Barnes & Noble CEO: Focus on Experiences vs. Price
Retailers today have to differentiate themselves with experiential products and services, since most can no longer win on price.
This was the key message delivered by Ron Boire, CEO of Barnes & Noble (B&N), during a fireside chat with James Green, CEO of Magnetic, during a session at eTail West yesterday. During the chat, Boire touched on a wide range of topics, including why he came to B&N, omnichannel and digital trends that B&N is looking to execute on, e-books, competing with Amazon.com, and more.
For starters, Boire, who joined B&N in September 2015 after stints at Sears Canada and Brookstone, said one of the reasons he was drawn to the bookseller is because he’s a true book lover.
“I grew up on a farm in upstate New York in a house full of paperbacks,” Boire said. “Occasionally we’d get a beautiful hardcover book, and it always was such a great thing.” What’s more, being at B&N makes Boire “feel like he’s home. It took me a long journey to get here, but it's a fantastic environment to be in.”
Boire also discussed physical books vs. e-books. “We think our customers will want both physical and digital books going forward,” he said. “We’ve invested a great deal of money in e-books, but I think the consumer is figuring out what their balance is between having the jewel of a physical book and having the instant access and portability of a digital book.”
On the subject of Amazon, Boire was straightforward: B&N is in a different category than the online retailer. “There are two types of retailers: ones that compete on price and ones that are focused on experiences, and we're an experiential retailer,” he said.
For example, Boire said B&N serves its community with 100,000 events in its stores each year, such as author visits and children's events.
“We’re a community where a consumer can come in, have a cup of coffee, wander through the bookshelves, sit in a leather chair and flip through a magazine, and no one in that store is going to ask you to leave,” Boire said.
The strategy is working. “We’re actually buying more chairs [for our stores],” Boire said. “You can’t imagine an environment out there where you can spend hours in a store and no one asks you to buy anything. But that's why our Net Promoter scores are in the high 80s.”
However, taking a unique in-store experience online can be a massive challenge for retailers, Boire said. B&N is taking the challenge head on: the company is opening up a prototype store later this year that will bridge the divide between the online and offline experience, Boire said. He didn't offer any more details.
Boire also said that B&N is reworking its loyalty program so that members receive a more personalized experience online. In addition, B&N built a new website last summer and the company has brought on a strong digital team to map out its digital and omnichannel future.
Ultimately, however, “the more we can offer around the [B&N] experience both online and offline, the better we will be," Boire noted. "Unless you have the infrastructure to compete on price, it’s better to focus on experience.”