Saturday, September 4, 2010

Bait and Switch: How I Almost Bought a Book at Barnes & Noble, Then They Lost My Business

So I'm doing some analysis and putting together a roadmap presentation for future implementation of In doing some research and trying to build some graphics, I came across an interesting site that lead me to an interesting book, Enterprise Architecture As Strategy.

The more that I looked at the book, the more I realized that I was interesting in buying it. A quick found that Amazon offered the lowest price, but Barnes and Noble wasn't that much more expensive and they offered the option of in-store pick-up. Since we're on the front end of a 3-day weekend, it seemed like a great opportunity to catch up on some reading. The web site noted that one of the local Barnes & Noble stores had the book in stock. However, as I started to reserve a copy for in-store pick-up, I noticed that the price had jumped from the competitive online price, back to the list price which was significantly higher.

Just to check that this wasn't some sort of error, I made a quick call to the store and they confirmed that the price would be higher for in-store pick-up. The store would not honor the lower price.

Needless to say, I'm not going to buy the book from Barnes & Noble. Further, now that I understand their pricing policies and the difference between their online price and their in-store price, I don't expect to shop there again. Don't get me wrong -- I appreciate the concept of a brick and mortar bookstore, of being able to wander and browse. I don't even mind paying a premium for a good in-store brick-and-mortar experience. The biggest problem that I have is that, with this online reservation system, I've essentially bought the product online and, as a convenience for both B&N and myself, I make the effort to go pick it up.

It's possible that this pricing strategy makes sense when you add up all of the costs in some complex number and accounting analysis, but in plain old consumer speak, the underlying message from B&N reads like this:
We have a great resource for finding books online. We are also very competitive with other book stores on the internet. But we're better than the internet because we have actual stores, so you can come pick up your book. Oh, we forgot to mention -- if you are going to make the extra effort to come to our store and get your book, we're going to charge you more for your extra effort.
Other retailers have found ways to successfully sell online and brick and mortar without using this two-tiered pricing scheme. Apple, Best Buy, and Costco are just a few of the companies that operate effectively in both worlds. In that way, the Barnes & Noble pricing strategy may be one of the best indicators that B&N's business strategy still hasn't adapted the Internet.

In some ways, B&Ns approach seems like a surrender to the idea that their retail store experience offers no value add, no opportunity to upsell or to add items to the customer's cart. Now it's likely that they have done much more in-depth studies on their customer's behavior, but it truly seems like their pricing strategy was designed by someone who was more worried about in-store customers using the online system to cut into their margins. Compare that with Apple, where you can schedule an appointment online for an in-store shopping experience.

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