Does BN Nook Compete with Amazon or Starbucks?

by Steve McKee

BN Nook in Competition with Amazon Kindle or Starbucks?There has been a flurry of news lately about Barnes & Noble’s new e-reader, the Nook. It will compete head on with Amazon’s Kindle and Sony’s Reader, offering additional features such as limited book sharing and newspaper subscriptions. If successful, of course, those features will be matched by the Nook’s competitors, just as Barnes & Noble has matched their price points.

It’s fascinating to watch these three powerful companies–the dominant bricks-and-mortar bookseller, the dominant online bookseller, and a long-dominate electronic industry player – compete in this new arena. And word is that Apple’s e-reader isn’t far behind, which will further mix things up (and will be good for us all).
I couldn’t help noticing, however, a little aside in a recent Wall Street Journal article about the Nook. The article was talking about how Nook users would be able to receive discounts and other special offers when they walk into the store, a smart use by Barnes & Noble of its one true competitive advantage over Amazon. But the piece went on to say this: “Eventually, the company says, customers will be able to read entire e-books for free inside the physical store.”

Read entire e-books for free? Why would Barnes & Noble want to give away content? How’s this for a reason: the company may have up its strategic sleeve the idea that it can become the other Third Place.

Starbucks has always been an appealing place to linger, and many people go there to enjoy a good read as they nurse their lattes (most Starbucks locations sell a handful of newspapers and books to encourage just such behavior). While Barnes & Noble has in recent years been adding coffee bars to many of its locations, they have always seemed to be somewhat of an afterthought and secondary to the company’s primary purpose of selling books. But by offering free in-store content with the Nook, Barnes & Noble seems to clearly be saying that this is they place they want people to linger. And Since none of us can be in two places at one time, Starbucks and Barnes & Noble may increasingly butt heads.

It’s a fascinating world in which we live, where two previously unrelated companies can wake up and find themselves arch-competitors, and it’s fun to watch such changing dynamics unfold. Keep your eye on Barnes & Noble as it continues to take advantage of its physical locations (the one thing its current big competitor, Amazon, can’t match). In combatting one foe it may have just picked a fight with another.


Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of “When Growth Stalls: How it Happens, Why You’re Stuck, and What To Do About It.” Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

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