B&N to Stock More eReaders in Full Boutiques This Fall

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Barnes & Noble is preparing to expand the number of eReaders it carries and set up full eReader boutiques within its stores this fall.

On a call with analysts today, the bookseller also said it has gained a 20 percent share of the eBook market after launching its digital bookstore only a year ago, making it the second largest U.S. eBookstore and it believes its Nook to be the fastest selling eReader on the market.

Sales of the new $149 Nook WiFi are already outselling expectations, as is the original Nook, it said.

Chairman Len Riggio revealed the bookseller plans to expand the current Nook display you see when you enter a store into a full eReading boutique that emulates Apple’s retail stores. “What you’ll see in our stores this fall is a bigger presentation of reading devices than you currently see in the single counter…that it will be more like a boutique…. and remember, as more readers come into the marketplace, we will try to create the same type of excitement one sees in the Apple stores…you will see a fully stocked department with reading devices of all sorts; a full department.”

The company told analysts repeatedly that it will use its advantage of owning 1,400 bookstores to help sell the Nook. It also said it will compete with newcomers like Google because its eBookstore is product- and OS-agnostic and now works on over 400 devices.

The bookseller expects to grow its eBook share to 25 percent by 2013, as it pushes its agenda of “a Barnes & Noble bookstore in every pocket,” on as many devices and operating systems as possible.

B&N’s eBookstore is now the second most downloaded app on the iPad and “more amazingly” is the 17th most downloaded app on the iPhone, said the company.

Over the next 3 years digital eBooks will be a $3 to $5 billion revenue opportunity for the company, it said.

Also, the bookseller reported that once a customer buys a Nook, his spending with B&N increases 17 percent in revenue and 70 percent on a unit basis.

Digital sales will account for more than 100 percent of B&N’s growth over the next several years so the bookseller is investing very heavily in its Nook and eBook strategy. It will invest $140 million in digital books and eReaders in the next 12 months. Part of that expense is converting books to eBook format and working with newspaper publishers to convert their content to digital.

B&N said its sales of the Nook at Best Buy help it reach a new customer. Best Buy’s print circular alone reaches 90 million homes and the retailer is installing B&N’s eBook software on devices it sells.

B&N also plans to begin stocking more products apart from books including toys and games and some electronics devices. It is expanding its foray into sales of used products and recently added used DVDs and CDs. It will add peer-to peer capability for selling used goods on its website this fall.

The announcements were made as the bookseller presented its fiscal Q4 2010 results (ended May 1, 2011) showing a larger-than-expected net loss of $32.1 million as the company spent heavily on the Nook and eBooks. See Reuters for more financial information.
Source: CEoutlook with reference to Reuters.

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2 Comments

  1. If you look at the date for those “slow” reviews, most of them are quite old (yes, three or four months ago is in fact quite old). nook has received some much needed software updates to increase the loading and page-turning speed to a more praiseworthy level. The touchscreen you so quickly jump to decry attracts quite a bit of attention with the current market. Everything is touch-based LCD now, as users are growing more accustomed to the ease of access it brings when they can simply drag the screen to scroll through their choices, rather than click a button repetitively or worry about tiny keyboards. I think the new posts speak for themselves. Everything after April only boosts nook’s acclaim.

  2. What 400 devices? Between Amazon and B&N they have driven almost everybody out of the device business. This seems a huge misrepresentation of the facts.

    Yes, they have 20% of the market because they are selling devices at a loss! So Market Share goes up as they bleed money.

    Let us look at the device itself. It has been called by other reviewers: AGONIZINGLY SLOW. With the exception of a little LCD screen that eats up power and otherwise lends nothing to reading books, it lacks all innovation and digresses eBook Readers at a time when eBook Readers NEED creativity.

    So, am I charmed by numbers magic and false claims? NO!!

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