Nook Slashes Prices Again in the UK: Struggling or Getting Aggressive?

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By Lauren Indvik2013-09-29 23:30:07 UTC

It looks like the Nook's woes are not just confined to the U.S. Earlier this week, the Barnes & Noble subsidiary announced that it was cutting the price of its Nook Simple Touch GlowLight ereader to 49 pounds ($79) — almost 50% off the original price. Just five months earlier, the company slashed the price of its entry-level Simple Touch Reader to 29 pounds ($47) from 79 pounds ($127).

Such cuts are usually a sign that a product is not selling well, or a new version of said product is on the way. In the Nook's case, both scenarios may be true: Sales of ereaders and content have declined over the past two quarters, and both devices have been available on the UK market for nearly a year.

But Jim Hilt, managing director of Barnes & Noble's digital reading division, insists the changes are all positive, and that the price reductions are part of a bigger, more aggressive strategy to capture entry-level digital readers in the UK. Essentially, B&N is willing to take a deeper cut on hardware sales now for a longer-term gain in ebook sales, and ultimately a greater share of the UK ereading market.

SEE ALSO: Barnes & Noble: When Great Isn’t Good Enough

"A number of people in the UK haven't made the transition [to digital reading devices]," Hilt said in a phone interview with Mashable earlier this week. "There's a perception that they're priced too highly, or the quality of product hasn't been sufficient."

Cutting the price of the Nook Simple Touch to 29 pounds in late April certainly helped move it off the shelves. Matthew Cashmore, the digital director of Blackwell's, told Forbes that since the price reduction, the bookseller is struggling to keep the Nook Simple Touch in stock, and that ebook sales have gone "through the roof."

Cashmore added that the Nook has struggled to penetrate the UK market to date because it entered the market late, and has fewer retail partners than other manufacturers. "The price drop and the sale via many retailers has essentially brought the reader to the broader market."

By offering the Simple Touch at such a low price point, Hilt said the Nook was able to pick up UK customers who hadn't yet made the transition to ereaders. It's a hook-them-and-keep-them strategy: Hilt added that the company has a "strong ability" to keep first-time customers in the Nook family once they've purchased a device. However, he declined to say how much B&N is losing on each ereader sale.

Whether the 49-pound price tag will have the same shelf-moving effect on the GlowLight ereader remains to be seen. Thomas Husson, vice-president and principal analyst at Forrester, noted that the price reduction makes the GlowLight the only ereader with an integrated light in the UK market that has a price below 50 pounds. "The price cut seems to indicate they want to fight Amazon at their own game with the lower prices," he wrote in an email to Mashable.

"Looking at the ranking of the Nook apps in the UK Google Play and Apple App Store, it seems like B&N has not yet managed to create an ecosystem around their devices in the UK," Husson added. By getting new digital readers early, however, perhaps the company can accomplish exactly that.

Image: Spencer Platt/Getty Images

Topics: amazon, Business, Gadgets, kindle, Marketing, Mobile, nook, UK, World