Barnes & Noble has been criticised by the Advertising Standards Authority (ASA). The bookseller was rapped for selling out of Nook Simple Touch e-readers in the UK shortly after advertising them at the heavily discounted price of £29 (down from £79).
Barnes & Noble launched the heavy discount promotion in April last year and shortly afterwards stores sold out of the device, after they began selling at over 120 times the normal rate. At the time, The Bookseller reported that due to “unprecedented demand” customers could not buy the products from many stores including Blackwell’s, Sainsburys, Foyles and Argos had sold out of the device.
The ASA received a complaint from a member of the public challenging whether there was sufficient availability of the product at the advertised price, and that complaint has been upheld by the Authority.
In its defence, B&N argued that prior to running the ad the company had made a reasonable estimate of the demand for the product based on recent and reliable data on the UK sales levels for e-readers. The company said the estimating process involved both US and UK sales and marketing executives and forecast that sales would increase between 10 and 20 times the previous sales levels. However, sales of the product during the promotion increased over 120 times the normal sales rate.
The company then put a notice on its Nook website alerting customers that the product had sold out. B&N also instructed its advertising agency on 3rd May to stop running the ad.
However, the ASA said: “The ASA considered that the fact the product went out of stock at a number of the retail stores and that remedial action had to be taken meant that, as acknowledged by Barnes & Noble, their demand estimates were significantly lower than the actual response to the offer . . .
"Barnes & Noble had based their estimate on recent data for UK sales of e-readers. However, we considered that they should have based their estimate on the response rate to a previous similar offer of the same or a similar product.”
Blackwell’s Charing Cross Road manager Steve Orchard told The Bookseller the £29 e-reader was still selling in high numbers at his store three months on. “Customers struggle to say no to it at £29,” he said.