Guys, this is by/from our Rob
Barnes & Noble is positioning themselves to be formidable competition to
Amazon.com. Here are some things I will post in about around 12:00 pacific this
afternoon:
BKS increased .com's repeat customer order from around 40% to 51%. This is large
increase while Amazon's repeat rate was relatively flat.
They became: the 38th overall site in terms of Traffic. The #3 shopping site.
They got a #5 rating in terms of ease of use and technical responsiveness - metrics that
Amazon.com was considered to be well in the lead on just months ago (Amazon's
reputed "internet technology advantage"). Barnes~.com got a #1 rating from GIS
Wizard.
Barnes~.com now has 38,000 associates singed up - a large jump and growing rapidly
compared to Amazon.
Barnes~.com now has 4.6 million titles available in the system - 1.7 times that of
Amazon.com. Barnes~.com is now the "largest internet bookseller in the world".
Barnes~.com now has 750,000 titles available for same day shipment from stock -
About 1.8 times what is available from Amazon.com.
Barnes is cutting back o the number of book stores that will be built as it concentrates
on refining operations and increasing overall profits. They will increase advertising and
promotion of the Barnes~.com part of the business.
Barnes will roll out two aggressive ad campaigns starting next week. This will inclue
new TV, radio and magazine ads targeted toward increasing Barnes~.com business.
Barnes sees many synergies and cost savings between Ingram and themselves. They
can combine MIS departments and reduce some staff. they can also co-mingle
warehousing and delivery systems and purchase an increasing number of products
directly from publishers at substantial savings.
These savings and operational eficiencies will not just be used to increase the bottom
line. Instead, a portion of them will be used to increase the reach and business of
Barnes~.com through stepped up advertising, store tie-ins, store pick-up, author
involvement, tie-ins with MSN mapping service to direct on-line customers to physical
stores, and other efforts. The CEO pointed out that 69% of book sales is not through
retail channels. Most book and published material sales are to institutions, libraries,
schools, corporations and the like. The acquisition of Ingram will increase Barnes
opportunities to service those markets and do tie-ins between large contracted sales
and on-line purchasing via the Internet.
Barnes~.com plans to accelerate advertising over the next few years. They do not
think it is posible (as Amazon seems to think) to reduce ad budgets for at least 3 years.
Barnes~.com is not expected to break even until at least 2001. For the next few years
they will gain market share and build a new vertically integrated delivery and marketing
system that combines lower costs of operations with on-line and "touchy-feely" in-store
sales.
"We plan to do a hell of a lot of cross merchandizing"
Barnes will start rolling out the relationship between Barnes~.com and the physical
stores. They have now equipped 350 stores with a new on-line availability system that
has access to over 4.6 million titles. Most popular titles can be delivered to the store
within 24-36 hours. Less popular titles can be delivered within 72 hours.
In conjunction with the above, Barnes~.com is including a map service (MSN) that can
direct on-line customers to the most conveniently located stores to buy and pick up
items selected on-line! The CEO said " . . . we say to the customer, 'If you want to see
this book, to "feel" this book before you buy, go to book store located at X . . . and
they click to see a map of where it is located.'"
When asked about what the company plans to do with in-store multimedia event
kiosks, the response was "We will tell customes to 'come in to listen to so & so speak
about their book.' We will identify the store locations on a map on the site and they can
click down to the store location."
They mentioned that they plan to roll in the capabilities of Ingrams "lightning Press" to
be able to print out limited editions or out-of-print publications to order from
strategically located regional locations. This will increase availability and shorten the
delivery time available from any other source in the world.
In the words of Barnes CEO, "~our plan is to grow our business agressively and
intelligently . . . the way you guys (analysts) look at others plans is that you move
profits two decimal points to the left and the value of the stock moves two decimal
points to the right."
Barnes~.com plans to roll out video and increased music sales. Not yet talked about -
they paln to expand into other product sales beyond books, music and videos. They
would not elaborate for "competitive reasons".
Maybe the most significant thing is that Barnes~.com has now locked up AOL, MSN,
Lycos and other prominent portals as the exclusive targeted bookseller. The MSN
deal has not yet ben officially announced. I understand it to be a multi-year deal, similar
to AOL, that will lock Amazon out of another important high-traffic portal as a means
for increased visibility and continued expansion. Barnes~.com will utilize Microsofts'
sophisticated on-line mapping service to help tie-in Barnes~.com with Barnes physical
store locations and multi-media kiosks.
There is a bit more but I am running out of time to get this stuff posted today. Use this
information and distill the best past arguments for reposting - let's blitz the SI and TMF
and Yahoo! sites and get this out to any publishers we can! |
