Nook May Be Barnes & Noble’s Salvation

Barnes & Noble released its first-quarter earnings report on Tuesday, revealing that sales of its Nook e-reader and e-books have been helping to offset the company’s sinking physical book sales.

Barnes & Noble Nook Color

The Barnes & Noble Nook Color

Total revenue was up 2 percent to US$1.42 billion. Store revenue was down 3 percent to $1 billion. Online revenue was up a whopping 37 percent to $198 million. The retailer posted a loss of $56.6 million, or 99 cents a share, for the quarter.

Barnes & Noble predicts a bump of between $150 and $200 million in the next year, with an expected influx of shoppers coming from the failed Borders chain. Barnes & Noble is expecting its highest holiday numbers in five years. It also forecasts sales of the Nook and e-books will more than double this fiscal year to $1.8 billion. The news sent the company’s shares up 8 percent.

Barnes & Noble has bet its future on the success of the Nook. Sales of Nook devices rose 140 percent to $277 million for the quarter. Nook is the No. 2 dedicated e-reader after Amazon’s Kindle. If the Nook lives up to the company’s projections, it will account for a fourth of the chain’s sales and all of its growth.

Nook Draws Big Investors

The Nook may be key to Barnes & Noble’s credibility with investors. It has helped the company distance itself from the troubles that doomed its competitor Borders.

“First of all, the Nook is Barnes & Noble’s only viable business, and it’s the reason both [investors] Ron Burkle and John Malone have taken such an interest in the company,” said Porter Bibb, managing partner, corporate finance, at MediaTech Capital Partners.

“Barnes & Noble will, inevitably, have to downsize its bricks and mortar empire,” Bibb told the E-Commerce Times.

While Barnes & Noble continues to run a powerful retail chain of stores, those stores may be a burden rather than an asset in a publishing world that has very successfully taken the plunge into digital products.

“Print books will not disappear completely, but in June, for the first time in history, Amazon announced it sold more e-books than print books, said Bibb. “That trend is irreversible as more and more readers and tablets hit the market.”

The Nook may end up the leading dedicated e-book reader once Amazon commits deeply to a tablet.

“The Nook is a super way to read and store books. Its features and functions make it far superior to the Kindle, unless price is the only criterion,” said Bibb. “Amazon’s tablet will obsolete the Kindle anyway, and Barnes & Noble should have the e-book market to itself in a year or two.”

Barnes & Noble and its investors are betting that Amazon’s tablet will take the company’s eye off the Kindle. That could leave Barnes & Noble as the go-to company for consumers who want a device for books only.

“Sure, you can read books on an iPad or any other tablet, but enough people will want a dedicated e-book reader to give Barnes & Noble a viable future,” said Bibb. He pointed to the continued popularity of the iPod as an example of consumer preference for a dedicated device.

“You can get songs on an iPhone or a tablet too, but millions of people still like their music on an iPod,” he said.

B&N’s Future Depends on Nook

The Nook platform is a valuable asset because it gives Barnes & Noble a way to directly distribute e-books to its readers. The Nook Color is also important because it integrates popular Android and tablet features.

“In many ways, Nook sales are a great predictor of future Barnes & Noble book sales, because the Barnes & Noble e-commerce site will supply most of the content that a Nook owner buys,” said Carl Howe, director of anywhere consumer research at the Yankee Group.

“The Nook Color also broke new ground in attracting e-readers by using an Android color tablet as the base platform,” he told the E-Commerce Times.

An Amazon tablet could shake things up a bit for the Nook.

“Nook sales may take a hit when Amazon introduces its own tablet, but I think there’s plenty of room for multiple e-book and e-reader vendors in such a young market,” said Howe. “E-books are where the growth in publishing is, so the Nook is the means by which Barnes & Noble is shaping its future business.”

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Cryptocurrency is a viable hedge against inflation: Agree or Disagree?
Loading ... Loading ...

E-commerce Times Channels

Back-Office Finance Automation: The Foundation of a Solid E-Commerce Enterprise

accountant using e-invoice software

E-commerce retailers and direct-to-consumer businesses of all sizes are dealing with a ripple effect of business challenges. These include continued inflation increasing the cost of goods and squeezing customers’ disposable income, global supply chain shortages, increased out-of-stocks, and more demanding customer expectations.

Add to that, the Great Resignation has led to a mass exodus of vital frontline and back-office workers, leaving retailers understaffed and hard-pressed to provide the service that customers want.

Fortunately, new digital technologies continue to help e-commerce businesses innovate by expanding online shopping options, improving forecasting and inventory management with AI-powered analytics, upgrading customer service with RPA customer-service bots, enabling last-mile optimization systems for omnichannel experiences, and increasing customer buying power at the point-of-sale with services like buy now, pay later.

These are all incredibly important capabilities supporting the front end of the business. But there are also technologies that work behind the scenes. like AP automation, that can deliver important value and quick ROI by helping e-tailers and direct-to-consumer businesses streamline cumbersome finance workflows, improve controls and security, reduce costs, empower remote employees, and help offset staff shortages.

What are the benefits to e-commerce companies of automating AP processes?

Automating accounts payable processes provides several advantages:

  • Faster, more efficient finance processes and workflows
  • Fewer errors and less manual effort required to correct them
  • More satisfied and productive staff
  • Reduced full-time equivalent (FTE) requirements and operational costs
  • Increased cash-back rebates from suppliers
  • Happier vendors better positioned to support supply needs
  • Better cash flow management
  • Reduced risk of fraud

Manual Processes Create Inefficiency and Hinder Growth

Businesses still receive a surprisingly high number (25%) of paper invoices, and 47% are not using any type of invoice workflow automation solution. E-commerce is no exception. In my experience working with e-tailers and direct-to-consumer businesses, many are still making more than 50% of their supplier payments via check.

AP staff at these businesses are wasting valuable time and effort opening paper invoices, capturing and entering data, emailing or calling approvers, printing and mailing checks, and responding to questions from suppliers.

It’s a problem in any industry, but it becomes even more complicated in e-commerce where finance teams tend to manage many supplier invoices. In addition, as supply chain disruptions continue, it’s important for e-commerce businesses to do everything they can to maintain reliable inventory sources. This includes getting key vendors paid on time.

The Power of AP Automation

Modern accounts payable solutions can automate the entire invoice-to-pay process by providing a single workflow to capture invoices, automatically sync data in ERP and finance systems, simplify approvals, and send payments however suppliers prefer to receive them, whether that’s check, ACH, virtual card, or even cross-border.

These solutions can address much of what an e-commerce business needs including vendor onboarding, invoice capture, coding, approvals, and supplier management — as well as payment authorization, execution, and reconciliation.

The benefits to accounting and finance teams are obvious, but they also provide important advantages for many other parts of e-tail and direct-to-consumer businesses. Here are six examples:

1. Streamlined Invoice Workflows

Many finance teams spend the bulk of their time on manual, paper-based invoice processes. Full invoice-to-pay automation captures and codes invoices with far fewer errors than manual data entry and significantly reduces time spent processing invoices.

2. Improved Visibility and Control

Intuitive tools and centralized reporting provide users with detailed views of days payables outstanding (DPOs), pending or past-due invoices, and other category reports. In addition, specific employees can be granted access to the same level of reporting to gain real-time insights into invoice processing.

These capabilities help e-commerce businesses make the right decisions related to payment timing to maximize working capital and take advantage of early-pay discounts.

3. Reduced Costs and Generation of New Revenues

AP automation delivers where it matters for e-commerce businesses: top-line revenue growth and a stronger bottom line. Eliminating paper-based processes and manual data entry and using e-payments can reduce costs per invoice by up to 430%. In addition, rebates from virtual card payments can generate significant new revenues delivering a complete ROI while funding other parts of the business.

4. Increased Staff Productivity

The time employees spend on manual payment processes could be spent on higher-value initiatives such as optimizing receivables, providing proactive support to suppliers, or developing new internal processes.

For managers forced to multitask, it means less time in the back office and more time focused on customers. When hiring back-office help is tough, AP automation helps e-commerce businesses grow without adding headcount.

5. Empower Remote Work

AP automation allows finance staff to review and approve invoices or pay suppliers from anywhere, using any device. Similarly, month-end closing and AP audit data can be accessed remotely, further minimizing the need for staff to be in an office or store.

6. Stronger Vendor Relationships

Brands, wholesalers, and other suppliers are the lifeblood of any e-commerce business. The industry is already suffering from inventory issues; the prospect of late or missed payments adds additional risk of disruption.

Improving the ability to pay on time builds better relationships, adds leverage to negotiate discounts, and minimizes the chance of additional supply chain issues.

The Right Strategy

E-commerce is built on digital customer experiences and processes. That same thinking needs to be applied to the financial back office. Automating foundational processes like accounts payable can provide e-commerce operations with proven methods to overcome key supply-side challenges and deliver far-ranging benefits that help all facets of the business.

Matt Friend is VP, product and program management, at MineralTree, a provider of accounts payable and payment automation solutions.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories