Overstock gets (e) book smart with Barnes & Noble
December 6, 2011 11:51 AM
Mass merchandise e-retailer Overstock.com today ventured into e-book sales through an arrangement with bookseller Barnes & Noble. Overstock now connects its shoppers who want to buy e-books to BarnesandNoble.com.
Consumers browsing print books on Overstock.com product pages now see options to buy an e-book version of those titles on BarnesandNoble.com. For example, an Overstock.com product page for a print copy of Suzanne Collins’ “The Hunger Games” also includes the Barnes & Noble price for the e-book and a link that takes the consumer to Barnes & Noble’s product page for the e-book. Consumers who wish to buy it complete the purchase on BarnesandNoble.com.
Overstock.com president Jonathan Johnson says it has an affiliate relationship with Barnes & Noble and that the two companies will share the revenue from e-book sales resulting from Overstock directing traffic to BarnesandNoble.com. He declines to reveal the financial details of their arrangement but says any sales that result will be incremental for Overstock, as it did not sell e-books previously. “We’d done really well selling refurbished Nooks and e-book accessories and we felt it was time to at least dip our toe in the water with digital books,” Johnson says.
Johnson did not directly address why his company decided to work with Barnes & Noble and not Amazon.com Inc., whose e-book store and Kindle reader lead the market. But he says Overstock.com entered the e-books arena with Barnes & Noble because the two retailers’ customer demographics were similar and the retailers had an established working relationship. Johnson says Overstock is a leading seller of refurbished Nook e-reader devices. “It made sense as we ventured into digital that we go with them,” he says. “Barnes & Noble is a great partner to work with and we were eager to flesh that partnership out.”
Peter Hildick-Smith, CEO of book audience research firm Codex Group, says Barnes & Noble benefits from the pairing particularly because Overstock already sells Nook devices, and e-reader owners tend to be loyal to the device maker's e-bookstores. "In digital reading you read the brand you own," he says. "So Barnes & Noble's No. 1 business goal right now is first to get as many Nooks into as many book buyers hands as quickly as possible. Once a book buyer owns a Nook, Barnes & Noble gets the majority of that customer’s e-book buying loyalty going forward."
Johnson says he doesn’t think marketing the e-books on product pages will cannibalize Overstock.com’s own print book sales. “When looking for books, consumers mostly look for one kind or the other. We think offering the other option on the same page makes the most marketing sense,” Johnson says.
Overstock.com, No. 27 in Internet Retailer’s Top 500 Guide, also includes “Nook Books” as a subcategory page within books. It takes consumers to a page with the heading “Nook books brought to you by Barnes & Noble.” Consumers who click on a featured book category or title connect to the applicable page on BarnesandNoble.com. Barnes & Noble Inc. is No. 41 in the Guide.
Overstock.com customers who do buy an e-book on BarnesandNoble.com won’t accrue Club O Rewards points for Overstock.com’s loyalty program at this time, Johnson says. He says if the e-books venture proves successful it may add the points offering later.