Why Barnes & Noble Is Selling Beer Kits, Popcorn Makers

21/11/2014
Book Retailer Tries to Reverse Declines in Store Traffic in Pivotal Holiday Season
Striding past stacks of books like Walter Isaacsons’s “The Innovators” and Stephen King ’s “Revival” at Barnes & Noble ’s Union Square store in Manhattan, Jamie Carey, the retailer’s chief merchandising officer, points to a new table called the “10 Most Inspired Gifts.”
On it are popcorn makers and craft beer kits complete with grain, hops and yeast. Mr. Carey motioned to portable turntables. “We’ve seen a tremendous response to them, and the vinyl records we’ve brought in,” he said.

Diversifying into big-ticket gifts—the Crosley turntables cost $110—is part of the company’s new merchandising strategy as it tries to reverse declines in store traffic at a pivotal moment. The crucial holiday season is getting under way, and in a few months, the bookseller is expected to split into two separate public companies, one consisting of 658 consumer stores and BarnesandNoble.com, and the other made up of college bookstores and the Nook digital business, including e-readers, tablets and e-books.
The planned split, along with sharply narrower Nook losses and other promising signs, has driven up the retailer’s shares 57% since Jan. 1. But that isn’t easing the pressure on the bookstores, which haven’t shown annual same-store-sales growth since the fiscal year ended April 2012.
“The split only works if you have something worth splitting,” said John Tinker, an analyst at the Maxim Group. “The fundamentals have to show improvement. If they have positive comp store growth that would be huge.”
Barnes & Noble’s holiday blueprint includes a TV campaign emphasizing book gift-giving; an effort to help Twitter users find gifts; and a three-day event now underway meant to entice entire families to visit stores.
Toys and games are a small but key area of the business. Comparable-store sales for the category grew 12% during last year’s holiday quarter ended Jan. 25. This year, there’s a science-related gondola in 32 stores aimed at every kid’s inner nerd—think circuit boards, rocket ships, and chemistry sets. Elsewhere, adult Lego devotees can take home a fancy build-it-yourself model of Frank Lloyd Wright’s famed house Fallingwater.
“More adults are interested in building and displaying it than there are kids interested in building and playing with it,” said Kathleen Campisano, who heads up the retailer’s educational toys and games business. Although Barnes & Noble doesn’t break out toys and games revenue, it is the retailer’s fastest-growing category.
The company is also counting on its reading of the pop culture zeitgeist. The Union Square store has a table devoted to toys associated with “Doctor Who,” a British science-fiction show popular with the retailer’s shoppers. Similar offerings include books and products tied to “Minecraft,” “Frozen” and “Game of Thrones.”
“Every retailer is grappling with the issue of falling store traffic,” said Lorraine Shanley, president of Market Partners International Inc., a publishing consulting company. “But Barnes & Noble is becoming savvier about how it keeps its customers coming back, and that’s by merchandising to their interests.”
Some say they long for the days when bookstores simply focused on books. “I’ve got an elementary-school son, and every time we go into the Barnes & Noble store near our house we have to fight the toy battle with him,” said Tim Nelson, a St. Paul, Minn., resident. “There are Minecraft figurines at the front of the store, and we have to ask him to please keep moving.”
Books, though, are still at the heart of the retail chain, and publishers say Barnes & Noble has become more creative this year with how it organizes and displays its titles. One paperback display in the Union Square store, for example, mixes literary classics such as Vladimir Nabokov’s “Lolita” and Sylvia Plath’s “The Bell Jar” with the adventure tale “Shantaram” by Gregory David Roberts and Karl Ove Knausgaard ’s autobiographical novel “My Struggle: Book 1.”
Mr. Carey said shoppers want to discover the unexpected. “Someone who reads ‘Wolf Hall’ could just as easily read any of those other titles,” he said, referring to the historical novel by Hilary Mantel.
The new book merchandising tactics, devised by Mary Amicucci, who oversees the retailer’s adult consumer and children’s books business, are a tacit acknowledgment by the bookseller that its stores needed more excitement.
There are some encouraging signs. In the first quarter ended Aug. 2, core comparable-store sales—which exclude digital products—fell 0.4%, an improvement from a 7.2% decline in the year-earlier quarter.
And the wind will be at the company’s back this holiday season. The National Retail Federation expects overall holiday sales will grow 4.1% year-over-year, compared with 2013’s growth of 3.1%, as lower gas prices and rising employment drive higher consumer spending. Other retailers like Best Buy and Target have posted promising results lately.
Some remain skeptical. As a whole, Barnes & Noble hasn’t reported an annual profit since the fiscal year ended May 2010. “There’s a big question mark hanging over Barnes & Noble based on past performances,” said James McQuivey, an analyst at Forrester Research .
One concern is that the bookseller doesn’t appear in a strong position for the expected bonanza of online shopping this year.
Its retail website has struggled, attracting 10.6 million unique desktop and mobile visitors in October in the U.S., down from 11.3 million in October 2013, according to comScore. The company continues to lag behind Amazon.com Inc., which dominates digital book sales and the sale of physical books online.
“People have more alternatives than ever before with what to do with their next 15 minutes,” Mr. McQuivey said. “Those of us who love to read will do so, but those who don’t won’t be persuaded by a holiday sale or promotion.”
The challenge for Barnes & Noble will be getting as much as possible from each customer as its number of stores declines. The retailer expects to close approximately 20 stores in fiscal 2015, including those in Norwalk, Conn., Queens, N.Y., and Apple Valley, Minn.
“What you want is that people who are already comfortable in your stores come in and do a little more,” Mr. Tinker of Maxim Group said.

Fonte:http://online.wsj.com/articles/why-barnes-noble-is-selling-beer-kits-popcorn-makers-1416615443

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