Barnes & Noble says it’s testing stores that include an app to help customers shop.
Even traditional bookstores know they must embrace technology, with Barnes & Noble Inc. saying Thursday that its well-received test stores include an app to help customers search for merchandise and make purchases.
“These test stores are smaller than our average store and feature a more intuitive store layout,” said Demos Parneros, chief executive officer of Barnes & Noble
, on the retailer’s earnings call.
“They have better adjacencies [with similar book categories next to each other] and expanded food and hospitality offerings and more omni-integration, including an app that can help guide customers to the location of a specific book, global checkout and advanced digital kiosk to help service customers,” he said.
, which opened its first bricks-and-mortar bookstore in New York in May, incorporates its own app into the shopping experience to help customers navigate the store and process transactions. Shoppers can scan barcodes on the shelves for more information about books, including pricing for Prime members. And the checkout process is cashless, with shoppers paying with either their Prime account or a payment card.
Barnes & Noble declined further comment on its approach to digital in its stores. The company began with a college bookstore in 1965 and now has more than 630 locations across the country, according to its website.
Amazon has seven bookstores with additional locations slated to open.
Barnes & Noble has opened three test stores over the past year and is implementing sales initiatives in existing stores to help spur growth. The Nook, the store’s e-reader, is “also an important component of our omnichannel offering,” Parneros said. The report shows that Nook contributed $32.0 million in fourth-quarter sales, down from $42.0 million last year. Its operating losses totaled $7.9 million for the fourth quarter.
Overall, Barnes & Noble reported fiscal fourth-quarter a 19-cent loss per share, compared with a 42-cent loss for the same period last year. Sales totaled $821.2 million, down from $876.7 million last year. The FactSet consensus was for a loss of 23 cents and sales of $783.0 million. Same-store sales fell 6.3%.
The pace of decline has eased at Barnes & Noble, said Neil Saunders, managing director of GlobalData Retail, in a Thursday note, but sales are down nonetheless, with the company’s “saving grace” being its handle on costs. The Nook division has been a “festering sore,” Saunders wrote.
“We see very little future in this area: overall e-book growth is waning, and Barnes & Noble’s weak position in the segment means it will suffer more than most,” he said. Instead, he recommends a greater focus on the company’s online business, which reported 2.9% growth in the fourth quarter.
“This is an unsatisfactory outcome and shows that the small investments in digital made over the past year are not paying dividends,” according to Saunders. “In our view, Barnes & Noble is simply not an online destination for many shoppers buying books and associated items – something that the company needs to correct.”
Barnes & Noble shares rallied on the earnings news, closing up 7.7% in Thursday trading. Shares are down 37.2% for the year to date while the S&P 500 index
is up 8.7% for the period.
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