How Did I Ever Get Started On This Subject? -- January 8, 2015

USA Story today says:

Despite a better-than-expected holiday shopping season, it wasn't enough to keep J.C. Penney JCP from announcing it will shutter 39 underperforming stores and lay off 2,250 workers.

Penney said the mall-based stores in 19 states will close by early April.

Wet Seal is closing 338 stores and laying off 3,700 employees in an effort to avoid a bankruptcy filing.

Sears, Staples, Macy's and Coach announced store closures in 2014.

But this is why I posted the story as a stand-alone (I just generally update the "big box closure" page elsewhere):

Consumer psychologist Kit Yarrow, author of Decoding the New Consumer Mind, says, "Retail is in a massive transformation period. Consumers have lost their enthusiasm for trolling through massive stores hunting for a bargain. They can do that online.

"The only big department stores that will remain relevant to consumers are those that are incorporate tricks and treats into the shopping mix — like product offerings you can't find online, special demonstration or sampling, cushy or fun relaxation areas."

Some time ago I mentioned on the blog that Barnes and Noble was turning into a storefront where folks browse for new books and then go on-line to buy them. Here in Southlake, TX, Barnes and Noble has also turned into a place where non-buying teens hang out on Friday and Saturday nights. I was told by the Friday night security officer in the Southlake Barnes and Noble store that the B&N store in Southlake was the only in the US that had to have security on Friday and Saturday nights due to teenagers "taking over the store," particularly in the summer. The Southlake B&N is located in an outdoor mall and soccer moms in huge SUVs and stretch limos drop off dozens of teens at a time on weekend nights because the outdoor mall is perceived to be very, very safe.

But I digress. As I was saying:

"The only big department stores that will remain relevant to consumers are those that are incorporate tricks and treats into the shopping mix — like product offerings you can't find online, special demonstration or sampling, cushy or fun relaxation areas."

I said the same thing to my wife some months ago when we were out in California and noted that the B&N bookstore in west LA was trashed by readers who left books and magazines everywhere but appeared not to have bought anything. I asked my wife if she had any ideas on how B&N might transform itself.

She was at a loss.

This is what I would do. Maintain, or even possibly, increase the loyalty / member's card from $25 to $50 annually. Like Costco, only members would be allowed inside.

My wife said she would never buy a B&N card for $50. We both (once) said we would never buy a B&N card for $25 but we have, and we will. It's the only "real" bookstore left (where we can browse and then order on-line).

But for $50, B&N would have to transform the store into a very special kind of store. First, they need to match Amazon's prices. Easy. Some stores already do that; I believe Target says they match other retailers' legitimate prices. At least one Target in southern California had that sign up. Even "Amazon price + 5%" B&N pricing would be a winner. Today, I saw a new book that I had not seen before; I will get it but it's $50 at B&N and $36 (with free shipping) at Amazon. You can bet where I'm going to get it.

Second, they need to make it a really, really cushy place to be. An occasional coffee shop is cushy, but even Starbucks could do better. Too many hardwood, straight-backed chairs and library desk-like tables. Make is so cushy people stay there all day (with wi-fi, of course). Add a nook upstairs with bar and sports restaurant and both mom and pop will stay forever. The longer folks stay, the more they will end up buying. And yes, it can be done. The Starbucks on Harvard Square, Boston, has an upstairs bar with upscale coffees that is open only during certain hours (busy weekend evenings).

The music and DVD section of B&N is superb, especially in the bigger stores, but again, it's great for the consumer: browse and buy on-line. I often find new Blu-Ray titles only because of B&N. But they have to match Amazon. And I have no idea why Apple and Barnes/Noble can't co-exist under the same roof (with or without the Nook). Not the full line of Apple, of course, but the top of the line iPad, and then accessories, like headphones.

My hunch is the children's section in Barnes and Noble does very, very well.

I would also set aside an upscale "used" book area, separated like they separate the children's section, and then rotate the stock. Readers love to explore old books. Partner with "Half-Priced Books" to have a local HPB bookstore rotate the stock of about 250 used books (one copy of each title) every two weeks. Start with one copy of each of Virginia Woolf's books with new biographies of Virgnia Woolf in the same area.

There must be a gazillion things one could try.