Consumer vs Consumer-Facing Devices

I want a Kindle. I mean, I want a Sony eReader. I mean...; ah, as much as I want to join the digital age of books, I am still on the sidelines because there is no single standard in eReaders. I’d be limited to one company's library - and I don't want to invest until I know how the battle for format is going to play out. Some pundits point out that this is no different than living in an iTunes world, but I disagree. With iTunes, if I want to rip a CD, I can. If I want to convert an MP3, I can. iTunes may not be compatible with other hardware, but a wide array of music files out there can be absorbed into iTunes.

Not so with eReaders -  at least not yet. As the Wall Street Journal pointed out last week, if you buy a Kindle library, you're stuck with the Kindle reader. Same for Sony.

But now there's the Nook, Barnes & Noble's entrée into the eReader space. I think it underscores the challenges - and opportunities - that retailers face in navigating consumer devices. What sets the Nook apart from the other two devices is the store experience. When you're in a B&N store, a Nook consumer has access to the entire electronic library, as well as special offers and coupons, loaded up via the device's wireless connection in the store (which is included).

Now, Kindle is also a retailer-provided device, but Amazon doesn't have any physical locations to tie it into, so it limits Amazon's ability to leverage the Kindle as a consumer-facing device to enhance the consumer's shopping experience in a store. And Sony's device is right out there on par with a cell phone - it's something an enterprising retailer might be able to tap into and leverage, but because they don't control the device, the quality of that experience may be limited.

The flip side is that once you get into providing consumer-facing devices, you suddenly find yourself in the consumer electronics business, even if you outsource it to someone else. It's your brand name on the label after all. Comments to RetailWire, featured below, highlight a lot of those challenges, including basics of forecasting and production.

Personally, I think the concept of the Nook is brilliant, and under-rated for its customer-facing capabilities. The quandary that all retailers face in trying to get in front of consumers during the shopping experience is whether to leverage devices that consumers already have (like mobile phones), or to invest in providing hardware that the retailer controls. The advantage for consumer devices: cheap. But challenging, because you have to play by someone else's rules (carriers or manufacturers), and you can't guarantee a high quality experience. The advantage for retailer-provided devices: high quality, with more control and thus more opportunities to leverage the device. However, it's not cheap. The Nook? It's a consumer-facing device - that the consumer purchases. It has enough value in itself to justify the purchase, but the real value for B&N is an opportunity to create a retail brand experience like no other. Brilliant.

About the author: Nikki Baird is a Managing Partner at RSR Research, a technology analyst firm specializing in consumer and retailer technology adoption trends.