Post by Raven on Apr 16, 2008 16:54:49 GMT -5
Will Barnes & Noble win the book wars?*
Long criticized for driving local shops out of business, mega-booksellers are now fighting each other and even-bigger competitors. Barnes & Noble could win by becoming your 'local' bookstore.
The smaller shops couldn't compete with the giants' lower prices. Now, the two big-box booksellers are fighting each other in a bloody price war.
At the same time, they're taking flak from even-bigger retail giants Wal-Mart Stores (WMT, news, msgs) and Costco Wholesale (COST, news, msgs), which do a brisk business in discounted best-sellers, and from online rival Amazon.com (AMZN, news, msgs).
Even the experts don't know how this tale will end. Wall Street analysts have mostly stepped to the sidelines with "neutral" ratings on the mega-bookstores.
But if I had to write the ending today, I'd say Barnes & Noble, with 800 stores in 50 states, will prevail. It has the financial strength. And it will win over book lovers, if not the purists who mourn the local shops, with its own brand of community created through in-store cafes, visits from authors and kids' sections that invite families to plop on the floor and stay awhile.
"What other store can you go into and feel comfortable sitting on the ground?" asks Abhay Deshpande, a portfolio manager at First Eagle Funds, which owns shares of the bookseller. "The idea is to make it a comfort zone. They want you to stay because they think eventually you will make a purchase. If you can make shopping a delightful experience, then it improves the value of your franchise."
Here's look inside the bookstore battle.
No sympathy
The giants likely won't get a lot of sympathy from the ranks of book aficionados. For their take, rent the 1998 film "You've Got Mail," in which Tom Hanks portrays a manager at a predatory New York City mega-store that's strangling an independent neighborhood competitor called The Shop Around the Corner.
That plot line has played out all across the country as big-box book retailers have pushed aside independents. Purists aren't happy about that.
"Those places were charming and wonderful, and the people who ran them were quirky and unique. They would hand-sell the books they personally loved in a way that is harder to do in a chain store," laments Shel Horowitz, an industry veteran and the author of "Grassroots Marketing for Authors and Publishers."
The market share of independent bookshops has fallen to 25% from 35% in the past five years, estimates Deshpande. That's not a great development for anyone who likes books from lesser-known authors and small publishers, the kind independent shops are more likely to stock.
"Barnes & Noble is really complicit in pushing the industry to emphasize blockbusters and best-sellers," says indie author April Hamilton, who has successfully self-published two novels using tools provided by Amazon.com. Horowitz says Barnes & Noble has contributed to "homogenizing America's tastes."
*Click title for full article
Long criticized for driving local shops out of business, mega-booksellers are now fighting each other and even-bigger competitors. Barnes & Noble could win by becoming your 'local' bookstore.
The smaller shops couldn't compete with the giants' lower prices. Now, the two big-box booksellers are fighting each other in a bloody price war.
At the same time, they're taking flak from even-bigger retail giants Wal-Mart Stores (WMT, news, msgs) and Costco Wholesale (COST, news, msgs), which do a brisk business in discounted best-sellers, and from online rival Amazon.com (AMZN, news, msgs).
Even the experts don't know how this tale will end. Wall Street analysts have mostly stepped to the sidelines with "neutral" ratings on the mega-bookstores.
But if I had to write the ending today, I'd say Barnes & Noble, with 800 stores in 50 states, will prevail. It has the financial strength. And it will win over book lovers, if not the purists who mourn the local shops, with its own brand of community created through in-store cafes, visits from authors and kids' sections that invite families to plop on the floor and stay awhile.
"What other store can you go into and feel comfortable sitting on the ground?" asks Abhay Deshpande, a portfolio manager at First Eagle Funds, which owns shares of the bookseller. "The idea is to make it a comfort zone. They want you to stay because they think eventually you will make a purchase. If you can make shopping a delightful experience, then it improves the value of your franchise."
Here's look inside the bookstore battle.
No sympathy
The giants likely won't get a lot of sympathy from the ranks of book aficionados. For their take, rent the 1998 film "You've Got Mail," in which Tom Hanks portrays a manager at a predatory New York City mega-store that's strangling an independent neighborhood competitor called The Shop Around the Corner.
That plot line has played out all across the country as big-box book retailers have pushed aside independents. Purists aren't happy about that.
"Those places were charming and wonderful, and the people who ran them were quirky and unique. They would hand-sell the books they personally loved in a way that is harder to do in a chain store," laments Shel Horowitz, an industry veteran and the author of "Grassroots Marketing for Authors and Publishers."
The market share of independent bookshops has fallen to 25% from 35% in the past five years, estimates Deshpande. That's not a great development for anyone who likes books from lesser-known authors and small publishers, the kind independent shops are more likely to stock.
"Barnes & Noble is really complicit in pushing the industry to emphasize blockbusters and best-sellers," says indie author April Hamilton, who has successfully self-published two novels using tools provided by Amazon.com. Horowitz says Barnes & Noble has contributed to "homogenizing America's tastes."
*Click title for full article