Published on: August 5, 2010Now available on iTunes…
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Hi, I’m Kevin Coupe, and this is MNB Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.
It has been a bad week for old world business models.
Yesterday, Barnes & Noble announced that it is up for sale, and that the board is reviewing its various options. The move came after a series of quarters in which the chain of 270 brick-and-mortar stores failed up keep up with the growth of Amazon.com, even as it tried to compete both online and with the introduction of the Nook, which was designed to serve as a rival to the Amazon Kindle. It isn’t like Barnes & Noble is going away anytime soon; among the possible bidders of the company are founder Leonard Riggio, who could take the company private, and investor Ron Burkle, who owns close to one-fifth of the company and has been loudly questioning the firm’s corporate governance. However the story turns out, the possible sale of Barnes & Noble is, as the New York Times put it, “the latest sign of trouble for brick and mortar retailers.”
Meanwhile, Newsweek which has had its own financial troubles as it struggled to redefine the meaning and relevance of a print newsmagazine, was sold this week by the Washington Post Company to 91-year-old audio tycoon Sidney Harman, who reportedly had to write a check for one dollar to take over the company, along with assuming responsibility for some $70 million in debt. Harman’s goal is to get to break-even over the next couple of years, and maybe he’ll do something radical like move the whole thing online and figure out a viable economic model. He’ better figure something out, because in a world dominated by online communications, Kindles and iPads, it is hard to see how a traditional magazine business model will work.
However...there are contrarian success stories out there.
The Wall Street Journal this week about two small, independent bookstores that have opened on the eastern end of Long Island and actually are finding some success. At one, the owner has taken to delivering books to customers himself because, as Michael Shatzkin puts it, “I have to compete the way I can.”
In addition, a man named Jack McKeown opened his own branch of the Miami-based shop Books & Books on Main Street in Westhampton Beach. H explains his decision this way: “With Borders struggling, Barnes & Noble no longer building new stores and Amazon focusing on the Kindle, we saw an opportunity that if you really understood who was buying here, you could reinvent the book store.”
I love that. Even though I’m an online guy with an unhealthy addiction to Amazon.com, I love the idea that there are entrepreneurs out there who are looking for opportunities and challenging conventional wisdom - and they are doing it by knowing their customers as well as they can, and delivering personalized service that they believe compares well with the competition, whether it is Amazon or Barnes & Noble.
That’s what successful retailers have to do these days. They have to work against the conventional notions of retailing, color outside the lines, and find new and innovative ways to identify and cater to their customers.
Along the same lines, there was a story in the Seattle Times the other day that read like this:
“The store in downtown Portland, with its Ikea-esque furnishings and big flat-screen monitors, has a sleek, streamlined look. At three computer stations, young people sip coffee as they surf the Web or check e-mail; a local florist's promotional display occupies the center of the room, next to the logo T-shirts and coffee mugs.
But this isn't a coffee shop, an electronics store or even a florist. It's a branch of Umpqua Bank, and from the free coffee to the free cookies to the free Internet access, it reflects the determinedly untraditional image Umpqua has striven for more than a decade to create.”
I’m hard-pressed to write nice things about any bank, but Umpqua’s story is an interesting one in terms of how it positions itself as part of the community, how it caters to small businesses, and how it has been careful about its own balance sheet to insure that it would not fall into the same chasms that have swallowed up so many other banks.
It means being different by doing different ... and making the requisite changes before it is too late to be meaningful.
Being different by doing different. Not a bad mantra for how to succeed these days.
For MNB Radio, I’m Kevin Coupe.
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