For branding experts, co-branding is nothing new, and often bringing to very strong brands together has a synergistic effect that not a single of those brands could do alone. For instance, let's say an HP tablet computer running Microsoft Windows, and having Intel inside might be an example of co-branding in a personal tech product. Recently, it was noted that Target Stores was going to place miniature Apple stores inside, this is a retailing co-branding example, with huge implications for the marketplace, and for their competitors. If you want to know about Top apple store please read this article.
In the Wall Street Journal on March 12, 2012 there was an interesting albeit not too surprising article titled; "Boutiques at Barnes and Noble - Bookseller Widens an Experiment, Adding Store-Within-a-Store for Penguin Titles," by Jeffrey Trachtenberg. The article noted that Barnes & Noble was already selling its "Nook" eReaders inside its stores, in a co-branding kioski synergistic way. Perhaps you've seen this if you've been into one of their stores recently, and noticed right up front as you walk in there is a desk, with a small area dedicated to selling Nooks.
Okay so, I'd like to talk to a little bit about co-branding, and bring up the following similar situations going on in the marketplace, and why you shouldn't be surprised that Barnes & Noble has decided to go along with this retail strategy.
Shelf Space at Grocery Stores
Co-Branding in the C-Store Sector
Franchising and Co-Branding Strategies
Tom Hanks, Meg Ryan Movie: "You've Got Mail"
Online Competition and Long Term High Cost Store Leases
Right now many Barnes & Noble stores are anchor tenants in very large malls, and therefore they already understand this synergistic aspect of being in those malls, and now they are turning themselves into a mini mall within the store. You can understand that. Also, most of the grocery stores now do charge shelf space for the products and their placement. Further, there is lots of co-branding going on in the franchising industry, and if you go into any C-Store (convenience store such as a gas station minimart), you will see co-branded kiosks, fast food brand names, and all sorts of other businesses within the business.
If you ever go to a travel center or truck stop, you will see the same thing, and they do this because it works, as each brand name draws a different type of clientele into the establishment, and once they are there they are all helping each other. One of the reasons I'm not so surprised that someone came up with this brainstorming at Barnes & Noble, perhaps in one of those groupthink sessions is because of that popular movie "You've Got Mail," starring Tom Hanks and Meg Ryan. In other words it outlined such a strategy right in the movie.
Lastly, with all the online competition, and the fact that Barnes & Noble has long-term high cost store leases that they cannot get out of, they have no choice but to figure out a way to pay for that space even if they aren't selling the volume of books they used to sell before. Also, Barnes & Noble has Starbucks coffee stores within their bookstores, and often they account for 35 to 45% of the revenue volume of the big box bookstore, even though they only occupy a small space within the store.
