Could Nook Light a Fire Under the Kindle?

I have to give Barnes & Noble (NYSE: BKS  ) some credit. Its Nook e-book reader, which will hit the market at the end of next month, is a lot cooler than I thought it would be.

Pass the salt shaker so I can eat some of my own words.

"The problem, of course, is that there's no way that B&N will be able to match Amazon on price," I wrote last week.

Wrong! Nook is available for pre-orders at $259, the same price point as Amazon.com's (Nasdaq: AMZN  ) Kindle, yet with a superior spec sheet.

"If it's successful, B&N will wean readers off its bricks-and-mortar stores," I also wrote.

Wrong! In a neat wrinkle, the Nook may actually encourage more visits to the company's superstores. Here's a feature mentioned on the nook.com website:

Visit the store, turn on your Nook, and see what pops up on your screen. It's as simple as that. You will get exclusive content, special discounts, and more. And soon, you will be able to read entire eBooks for free at your local Barnes & Noble.

Let the potential sink in. Instead of a digital reader that encourages you to kiss off bookstores forever, the Nook will encourage owners to make regular visits. Think about the possibilities.

  • Walk into a B&N store, and the screen can display a scannable coupon for 30% off a cup of coffee or a deal for a free pastry with a latte purchase.
  • Every day can bring new deals -- on digital or physical books. That will encourage repeat visits.
  • Even if the incentives are digital -- such as the free e-book that can be read in-store -- it still creates the opportunity to move impulse items and shop for gifts for the non-Nooked.

Just as Blockbuster (NYSE: BBI  ) tried to use its stores as an advantage over Netflix (Nasdaq: NFLX  ) when it introduced in-store DVD exchanges to its Total Access mail plan, B&N is going where Amazon or Sony (NYSE: SNE  ) can't -- unless they decide to partner with retailer Borders (NYSE: BGP  ) or a smaller retailer.

Nook is also taking a page out of Microsoft's (Nasdaq: MSFT  ) Zune playbook by offering social sharing. However, instead of sharing self-destructing tunes for a few days, someone can "lend" a digital book to a friend for 14 days. This may not be in the best interests of B&N and book publishers, but it's a realistic solution to real-world books that also get passed around.

The Nook may still fail. The Nov. 30 release date may be too late to gain momentum during this critical holiday season. These things may prove to be buggy or shoddy. There may be supply-chain problems.

However, you have to like B&N's chances. It is most definitely not phoning it in with a half-hearted effort.

Do you own an e-book reader, or will you be springing for one over the holidays? Share your thoughts in the comment box below.

Amazon.com and Netflix are Motley Fool Stock Advisor recommendations. Microsoft is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services free for 30 days.  

Longtime Fool contributor Rick Munarriz has been a Kindle owner since last year. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He owns shares of Netflix. The Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 21, 2009, at 11:59 AM, TMFBuffjan wrote:

    With great anticipation I bought a Kindle a couple months ago. I fell in love within 30 minutes.

    I don't know what the nook will bring in terms of upgrades to the Kindle, but I applaud them whatever they are. Competition almost always works to the benefit of the consumer.

  • Report this Comment On October 21, 2009, at 12:36 PM, ezmoney70 wrote:

    This is brilliant. These guys are onto something really big with this concept - game changing type stuff. This business model has the ability to save retail stores - online content (ecommerce, payments, media, etc - anything that is available through the internet), on a handheld device, only available when you are in the store. Absolutely brilliant. This model truly could save retail.

  • Report this Comment On October 21, 2009, at 12:44 PM, ezmoney70 wrote:

    Watch for other retailers to adopt this like wildfire over the next 2-3 years. This business model expands well beyond bookstores. In fact, it's got nothing to do with books. It is simply a way to lure people into a storefront.

  • Report this Comment On October 21, 2009, at 12:57 PM, riffraffer wrote:

    And you didn't even mention B&N will also soon be offering the Plastic Logic Que, as well as the iRex. Rather complete set of eReader choices...

  • Report this Comment On October 21, 2009, at 7:50 PM, tengrandchicago wrote:

    Borders will be in a lot of heap if they don't figure this market out. Target and Sears joining the book war doesn't help. Looking beyond books, retailers are making moves to stake out their e-commerce territory as the holidays approach. Amazon, Walmar, Target,and Sears have the resources to pour investments into this... Borders does not.

  • Report this Comment On October 22, 2009, at 3:56 PM, lquadland10 wrote:

    I hope it works. As an employee at a local bookstore as a bookseller. Well lets just say not only do I love my job. I want to keep it during the downturn. ;-)

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