We noted that in our travels among many supply chain management conferences, this was one of the view organizations that were actively leveraging social media based indicators to plan supply chain needs. In September of last year, this author viewed a presentationfrom Dan Gilbert, Executive Vice President of Operations for Barnes and Noble Nook group which provided an interesting perspective on bringing together both physical and digital supply chain capabilities. Perhaps Q4 was the significant sign post for Barnes and Noble management, opting to go one more quarter to determine the ultimate strategy to compete in this market. Thus, the entire tablet market has become highly competitive with consumers apparently opting for broader functionality tablets and readers manufactured by Apple and Samsung. The Nook family shipped close to a million units, but also suffered a significant market share decline. While Amazon shipped more than 6 million of its Kindle line of tablets, IDC reported that market share slipped over 4 points. According to IDC, worldwide shipments of electronic tablets during the holiday peak season grew by 75 percent to a fourth quarter record, thanks to lower selling prices and new product offerings. In early February, Supply Chain Matters commented on IDC’s latest report of tablet shipments. Eroding pricing in the market along with meager marketing budget did not help. In the end, although the Color Nook had comparable functionality to Amazon’s Kindle device, it could not amass the number of added apps, music and video offerings. The latest operating loss included a $133 million charge to write-off unsold inventory. This change of course coincided with the April ending quarterly earnings announcement that reported a 34 percent drop in Nook generated revenues and operating losses of $177 million. According to a report published in the Wall Street Journal, this book retailer will continue to make its own black and white Nook e-readers, however, Supply Chain Matters is not optimistic that this strategy will be sustaining. Instead, the retailer will opt for a co-branded color reader device produced by third-party manufacturers. It announced that it would stop producing its own Nook branded color tablet. Supply Chain Matters has often warned of the Amazon effect on manufacturers and retailers and now there is another victim.īusiness media has reported that after spending millions of dollars in an effort to compete head-to-head with Amazon on providing electronic tablets and e-readers, Barnes and Noble is changing course.
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