Thursday, February 14, 2013

Barnes and Noble: An Omni-Channel Fumble

This morning I was looking for a reference book on Hadoop. My go-to source always starts with Amazon. I'm an Amazon Prime customer, their search is already filtered / optimized to help me find relevant books, their prices are always competitive, and usually the reviews are very useful.

Amazon Book Price

However, with some spare time today, I wanted to start reading it today. My choices therefore were to download it to my Kindle or to buy at a brick and mortar retailer. I usually prefer to have a physical copy of technical reference books, so over I popped to Barnes & Noble and found the same book at a comparable price:

Barnes and Noble Book Price

Given Amazon's usual lock-in, this was a golden opportunity for B&N to earn a piece of business that would 9 times out of 10 go to Amazon. The big font "Pick Me Up" told me the item was in stock at my local store. So, I was ready to buy it and head downtown right now. The problem arose, however, when I clicked through to buy it:

Barnes and Noble Store Pick Up

The price had reverted to $49.99. Now as much as I want to buy this book today, I'm not prepared to pay a 44% surcharge for that convenience, particularly when I have free two day shipping with Amazon via my Prime membership. While I can understand that B&N carries the additional real estate overhead and needs to somehow pay for those storefronts, frankly that's not the customer's problem. I'd be just as happy if they were flogging the books from the back of a flatbed off the side of the road if it meant I could avoid this levy.

So, here we have a situation where the brick and mortar retailer has done so much right to grab that sale in a way that Amazon cannot - immediate gratification. Barnes & Noble should win this head to head every single time. Instead, it's treating me differently based on where its inventory is ultimately being picked and is losing a sale in the process.

I saw a similar situation a few weeks ago when my downtown Banana Republic had a 40% off sale on everything, but didn't have my size on a particular item. When I got home, I was able to order the item online in the correct size but at a 30% discount. In that case, I went ahead with the sale even though I was a bit annoyed that they were extending different discounts across channels.

As retailers commit to omni-channel, the customer has to remain foremost in the decision-making process, particularly in a world where Amazon has done such a great job of locking-in most categories. In the case of Barnes & Noble, their business model is hobbled by the legacy costs of what's essentially a commoditized category and as much as I'd like to see them remain in business, if only to ensure that Amazon has competitors, it's hard to envision a scenario where they can compete effectively, particularly when they score own-goals with an otherwise loyal Amazon customer.

Curious to see if the in-store folks at B&N would do anything if I pointed out their online price, I went to the store and after pointing out the price discrepancy to the cashier, he said he wishes they'd raise the prices online to eliminate confusion in-store!! Upon telling him such a policy was doomed to fail, he pointed to the long line behind me (there was only one cashier on duty) and said that plenty people don't seem to mind such pricing discrepancies. Not exactly a very enlightened attitude but about what I expected.

Tuesday, February 12, 2013

Facebook Books: The Future of Social Reading

Facebook today announced that their next big priority categories are movies, books, and fitness. Never mind that Amazon and Apple realized those were priority categories years ago, and in the case of Amazon, as early as 1998 with their acquisition of IMDB. What struck me about the declaration is not that they are late to the game but rather that their definition of success is so modest.

Success for Facebook in any given category is to open it up to mass content sharing - gaming, news, and music were all cited as success stories and indeed, more content --> more engagement --> more ad revenue. The Facebook flywheel is a well oiled machine by now with likes and recommendations. However, i can't help but feel that it could be so much more...

In the case of books, Facebook seems to have missed an opportunity to innovate with the acquisition of Push Pop Press. Whether that was because of IP issues is unclear, but instead of solely thinking about recommendations on what books to read, it seems that there's an opportunity to optimize the activity of book reading itself and completely redefine the category. In other words, a recommendation engine focused on intra-book comprehension AND inter-book discovery would be much more useful and valuable.

For example, it's well established that people learn in different ways. Further, research shows that our preferred learning style is situationally dependent versus an immutable fact. So, what if the future of books is adaptive where the content is dynamically served, based, in part on the feedback loop we create? Metrics to consider could include;
  • Descriptive Metrics - average words read per minute, dwell time per page, highlights per 1,000 words, average session length, dictionary usage, books read per month, etc.
  • Interactive Metrics - built into the books could be optional polls and pop-up quizzes that test comprehension, the result of which would influence the content to follow.
Since it's Facebook we're talking about, all of the above metrics could of course be shared back out to each user's news feed, so instead of just knowing that Jason is reading A Scots Quair, I could also share notable quotes from the book, and publish the results of various quizzes I'm taking as I read. We could go one step further and Facebook could create dynamically assembled book clubs where I can chat with other people who are reading the same book as me at the same time. 

The other big opportunity is to view interactive books as a launching-off point to dynamically linked 3rd party content. Continuing with the A Scots Quair example, Facebook knows my hometown is Dundee, Scotland which is near the setting of this book. So, when I highlight the word Dundee in the book, I get a set of personalized search results - maybe an offer to buy Dundee University gear or a link to their Facebook page, whereas someone else highlighting the word who's not from Dundee gets more tourist-oriented content.

Regardless of monetization opportunities, the key point is that we're talking about an optimized reading experience based, in part, on Facebook's social graph. There are undoubtedly many who would argue that reading should remain a solitary activity, but one only need to look at how Twitter has augmented the TV viewing experience to understand that the future of reading is social and dynamic. My bet is that it will be intra-book in addition to the more generally accepted inter-book experience.