In the three years after Barnes & Noble took over sole ownership of Barnes & in 2003, the site's sales performance was up and down. But in 2007, the online arm of the retailer posted a 10.1% sales increase, helped by a strong fourth quarter, and the solid results continued into the first period of 2008: B& posted a 7.2% sales increase, compared to an increase of 1.1% for the stores. Marie Toulantis, CEO of B&, attributed the recent improvement to “a confluence of events.” One factor was an overhaul of the site last October that involved adding a number of new features as well as making the site more interactive and easier to navigate. Enhancements to B&N's membership program have also helped drive sales, as has the overall increase in online shopping, Toulantis said. All those factors resulted in a significant increase in visitors to the site last year—total visits hit 138 million, up from 70 million in 2006.

Among the upgrades introduced in the fall was a “see inside” feature that allows readers to view portions of a book online, similar to Amazon's Search Inside function. At launch, “tens of thousands” of books were in the program and, Toulantis said, B& has steadily added more in the succeeding months and is working out the logistical details with several large publishers that will add more titles from several large houses. The site overhaul also included a new book review feature, podcasts, and improvements and additions to its online clubs. Toulantis noted that the First Look Book Club has been especially well received—members receive advance galleys, mainly of new fiction titles, to discuss online. Earlier this year, B& added the Barnes & Noble Studio, which provides video and other original multimedia content about books and writers. The aim of all these enhancements, Toulantis said, is to have browsers on the site become more engaged and to provide suggestions and ideas to help them make purchasing decisions.

Although B& has added a number of products to complement its book offerings (most recently, subscriptions to magazines in both digital and print formats), “books remain the main driver of sales,” Toulantis said. “We are primarily booksellers,” she noted. In that role, B& was an early e-book seller (“too early,” Toulantis said) and is continuing to evaluate whether it should get back into that business as well as enter the digital audio market. Toulantis did not want to comment directly on the controversy involving Amazon's BookSurge print-on-demand subsidiary, but noted that B& does carry POD titles along with titles from self-publishers and could accommodate more of both.

Even as the site's revenue seems to be on a steady climb, its growth rate still trails Amazon, whose North American media group had a 29% sales increase in 2007. But Toulantis emphasized that B& also serves as a broadcast channel that promotes the entire company to consumers. “We want to give customers the choice to buy either online or at our stores,” Toulantis said.

* Excludes Calendar Club, Sterling
2004 2005 2006 2007 Total Change
B& $420 $440 $433 $477 13.5%
B&N stores 4,297 4,497 4,635 4,732 10.1
Total* 4,717 4,937 5,068 5,209 10.4
B& % of Sales 8.9% 8.9% 8.5% 9.2%