"Deliver, Deliver, Deliver," said Jonathan Bulkeley, CEO of Barnesandnoble.com (Nasdaq: BNBN) when asked what the strategy to building market share was for the second-runner in online book retailing to Amazon.com.
Bulkeley, who joined the company last January wasn't talking about bringing books to customers' doorsteps though; he was referring to the fact that barnesandnoble.com has yet to deliver on the clicks and mortar strategy. Bulkeley outlined the company's strategy at an e-commerce forum at Internet World 99, which officially opens Wednesday.
"Bulkeley said he's comfortable with where Barnesandnoble.com's stock price sits considering many companies' shares are trading below their initial offering prices. Shares in Barnesandnoble.com were up 5/8 to 20 9/16 Monday morning, below their peak of 26 1/8 reached just after the company's debut last May.
The percentage of Americans who will buy a book this year stands at 52.9 percent, but only 4.6 percent of those will buy online, according to Bulkeley's figures from Jupiter Communications. He emphasized the "Many Faces of Eve" in a top-ten list of issues Barnesandnoble.com is addressing in its strategy to leverage the synergy between its bricks and mortar and online operations.
Current initiatives to cross-breed online and store sales include slipping coupons for online discounts into store-shopper's bags, inviting online shoppers into the store to meet with authors, and notifying customers by e-mail when a new work is released by an author they have previously purchased. Bulkeley also said the company is focusing on tracking customers' purchase patterns through zip-codes.
"Barnes and Noble is evolving, it's becoming a knowledge center. Bookstores have become the libraries of the 1990s," said Bulkeley, who sees the store's potential to offer cafes, and magazine browsing as reasons retail isn't about to go away. Barnes and Noble's gross margin on in-store sales is 37 percent, versus 21-22 percent from online sales.
Bulkeley said he is very comfortable with analysts' estimates for the upcoming quarter, and is happy with how the stock is doing, despite competitor Amazon.com 's (Nasdaq: AMZN) recent gains.
In its first quarterly earnings report as a public company, Barnesandnoble.com narrowed its second quarter loss and topped estimates as sales came in at $39.1 million.
"We're focused on building a big brand online," said Bulkeley in response to questions on how the company would satisfy investors. Who gave that as a reason Barnes and Noble will never consider becoming a back-end supplier for anyone.
"We are big brother, we know every click you make," Bulkeley said on how the company is addressing the "1984" issue. Barnesansnoble.com will continue to personalize and customize the site, he said. The company is also addressing security concerns, which are the reason that 98 percent of potential consumers won't shop online, according to Jupiter Communications statistics.
On other strategies for the company, Bulkeley said Barnesandnoble.com's recent agreement with Bertelsmann marks the current extent of their plans to offer works in other languages. Barnesandnoble.com customers seeking titles in a foreign language are redirected to Bertelsmann's all-French or all-German sites, and though it has "sold books in 210 countries," barnesandnoble.com will remain focused on the US market.
The strategy to face competition with Amazon.com, was, of course, a classic tale of "The Tortoise and the Hare," said Bulkeley, who added that Barnesandnoble.com intends to stay focused on books, unlike the diversifying Amazon. "First movers don't always win," he added.