One of the big headlines circulating today is that, while next month's final installment in the wildly popular Harry Potter series should drum up major traffic for booksellers, there is a negative twist -- the boy magician is also a huge drain as bookstores try to gain advantage over one another. This is no surprise to many of us, though. In such a cutthroat industry, even an amazing phenomenon like Harry Potter can't quite save the day.
Back in February, one analyst upgraded Barnes & Noble's
All the booksellers -- including Amazon.com
Big hits drive traffic to booksellers, but it's still tough going for Borders and Barnes & Noble, both of which have been pushing hard to get a leg up on the competition; their loyalty programs offer deep discounts to try and lure more and more customers (from one another). Amazon.com is no stranger to discount pricing, either, but at least it offers many different types of products and has the edge of its original tagline, "the world's biggest bookstore" -- it's much easier to find anything you want at Amazon.com, even if what you're looking for resides further down the so-called Long Tail of commerce.
Given the competitive landscape, investing in bricks-and-mortar bookstore chains like Borders and Barnes & Noble just doesn't appeal to me these days; they're hard-pressed to be able to turn even blockbuster hits like Harry Potter's latest adventure to their advantage, profit-wise, and that's really saying something. (And of course, with this installment, Harry Potter mania will come to a close.) Until they can figure out innovative ways to create loyal customers without slashing prices on their bestsellers, it's hard to foresee sustainable growth ahead.
For related Foolishness, crack open a good article:
- Some of us believe there's little magic for booksellers.
- Harry Potter's magic comes back.
- What's the "Long Tail"? We asked Wired editor and author Chris Anderson about it in this interview.