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Books, Brunches, and Booze: Barnes and Noble to Serve Alcohol

Written by Nick Bravo | 7/11/16 3:00 PM

Barnes and Noble, which currently operates 640 bookstores across all 50 states, recently announced four new concept locations spread across the US that will include an expanded dining area that serves beer and wine. The move is one prong in a larger strategy to protect themselves from losing further market share to online commerce by expanding in arenas that seem unlikely to go digital.

I’ll Drink to that Intoxicating Wordplay

The new design will debut in New York, California, Minnesota, and Virginia, and will feature more seating and a full-service wait staff serving breakfast, lunch, and dinner.  The menu, crafted by a newly-hired executive chef, will offer “shareable American-style food” that they promise will surpass the premade pastries and sandwiches currently available at their Starbucks-partnered café. 

And while the broadened menu certainly sounds appealing, it is their move into alcohol that is most interesting—the locations will offer an assortment of wines and beers as the bookseller tries to craft a hybrid of retail and entertainment to drive sales.

“We wanted to create a better bookstore. We already have a café, so we said let’s have a much better food experience frankly. We think they’re going to drive traffic to the store and keep them in the store much longer,” promised President of Development and Restaurant, Jamie Carey.

You Can’t Ship an Experience Through the Mail

The move comes after over a decade of watching Amazon eat its market share, first in books, then music, and then in the gift section.  At first, they tried facing the competition head on, rushing to establish their own E-book reader—the disastrous Nook, which continues to lose the company money—but with these new concept locations, it seems they are changing course.

Now they are working to integrate “Amazon proof” pillars into their business model, and in-house restaurants and alcohol options are one such structure. “It’s something that can’t go online,” Carey observed.

Currently, food and drinks sold in their Starbucks-partnered cafes constitute almost 10% of their sales.  Increasing that percentage while lowering their dependence on goods that Amazon can readily undercut provides them a weapon to face the giant. 

Harry Potter to the Rescue!

Food and booze aren’t the only things that can’t be shipped in a cardboard box: In-house events—book signings, release parties (new Harry Potter books are coming!), and social meetups—are another key component of their strategy, with the company planning over 100,000 events nationwide this year alone. Many of these events focus on children, including story time, meet and greets with book characters, and events situated around booming categories like manga and coloring books.

The new restaurant concept can only support these in-house events, providing parents a space from which to supervise their children while enjoying an adult beverage and, hopefully, making a couple purchases of their own.  It also makes the bookstore an appealing first date spot, and Chelsea Handler book signings are going to be a lot more interesting when alcohol is involved.  In short, Barnes and Noble has provided a mechanism for a night out, and though Amazon has proven deft at shipping bulky and cumbersome packages, they have yet to deliver a complete evening experience.

Rising and Falling Action

With news of the new concept locations, Barnes and Noble stock rose 8%, signaling optimism that these aggressive moves will bear fruit.  However, there are a couple early causes for long-term concern.

First, recent news about the restaurant industry is not encouraging.  Americans are dining out less amid renewed fears of a declining economy, and though this could be a temporary blip, Barnes and Noble may have chosen the wrong moment to jump into dining. 

And second, with the recent opening of Amazon’s first brick and mortar store, and many more slated to come, Barnes and Noble will find it increasingly difficult to distinguish itself from an Amazon unshackled from boundaries of online commerce.  The final chapter has yet to be written.