Barnes & Noble's online sales have grown less than 4% in the past three years, while online competitors such as Amazon continue to outpace Barnes & Noble.
Younger generations of consumers spend more leisure time surfing the Internet or using high-tech products like video games and iPods, rather than reading. This could pose a serious problem for traditional booksellers like Barnes & Noble as these generations grow up, especially if the younger generation uses the Internet as a source of reading material rather than books.
Sales of bestselling books account for about 5% of Barnes and Noble's annual sales and can drive traffic into stores. However, competition for providing these popular titles forces Barnes & Nobles to heavily discount these books to the point where these sales can negatively impact profitability.