Tuesday, February 26, 2013

From B&N to the Future of Physical Stores

I came across this article talking about Barnes & Noble’s plan to make its Nook e-book business as a separate company. A deal with Microsoft and Pearson is valued at more than $1.7billion, way larger than B&N’s stock value, which is $800million. What seemed more interesting than the article itself is the video that is attached to it. The video shows B&N’s main distribution center. The VP talks about how millions of boxes are packed and shipped from the building.


   It seems that all types of business are moving to the web, and this brings to my question: How will the functions of the physical stores change in the future? If the bulk of sales and revenue come from online stores, retail stores will function more as a brand advertisement and product display center. If this is the case, then companies like B&N are likely to continue shut down physical stores and leave those that are at the prime location for brand-messaging purposes. Then, what factors regarding supply chain should companies consider when they close a certain number of physical stores?


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