Is Nook a Kindle Killer?

In a word. No.

Barnes and Noble execs (hopefully) know it, Amazon knows it. Everyone except for PC magazine knows it. But I don’t blame David Coursey’s cursory commentary, after all someone had to write the obligatory five reasons why… list.

Silicon Alley one of my favorite blogs has a good list of reasons explaining why ‘Nook is toast’ if you need a good logical reason.

But of course I’ll tackle this from the notsocommoncents perspective.

The biggest threat to Barnes & Noble is its not a digital brand. Ebooks are inherently digital. And while Barnes and Noble likes to tout itself as the No. 1 Bookseller Brand, the true data doesn’t lie. Amazon is the number 43 global brand as ranked by Interbrand. Barnes & Noble, not on the list.

Amazon is sells more media (books, CDs, and DVDs) in the U.S. than Barnes & Noble + BN.com- book sales alone aren’t broken out.

More people primarily buy books online and at a far greater frequency:

image

(Percentages, Source: Zogby, The Reading and Book Buying Habits of Americans)

Ok, so it’s clear, online is the dominant retail channel, Amazon compares favorably with Barnes and Noble, despite retailing online only, and Amazon’s brand has global clout. There is still one more data point Barnes & Noble should pay attention to when deciding to go to war with Amazon digitally:

image

(Data is in the Thousands 000s; Source: The Nielsen Company as cited on company blog Jan 2009)

Amazon is the 800 lb gorilla in the digital realm. They are mimicking Apple’s iPod strategy beautifully and I think their expansion to PC applications and iPhone applications are genius. Amazon Kindle needs to expand to new retail partners soon though- while 77 percent of people buy books online, gadgets are purchased offline. Amazon has already proven the Kindle can sell well digitally:

“Kindle has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on Amazon.com. It’s also the most wished for and the most gifted. We are grateful for and energized by this customer response,” said Jeff Bezos, founder and CEO of Amazon.com. “Earlier this week we began shipping the latest generation Kindle. Its 3G wireless works in the U.S. and 100 countries, and we’ve just lowered its price to $259.”

Source: Amazon’s Huge 3rd Quarter

As a product planner/strategist, it continues to surprise me the lack of strategic rigor that goes into big corporate decisions like this. The capital invested in this defies logic.

What I would do if I was Barnes and Noble:

  1. Discover what business you’re in. You’re not in the book selling business. You decided that long ago when you let Amazon run away with online book retailing. . . [Intrigued? Stay tuned for part two … suggested strategies for Barnes and Noble]

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