Barnes and Noble, Inventory Management

Barnes & Noble Still Profitable Thanks To Better Inventory Management

Fortunately Barnes & Noble is not facing the same demise as their tablet device, Nook. According to the New Yorker, B&N has remained profitable thanks to efficient operations and inventory management. As a result, the bookseller is limiting waste and superfluous inventory and ensuring effective compliance of all campaigns.

Barnes and Noble, Inventory Management

From the article:

To begin with, B. & N.’s retail business still makes good money, and, though its sales fell last year, its profits actually rose. Its operations, thanks to better inventory management, are more efficient: it can make more money while selling fewer books. The Nook is the only part of the business that’s losing money. Being a book retailer isn’t easy—thanks, above all, to Amazon—but Borders’ bankruptcy, in 2011, left B. & N. without a major national competitor. “In this market, you could actually pick up market share simply because you’re the only major bookseller left,” John Tinker, a media analyst at the Maxim Group, told me. And B. & N. has generally avoided the expensive, long leases that can drain a retailer’s cash flow; many of its leases are short—which gives it flexibility in terms of moving or downsizing—and, since its stores generate foot traffic (which is good for surrounding stores), it has considerable leverage with landlords. B. & N., which still has more than six hundred retail stores (and six hundred and eighty-six college bookstores), also retains considerable leverage with publishers. As a recent report from the Codex Group showed, browsing in stores is still a far more common way of finding new books than either online search or social media. So publishers have a stake in B. & N.’s survival.

There are plenty of things B. & N. could do better, of course. Its Web site could be sportier. Its stores, publishing people gripe, are too cluttered, often with non-book merchandise, and don’t do a good enough job of showcasing its key product. (The demise of the Nook should help in this regard, since those giant Nook display booths took up a lot of floor space.) It might also be time for the firm to embrace more innovative ways of pricing and selling books; Peter Olson, the former C.E.O. of Random House, has suggested that B. & N. could bundle e-books and print copies, or offer volume discounts. Motivated, personalized customer service would also make a difference. The obvious model here is the experience at Apple’s retail stores. But B. & N. could also look closer to home. Independent bookstores are now thriving, thanks in large part to their close ties to both publishers and customers. “Stores that can help you not just find what you’re looking for but also help you discover books you haven’t heard of are still very valuable to readers,” says Daniel Raff, a management professor at Wharton who’s written an in-depth study of Borders and B. & N. This suggests that, instead of succumbing to the temptation to reinvent itself, B. & N. should focus on something truly radical: being a bookstore.