Businessmodel of Barnes & Noble

Customer Segments

Barnes and Noble serves a large consumer-focused customer base. The Company serves a broad demographic of general consumers, with its physical retail stores offering a broad range of products. This includes:

• Books, spanning all genres and catering to male and female readers of all ages, including students, professionals, and casual readers;
• Toys and games, for children and families; and
• DVDs, including movies and television shows across all genres and target demographics; Barnes and Noble’s physical business exclusively serves customers across the US, while its NOOK operating segment serves a more international customer base through its digital sales channels.

Value Propositions

Barnes and Noble provides value to its customers in the following ways:

• It broad catalogue of products, with the Company offering a broad range of products, including books across all genres, as well as DVDs, toys, games, and magazines, serving a wide spectrum of consumers;
• Its accessibility and presence, with the Company operating a wide-reaching network of physical retail outlets across the US, as well as digital channels, notably its NOOK e-reader platform;
• The atmosphere and design of its stores, with the Company providing a comfortable and inviting atmosphere with ample public space, a cafe that offers drinks and snacks, and public restrooms, with a view to establishing stores as a public meeting place; and
• Its pricing and discount strategy, with the Company offering various discounts and special promotions throughout the year. ### Channels

Barnes and Noble operates a website at www.barnesandnoble.com, through which it provides information on its product catalogue, locations, and other products. The Company also operates digital channels, including an online store through which customers can purchase and arrange the delivery of physical books, as well as a fully digital platform under its NOOK brand. The NOOK platform offers a library of electronic books that can be purchased either online or via mobile devices and read both through dedicated NOOK devices and via NOOK apps for tablets and mobile phones running iOS and Android systems.

The majority of Barnes and Noble’s physical sales are made through its network of 640 retail stores across the US, through which the Company’s sales and customer service staff deal directly with customer. Barnes and Noble also operates its own distribution channels, including two distribution centres in Monroe Township, New Jersey and Reno, Nevada, with a combined capacity of 1,745,000 square feet.

Customer Relationships

Barnes and Noble provides many of its products to customers on a self-service basis. This includes its online store, which allows customers to purchase book and other products, organise deliveries, track orders, and manage customer accounts without interacting with members of the Company’s staff. The Company’s NOOK platform enables customers to make purchases on a self-service basis, browsing titles through mobile devices, tablets, and e-readers and making purchases directly, with books delivered automatically and instantly to the customer.

Barnes and Noble also operates a team of sales and customer service representatives who are able to provide a greater degree of personal car to customers through its network of physical outlets. These staff members work with customers in finding products and providing advice. The Company also provides ongoing support after sales have been made, offering a range of online resources such as FAQs, shipping and returns information, and help articles, and operating a customer support team which can contacted over the phone, by email or via a live chat service.

Additionally, Barnes and Noble interacts directly with its customers through its email newsletter and its social media accounts, including with Twitter, Facebook, and Pinterest.

Key Activities

Barnes and Noble operates principally as a bookseller. It operates a multi-channel distribution system, through two core operating segments: Barnes and Noble Retail, which comprises the operations of its physical book stores and cafes, including sales of books, DVDs, toys, and games; and NOOK, which comprises the Company’s digital business, specifically its sales of e-books, e-readers, and accessories.

The Company offers books across all genres and age ranges mass market paperbacks, children’s books, textbooks and course-related materials, bargain books, magazines, gifts, cafe products and services, educational toys and games, and music and movies. The Company also offers textbook rental service.

Key Partners

Barnes and Noble works with a range of partners across its two operating segments, with a view to providing its customers with the best possible services. These partners include:

• Supplier and Vendor Partners, comprising suppliers of services, technology and resources, which support the Company’s core operations;
• Strategic and Alliance Partners, comprising a range of companies across multiple sectors, notably within the technology space, with which the Company shares resources and collaborates on joint projects;
• Affiliate and Marketing Partners, including partners under the Barnes and Noble Affiliate Program, that earn commissions in return for generating sales and traffic for the Company; and
• College Partners, comprising a range of universities and colleges, with which the Company collaborates in operating campus bookstores targeted at students. Two of Barnes and Noble’s notable strategic partners are Starbucks, which provides all of the coffee products sold in Barnes and Noble cafes, and Samsung, with which the Company has a deal to develop co-branded electronic devices to market. Under its college partner program, Barnes and Noble works with leading US institutions such as Harvard, Yale, the University of Pennsylvania, Indiana University, and Georgia Tech.

Key Resources

Barnes and Noble’s key resources are its catalogue of products, its physical sales and distribution infrastructure, its digital platforms and technologies, its IT infrastructure, its partnerships, and its personnel.

Barnes and Noble owns a number of trademarks, patents, copyrights, and service marks which it considers to be material to its ongoing operations. Searches of records published by the US Patent and Trademark Office identified several patent applications filed under the name of Barnes and Noble, including applications entitled ‘User interface for navigating paginated digital content’, Shake-based functions on a computing device’ and ‘Move icon to reveal textual information’.

Barnes and Noble owns and leases a number of properties that are key to its operations. This includes its network of 640 retail stores and its distribution centres in New Jersey and Nevada.

Cost Structure

Barnes and Noble incurs costs in relation to the acquisition of its stock – including for its cafes, the operation of its sales outlets and distribution channels, the maintenance of its digital platforms and IT infrastructure, the management of its partnerships, and the retention of its personnel.

In 2015 Barnes and Noble accrued sales and occupancy costs in the amount of $2.84 billion, and selling and administrative expenses totaling $1.18 billion. These expenses include advertising and marketing costs, as well as personnel costs related to the payment of salaries and benefits to the Company’s workforce of 28,000 full-time and part-time employees.

Revenue Streams

Barnes and Noble generates revenue through the sale of books and various other products – such as accessories, e-readers, and games – through its multiple channels, including its physical retail outlets and its online and mobile platform, as well as the sale of drinks and snacks through its cafes.

In 2015 Barnes and Noble recorded total sales in the amount of $4.16 billion, down slightly on the $4.30 billion recorded by the Company in annual sales the previous year. The vast majority of the Company sales were attributed to its Barnes and Noble Retail segment, which individually recorded annual sales totalling $4.03 billion. Remaining sales were made up by the Company’s NOOK segment.