Barnes and Noble SWOT and PESTLE Analysis

Strength

1. Strong retail presence across North America : Barnes and Noble has a rich history that can be traced back to 1873 although it officially became Barnes and Noble in 1971 when bookseller Leonard Riggio acquired it and opened the first flagship Barnes and Noble store in Fifth Avenue, Manhattan, New York. Soon Barnes and Noble became the largest retail bookseller in the world. As of 2021, the company operates more than 699 bookstores across 50 states and they also own one of the world’s leading e-commerce book sites, BN.com. Between their retail bookstores and online platform, Barnes and Noble sells approximately 155 million physical books every year. They are also America’s second largest retailer of magazines, selling over 5,500 magazine titles and 1,000 newspapers. Barnes and Noble Education also has operations in India where they sell study materials, educational content, both physical and online. India’s thriving educational atmosphere is good for sales and raising profits.

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Weakness

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Opportunity

1. Expand Digital segment offerings and customer base : The COVID-19 pandemic disrupted all business segments and adversely affected revenues of the book industry. Stores were shut down in most states due to government orders to control the spread of the virus. Barnes and Noble is mainly a physical presence, with bookstores across North America. B&N Education also has several bookstores across colleges and universities. With campuses closed, students are relying on online modes of study and e-study materials. Barnes and Noble’s online platform, Student Brands is a subscription-based service that provides writing services for students. As of 2020, Student Brands had a growing user base of 100,000 learners across different countries. Sites under Student Brands include: bartleby.com, 123HelpMe.com, PaperRater.com, StudyMode.com. Foreign sites are TrabalhosFeitos.com, Etudier.com and Monografias.com in Brazil, France, and Mexico respectively. These online study platforms use a mix of data analytics and AI to supplement students’ learning across a digital platform. Barnes and Noble should focus on expanding these services in the near future as online mode of study has become an integral part of almost every student’s life.

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Threat

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Political

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Economic

1. Fall in consumer discretionary purchases : The COVID-19 pandemic led to huge economic repercussions with millions of people around the world losing their jobs and many others living in uncertainty amidst an unprecedented health crisis. Loss of jobs and overall weak economy means that consumers have less money in their hands to spend on discretionary products. Certain economic conditions or events, such as a contraction in the financial markets, high rates of inflation, high unemployment levels, etc., decrease consumer disposable income. Moreover, unavailability of consumer credit, higher consumer debt levels, higher tax rates, higher interest rates, higher fuel costs, also lead to slow consumer spending. Reduced consumer spending is not only reducing demand for products but also requires companies to incur increased selling and promotional expenses. However, consumer spending is expected to pick up in 2021 and economic optimism is rising in the developed countries.
In March 2020, US book sales slided by 8.4% to $667 million. Bookstore sales plunged by about 33% during the same period. The educational publishing sector saw the steepest overall decline due to campuses being shut down across the country. University Press books saw a steep decline of more than 21%. On the other hand, digital audio books saw a surge in sales as customers chose cheaper options during the economic downturn.

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Social

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Technological

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Legal

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Environmental

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