Barnes & Noble has decided not to stock any Amazon published books in its 700-plus stores, according to a statement emailed to Bloomberg Businessweek's Brad Stone and quietly broken on Google+ Tuesday.
Barnes & Noble Chief Merchandising Officer Jaime Carey said the decision is based on "Amazon's continued push for exclusivity with publishers, agents and the authors they represent." Carey said that Amazon "has proven they would not be a good publishing partner to Barnes & Noble as they continue to pull content off the market for their own self interest."
Well, Amazon and Barnes & Noble clearly aren't business partners, they are competitors. And this sort of fight isn't new.
One of the reasons PepsiCo spun off Taco Bell, Pizza Hut and KFC in 1997 into what is now Yum Brands is that the company faced an uphill fight convincing other fast food chains to offer their flagship beverage line since in doing so, those chains would in essence be helping their restaurant competition. The restaurants, especially the corporate owned units, continue to offer Pepsi products exclusively.
Except when they violate anti-trust laws, exclusive distributorships are certainly legal. According to Chicago based law firm Keeley, Kuenn & Reid, "Since 1977 the courts have held that vertical non-price restrictions -- such as exclusive distributorship agreements -- are not per se (or always) illegal under the antitrust laws. Instead, these arrangements violate the antitrust laws if their effect may be to substantially lessen interbrand competition or tend to create a monopoly in any line of commerce."
Barnes & Noble's decision to not carry Amazon titles in its "showrooms" is more of a public relations effort than a true "declaration of war." After all, Barnes & Noble said they don't have much demand for Amazon titles in their retail stores and the retailer will continue to sell Amazon books on its bn.com website. You can even buy a Nook e-reader on Amazon.com, sold by Barnes & Noble, albeit at a price premium in true Barnes & Noble tradition.
So called "brick and mortar" stores are definitely locked in a major battle with more cost efficient online retailers, especially in commodity new book titles. In June I moderated a discussion about California's new Internet sales tax law between Becky Warren, representing the Alliance for Main Street Fairness, and Rebecca Madigan, executive director of trade group Performance Marketing Association.
On Dec. 8, Amazon held a special promotion offering discounts to customers simply for using their price comparison app to check an item in a retail store. Amazon's app will bring up an item either by scanning its bar code or by simply taking a photo of it on the shelf.
In January, the Wall Street Journal reported that Target Corporation had sent "an urgent letter" to its suppliers encouraging them to develop exclusive products for the retailer that would make it more difficult for consumers to easily compare prices.
Since the beginning of commerce, retailers have used various tactics to try and convince shoppers they are getting a great deal. Virtually every store in a shopping mall offers most of its merchandise on perpetual sale.
But in this day of price comparison apps and easy internet shopping, retailers are fooling themselves if they think they can survive by employing legacy tactics that worked only because consumers didn't have immediately accessible price comparison information right on their phone.
Companies that face this reality and adapt to it will survive. The rest will be absorbed or simply go down with a lavish final sale, one ordered by a bankruptcy court.
Circle Dan on Google+: http://gplus.to/mcdermott