Retailers shift their ad spending from TV, radio and print ads to digital ads.
Barnes & Noble reports sales of Nook devices, accessories and digital content declined by 60.5% year over year in the nine weeks ending on Dec. 28. Consumers turned away from Nook and toward competing devices from Apple and Amazon, both of which reported strong holiday sales related to their tablets.
The holidays were dim for Barnes & Noble Inc., particularly for its Nook division. The retailer reports that sales of Nook devices, accessories and digital content were $125 million, down 60.5% year over year for the nine weeks ended Dec. 28. That by far outpaced the chain’s reported decline in e-commerce and bookstore sales, which together had revenues of $1.1 billion in the same period, down 6.6% from the prior year.
“Sales in the Nook segment declined year over year largely because during the previous holiday season the company introduced two new tablet products, while no new tablets were introduced this year,” newly-named CEO Michael P. Huseby says. “Instead, we executed our plan to sell through our existing high-quality devices.” Huseby is familiar with the challenges facing Nook, as he was appointed CEO of the Nook Media unit in July 2013.
Digital content sales were $36.5 million in the nine weeks over the holidays, a decline of 27.3% year over year, which Barnes & Noble attributes to fewer device sales and lower average selling prices. It sold $88.7 million in Nook tablets, e-readers and accessories over the period, a decline of 66.7% from the same period in 2012.
Meanwhile, some of Barnes & Noble’s competitors reported their best earnings yet on digital content and device sales in the 2013 holidays. Apple Inc. had its most successful month ever in app sales in December, when customers downloaded more than 3 billion apps for total sales of more than $1 billion, the retailer reports. It also introduced a new device in the holidays, the iPad mini with Retina display, although it hasn’t reported sales figures on that yet.
Amazon.com Inc. also released new devices for the holidays, including the Kindle Fire HDX with an 8.9-inch display, which was available for pre-order starting in September. It expanded its Kindle market into Australia for the holidays, too, where it began shipping the Kindle Fire HDX and opened a country-specific Kindle Store for digital content. Without giving exact figures, Amazon says the Thanksgiving shopping weekend that included Cyber Monday was its biggest sales day yet for Kindle Fire tablets and Kindle e-readers.
The Nook has been a sore spot for Barnes & Noble this year.
In November, sales of digital content, such as e-books and e-magazines sold through Nook devices and apps, decreased 21.2% year over year to $57.3 million, it reports. In February, the retailer considered splitting the Nook divisionoff from Barnes & Noble’s e-commerce and store business after founder and chairman Leonard Riggio made an offer to buy the retail businesses. After that deal didn’t go through, the retailer in June announced a shift in its Nook strategy that involved outsourcing the manufacturing of its color tablets.
BarnesandNoble.com Inc. is No. 27 in the Internet Retailer Top 500 Guide.