In its second-largest acquisition, Amazon buys the company for $970 million.
Barnes & Noble plans to invest $140 million on digital initiatives in 2011.
Barnes & Noble is betting big on digital—it plans to invest $140 million in digital initiatives in 2011. The retailer says it has the data to back up the financial commitment. For example, over 25% of consumers who own the retailer’s Nook e-readers are new to BarnesandNoble.com and Nook buyers increased their combined physical and digital weekly spending by 17% after purchasing the e-book reader. Barnes & Noble executives provided the data to investors last week in a presentation outlining and supporting the retailer’s digital strategy.
BarnesandNoble.com Inc., No. 42 in the Internet Retailer Top 500 Guide, says it now has 15 million BN.com accounts and 7 million unique monthly visitors to its e-commerce site.
When it comes to digital, Apple Inc. (No. 4) also is aiding the book retailer’s growth. 2.4 million consumers have downloaded Barnes & Noble e-reader apps from iTunes that allow readers to download e-books from the retailer, the company says. Perhaps that’s why the retailer so quickly hopped on the iPad app bandwagon, developing last month a Barnes & Noble e-reader app for Apple’s new tablet computer as well.
Sales of digital books are growing quickly, Barnes & Noble also said in the presentation. For example, digital sales of romance novels are growing 20% while printed romance novels are growing by just 2%. Overall, e-book sales are growing by 20% as well, the retailer said.
Barnes & Noble said its goal is to “deliver content in all forms, on multiple platforms, in‐store, online and wirelessly to maximize the number of digital libraries powered by Barnes & Noble’s e-bookstore.” The company hopes the Nook will be a big part of this strategy and the e-retailer is offering Nook users such promotions as five free digital books, free coffee and free Wi-Fi in its stores.
To expand its digital strategy beyond its own stores and e-commerce site, Barnes & Noble is selling its Nook at electronics retailer Best Buy. The e-reader is currently sold at 1,070 Best Buy locations, Barnes & Noble says. It also was recently featured on the BestBuy.com homepage—which attracts about 25 million monthly unique visitors—in the store’s circulars, which are distributed to 90 million homes, and in the e-mails Best Buy sends to its list of 17 million consumers.
Barnes & Noble says its digital efforts are already paying off. The retailer notes strong e-commerce sales growth since its e-bookstore launched, reporting 9% growth in Q2 of 2010—the first quarter after the launch.