3 Ways Barnes & Noble Beats Amazon’s Customer Experience, According to Cognitive Science
Long before COVID-19 forced many retailers to shut down, we saw Blockbuster lose its years-long battle against Netflix when it filed for bankruptcy in 2010.
“Innovate or die” is quickly becoming the theme of the 21st century for brick-and-mortar retail. What will be Barnes & Noble’s fate?
“Innovate or die” is the 21st century’s message to brick-and-mortar retailers.
Barnes & Noble’s customer experience is unmatched by Amazon. Here are three reasons why:
#1: Recommendation Engines Can’t Beat the Experience of In-Person Book Discovery
According to McKinsey & Co, 35% of Amazon’s sales come from its product recommendation algorithms. How can Barnes & Noble possibly compete with the power of billions of consumer data points?
It doesn’t have to, because the in-person shopping experience by itself is a powerful differentiator.
I went to my local Barnes & Noble looking for one book (Hooked, by Nir Eyal). Walking through the aisles of books, I found a dozen more that caught my eye.
The intangible aspects of the customer experience are sometimes the most powerful ones. Holding a book and flipping through the pages beats an Amazon book preview or an audiobook sample.
This isn’t just my personal preference — our innate preference for physical goods and in-person experiences is grounded in cognitive science.
According to several studies, we value physical goods over those same goods when they are presented to us digitally. We ascribe more value to physical goods because we feel more psychological ownership over goods when we can physically hold them.
When we feel like we own something, we want to retain what’s ours. In behavioral economics, this phenomenon is known as the endowment effect.
Our innate preference for physical goods and in-person experiences is grounded in cognitive science.
#2: Barnes & Noble Cafés Are the Perfect Complement to a Good Book
Most Barnes & Noble locations contain a Barnes & Noble Café, which serves Starbucks Coffee and offers free Wifi.
When combined, complementary goods are more valuable than the same goods are individually. Combining books and cafés makes for a customer experience that can’t be recreated online.
Also, B&N Cafés turn your visit to Barnes & Noble into a multi-sensory experience. Adding taste, touch, and smell to the visual experience of perusing books is shown to increase object memory.
Experiences that trigger multiple senses are more memorable since our brain can recall information from multiple sensory organs, rather than just one.
Intuitively this makes sense. Most of us have childhood memories of bookstores and libraries, but I doubt many of us can remember that time we bought something on Amazon back in 2014.
#3: Shopping for Books is Hipster, Social, and Nostalgic
I’m going to go ahead and make a declarative fashion statement: Going to bookstores is so out of style that it’s almost back in.
Millennials and Gen-Z are so commonly viewed as social media-addicted, Netflix-watching, and iPhone-obsessed, that reading and spending time at bookstores is almost… vintage?
It’s almost like the rise and fall and rise again of the Champion sweatshirt.
Plus, who can forget that Joe and Beck from Netflix’s hit 2018 series ‘You’ met at a bookstore?
But Competition is Fierce, and Superior CX Is Not Enough
Of course, customer experience is only one piece of Barnes & Nobles’ proposition to consumers.
For most consumers, Barnes & Nobles’ superior CX doesn't justify its prices.
For every price tag I checked, Amazon offered the same title at a 10–20% discount. Plus, with Audible’s student discount, you can get any title for just $9.95 per month — about a third the price of a typical hardcover book at Barnes & Noble.
Unit economics just aren’t in Barnes & Noble’s favor. Operating physical locations is expensive — a typical Barnes & Noble bookstore is 25,000 square feet, and keeping the stores sanitary, air-conditioned, and neatly organized is integral to maintaining a great customer experience.
A Fierce Competition for Eyeballs
According to one source, Amazon has at least 50% of the market for print books and over 75% for e-books. The same figures for Barnes & Noble aren’t available online, but one could expect the bookselling behemoth to control a sizable piece of the market. Pretty good, right?
Barnes & Nobles isn’t only competing with other booksellers like Amazon and Walmart. It’s competing for consumers’ attention in an increasingly digital world.
When we zoom out and look at the other choices Barnes & Noble’s customers have for learning and entertainment, the market is much more saturated:
- Online Articles: Medium, email newsletters, and online news sources
- Online Courses: Udemy, Udacity, Coursera, EdX
- Social Media: Facebook, Linkedin, Instagram, Snapchat
- Audiobooks, Podcasts, Book Summaries: Audible, Spotify, Blinkist
- Video Streaming: Netflix, HBO, Disney+, Hulu, Youtube
That’s to name a few. B&N also competes with resellers who often sell at steep discounts:
- Book Resellers: Ebay, Craigslist, Etsy, Mercari
- Thrift Stores: Often have books for $2 or less. As a not-so-humble brag, I recently picked up Shoe Dog for $0.50.
So What’s Next for Barnes & Noble?
Since B&N got bought out by Elliott Management in 2019, the company’s disappearance isn’t as imminent as we might otherwise suspect.
The takeaway? Enjoy Barnes & Noble’s premium book-buying experience while you still can.
About Me: My name is Galen and I’m an undergrad studying Computer Science and Psychology at Harvard University. I’m passionate about startups, tech, and UX. Right now, I’m interning at Posh Technologies, a growth-stage conversational AI startup. In the past, I’ve done a VC fellowship and taken time off from school to co-found a tech startup in the sustainability space.
Want to connect? Reach out on Linkedin or to galenlewis AT college.harvard.edu