-book tide, B&N has embraced the inevitable with its Nook e-reader. Other brick-and-mortar booksellers have offered e-books online, and Borders licensed a reader of its own from an outside company called Kobo. But B&N is the only legacy retailer to create its own device. And rather than offer a single reader as a defensive move, it took the offense with a frequently updated family of products that are promoted prominently in-store. The company has moved so aggressively into the reader space that its e-book market share has grown to 26%, and Consumer Reports has rated the latest iteration of the Nook the best reader in the industry.

Focusing on target customers. While the Kindle tries to be versatile, toting around PDFs from a user’s PC and allowing for easy text annotation, the Nook Color has more modest aims. It is a device focused tightly on reading and, as a result, does a superior job of displaying glossy magazines and children’s books. In its functionality, design, and marketing, the Nook takes aim at women who love to read.

Experimenting relentlessly. B&N has long been in the vanguard of the bookselling industry. It was one of the first to discount bestsellers, publish its own titles, offer authors self-publishing options, create super-stores, and put coffee shops in its establishments. More recently, it has succeeded with selling toys and games. The company has also made its share of missteps, such as buying the mall-based bookstore chain B. Dalton whose shops have now been closed. In an industry stretching back centuries, it readily tries out new formulas and adjusts its approaches based on careful listening to marketplace reactions.

Staying humble about what can be known. While B&N has chosen a sensible target market of frequent readers, it does not pretend to know exactly how their habits will evolve. Any big retailer makes long-term financial forecasts to assess the viability of store sites, yet B&N understands that its projections must be exceptionally uncertain these days. It has typically taken 10-year leases on stores. Yet, with more than 100 store leases up for annual renewal the company is negotiating short-term contracts that allow it to close stores quickly. Sometimes companies are lauded for making clear predictions about a hazy future, but the bravest and most honest forecast may be, “We just don’t know.” B&N is willing to incur higher lease costs in the near-term to provide it with much-needed flexibility over the medium-term.

Until the balance of power becomes more equitable, fight the monopoly. Buy at Barnes & Noble and other booksellers, not Amazon.

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