With the unveiling of a revamped store design on Thursday, Barnes & Noble seems to be betting that the way to its customers’ wallets is through their stomachs.
The bookselling behemoth said in a presentation for investors that it will market test four redesigned stores later this year that feature larger café areas offering wine, beer and an expanded food menu, as well as table service. The goal is to boost traffic to the stores and to grow food and beverage sales from just under 10 percent of the retailer’s total sales to a larger pillar of the business.
It’s not hard to see why Barnes & Noble would want to move in this direction. Consumers have been spending strongly on dining out, even as mall retailers and big-box stores have struggled to ring up sales. And a key part of Barnes & Noble’s strategy these days is to grow in categories outside of its core book business, which has long grappled with punishing competition from Amazon.com. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)
By offering wine, beer and what an executive described as “shareable, American-style food,” Barnes & Noble seeks to expand its hours of the day that the café is relevant to shoppers. The current offering is coffee-centric, and the cafés will continue to serve Starbucks drinks and sweets. But the new design is aimed at making Barnes & Noble a competitor for your dinnertime dollars, not just your morning or afternoon pick-me-up. One of the four pilot locations will be in the One Loudoun town center development in Ashburn.
In a sign that the company is committing serious resources to getting the dining push right, it announced Thursday that chief operating officer Jaime Carey had been promoted to president of development and a newly created restaurant division.
In many ways, Barnes & Noble’s plan reflects broader changes afoot in brick-and-mortar retailing: In order to give shoppers a reason to hit stores instead of shopping online, many chains are making their outposts more experiential. That’s why you see Lululemon stores offering exercise classes, or why Samsung has opened a New York location that features a live deejay and a walkable tunnel in which the walls can be lit up with your selfies. Barnes & Noble is hoping that if a bookworm can linger with a new title over a glass of wine, it will feel more homey and welcoming.
The café changes aren’t the only ones Barnes & Noble is implementing to try to make its stores into more of a gathering place. It is moving to add more seating throughout the store so you’ll be enticed to curl up with your book, and it is doubling down on events such as hands-on play sessions in its toy and game department.
And the retailer promised to make other changes, too, to its merchandise assortment and display in order to drum up sales. Based on the success it has had selling adult coloring books, it will open “For the Artist” shop-in-shops in 200 locations. These areas will include supplies for painting, cartooning and illustration. It will also roll out more graphic novels and go big with vinyl records, both of which showed strong sales last year.
And it is trying to reorganize the stores with better navigation. In some cases, that will mean simplifying signage, such as changing a section called “entrepreneurship” to just “business.” In others, that will mean putting items close together that are likely to appeal to a single shopper. So a new section of infant and toddler sleep books will be nearby those about baby food and baby sign language.
Investors were cheered by the plans and outlook that Barnes & Noble put forward this week, sending the company’s stock up almost 8 percent on Thursday. The company said that it expected flat to one percent growth this year in sales at its stores open more than a year. That would be a potential improvement over the flat sales it recorded in the most recent fiscal year, and clear progress from the 5.8 percent decline it saw two years before that. The retailer also said it expects to close just eight stores this year — the fewest store closures in a single year since 2000.
Barnes & Noble has plenty of hurdles to clear as it tries to improve its business: The Nook e-reader business is still hemorrhaging money, though executives expect that those losses would narrow this year. And while the company believes it maintains a 20 percent market share of book sales in physical stores, its share of e-book sales is just 9 percent.
Correction: An earlier version of this story said that Barnes & Noble believed it share of online book sales was 9 percent.