The Incredible Shrinking Barnes & Noble

“The Incredible Shrinking Barnes & Noble.” This was the LA Times‘ blog post yesterday. I like it and I have stolen it. It speaks volumes to the future of the mall. Entertainment centers for browsing shoppers are shutting down.

Barnes & Noble sees 30% fewer stores in the next decade. The bookseller had 726 stores in 2008, 689 stores in 2012 and in 10 years this will drop to 450? Perhaps this is optimistic? The certainty is that there will be much shuttering.

Barnes & Noble’s projected closings and Target’s  new price-matching policy are all signs of retail in distress. The trend toward mobile shopping is likely to have a lasting impact on the retail landscape.

The physical bookstore could become a thing of the past.

With the mobile consumer in mind, a yoga studio could sell books about spirituality and enable customers to tap their phones to order a physical or digital book in a context-rich environment. The same is true for a doctor’s office, a movie theatre and other locations.

Barnes & Noble executives are undoubtedly aware – as Borders executives before them – that the 2010s are eerily reminiscent of the music industry in the 2000s. Books, reading, and commerce behaviour has changed.

The relationship between shopper and store has changed.

Does this mean good riddance to bookstores, publishers, agents? Perhaps there is a new, more efficient order in town? Perhaps a new, streamlined business model would be both good for consumers and good for the industry long term?

Unquestionably the market and mall is primed for new disruptive models. Amazon coming in with Apple-like book genius bars? New purchase, delivery and consumption models that live between the store and the Amazon cloud?

Stay tuned!


Why Obama Won (on Big Data) in 50 words

  • Grew his analytics war room 5x (over 2008)
  • Hired supermarket sales promotions “Chief Scientist”
  • Separated out the data war room
  • Rated consumer persuadability . . .
  • Targeted TV ads
  • Targeted phone calls & direct mailings
  • Targeted door knocks
  • Targeted social media
  • Opened wallets = $1 billion
  • Drove turnout = Swung swing states

Black Friday Mobile “Mall Buster”

By Gary Schwartz

As I sit thoughtfully, wedged between Black Friday and Cyber Monday, I have a mobile premonition that times are a’changing.

Black Friday may be becoming Cyber Friday – which would mean a dark Monday for many retailers and malls in North America.

On November 28, 2005, started discussing an online shopping phenomenon following the Thanksgiving weekend that it coined Cyber Monday. After fighting for sale items in the aisles, shoppers starting surfing the web for remnant deals.

However over the past year, Matt Shay and his team at the National Retail Federation should realizing that the online shopping cloud (that was politely situated on a separate day with separate deals for online shoppers) is now disruptively moving into our primetime shopping calendar.

While most mobile shopping on Black Friday still tends to be mobile marketing focused: Price comparison hunting with Amazon PriceCheck, ShopSavvy or eBay’s Redlazer App; Mobile couponing clipping for show-to-save deals that drive impulse door swing into the mall and retail store.

These shopping APPs and mobile web services are great for hardcore price hunters but the small-screen experience is not optimal. The mobile phone may help the shopper better navigate high value items such as shoes or electronics in their local mall. The mobile phone may steer the shopper to a purchase or may rudely interrupt an in-aisle purchase.

But what is beyond price hunting? If a PriceCheck shows a better deal online, many folk are likely to close their phone and choose to buy the item that evening on the web on a large screen in the comfort of their home.

This is about to change.  There is a new breed of shopping disruption entering the market.  Apple’s iPad has hybridized:

  • mobile & fixed internet
  • small screen & large screen
  • impulse & thoughtful shopping

Kindle Fire: The Mall Buster

The new commerce-tablet is a portable mall buster. The iPad allows for an elegant portable internet experience, Apple focus continued to be the APP economy and digital checkout on iTunes.

Other tablets have entered the market on Apple’s terms and had mix results  . . . until the Amazon’s new tablet Kindle Fire. The Kindle Fire is all about one-click commerce. The device is optimized for in-store, in-mall deal hunting, price comparison and most importantly one-click checkout.

Amazon has always been a commerce disrupter. They battled and beat the book store. Now they are taking on the entire mall.

Amazon reinvented book browsing. In 2007, we saw the first Kindle, the harbinger of a new power game and more importantly a new relationship with the mobile consumer. In order to promote its Kindle device, Amazon sold electronic books below wholesale prices.  A tactical loss. Owning the commerce platform was the ultimate reward for Amazon.

Amazon won the book battle: Borders bookstore went out of business and Barnes & Noble opened coffee shops and began selling household furniture.

The Kindle Fire (which combines book commerce with the immersive Kindle experience) is the final commerce frontier.  Amazon is so confident in the commerce that they will generate in the mall that they are selling the unit at a loss ($199 while the unit cost is $210).

Amazon’s One-Click commerce along with VISA’s service, Billing Revolution’s Single-Click and a flood of cloud commerce options will enter the market this year.

What does this mean to the great American Black Friday tradition?

It means that shoppers on Friday, November 30th, 2012 may move from comparison price hunting in the mall to disruptive purchasing in the cloud. No longer are Cyber Monday and Black Friday neatly separated: the cloud is in the mall . . .  to stay.

Dark Clouds

We anticipate over 5000 store closings in 2012 – nearly 40% up from 2011. Many of these closings will be due to continuing shopper malaise; however, as in-mall cloud shopping accelerates, stores particularly in the apparel, shoe and electronics vertical will need to reinvent themselves. They will need to focus on breaking down the channel barriers between their online presents and the physical store. Tackling “cross-channel disconnect” will be key to survival.

Stores will need to focus on the non-Black-Friday days – all 364 of them and work to build a loyalty, one-to-one relationship with the shopper using their phones to bridge the store experience with the store’s cloud experience.

Content curation, sensory experience, customer service and love are all the store has. It will not win on price alone.

Amazon T-Commerce: Cloud Meet Mall!

For all the science of shopping, even Paco Underhill, the retail guru, would tell you that designing an optimal commerce experience is a fairly simple proposition. Words like frictionless, seamless, impulse, uninterrupted, and accessible come to mind: One-Click Cha’Ching?

But between the idea and the reality falls an unwieldy shadow. With the launch of Amazon’s new Android tablet, reportedly this October, will Amazon’s signature one-click checkout meet portable desire and allow for an optimal commerce experience for the impulse shopper on the go?

In a world where Amazon has go far beyond the book, is this the new Kindle for the shopper? Will a low price point unit of $199 (sold under the manufacturing cost of $210) bundled with commerce wallet toolkit including reviews, consumer recommendations, shopping comparison and a fairly simple checkout bring the cloud down to the shopping mall?

Shopping Disruption

But all these shopping innovations, tools and shortcuts beg the question of what is the ideal and optimized mobile checkout? VISA “Square” has democratized point of sale of plumbers and pool cleaners across America. It works because it offers a simple, cost-effective solution that is riding the existing commerce rails. “Square” allows for a plastic card swipe and serves up a merchant account through the audio jack on the phone. Everyone is now a store.

VISA and PayPal continue to work to create similar quick-checkout for the small screen, eliminating the clumsy data form fields needs to check out on the large screen desktop that make for abandoned m-shopping carts all over cyber space. VISA’s purchase of PlaySpan is a perfect example of frictionless commerce engineering. PlaySpan (before it was acquired by VISA) allows gamers to buy virtual swords and pumpkin seeds for their virtual battle grounds and farms without leaving the game. VISA is using this same technology to launch a quick check for all those folk for whom real-world shopping is a “game”. We should see this roll out in 2012.

Google’s M-Wallet promises TAP and exit shopping at your local store. The problem here is that for all the hype, NFC-phones are only entering the market now and few retailers (outside of McDs) has contactless POS. I love the bricks and mortar dream-scenario of TAP purchase using your phone for payment, loyalty, affinity and marketing. However, I will remind the reader that self-checkout was a sexy idea twenty years ago and took two decades to start to appear in supermarkets in the US. The retailers are unlikely to pay soon to retrofit their existing DOS-like POS when the “reward” of quick-flowing aisle and proximity marketing is yet to be proven. Until the ROI calculator can be taken out, Google maybe waiting at self-check out.

VeriFone is answering the call by designing Swiss army knife units like PAYware that allow for mobile point-of-sale (mPOS) in store and can accept magnetic swipe, CHIP&PIN, NFC; it can scan bar codes and enter promotional PINs. Companies like GlobalBay have integrated to all major POS vendors (SAP, Epicor, Oracle, etc.) to allow this unit to mobilize the existing cash register without retrofitting it.

Apple has yet to show its NFC card. When they do, look for NFC to meet iTunes checkout. There is a tremendous opportunity for Apple to take over the traditional media space with TAP2SHOP service riding on it iTunes’s quick checkout. Until then . . . we have Amazon’s Tablet.

Amazon T-Commerce

Tom Daly, head of mobile globally at Coca Cola is focused on making their products “within arm’s reach of desire”. If Amazon can allow their customers to have a commerce tablet that enables them to shop where they want, they will succeed. By Q4 next year, look for Amazon consumers all over America, side-saddled in the waiting area of the mall after comparison shopping in their favorite store (showroom) checking out in the cloud.

Will VISA and PayPal design more optimized digital checkout? Yes. Will Google’s Wallet continue to expand retail doors and eventually become part of our shopping experience? Yes. But until then, Amazon will disrupt the mall and dominate the cloud shopper.

(If this all seems a little depressing for the store owner. Here is some advice. While Amazon focused on T-Commerce on a portable screen you need to focus on M-CRM on the small screen. You need to start owning the mobile two-way relationship on your shopper’s “handheld” and use the handheld in-aisle to drive tonnage.)