E-Reader Watch: Kindles Head To Staples; Borders Lowers E-Reader Prices

Target won’t be the only bricks-and-mortar retail outlet for Kindles much longer. Amazon (NSDQ: AMZN) is adding the Staples office supplies chain to the mix this fall, making that two options for would-be buyers to try out the device. The deal will put Kindle in Staples — the chain has more than 1,500 U.S. stores — just in time for the 2010 holiday season. Staples’ global presence suggests the possibility for some international expansion but U.S. consumers are the target for now as in-store e-reader competition heats up.

Kindle’s lack of retail presence until recently should have been one of the biggest advantages for Barnes & Noble (NYSE: BKS) when it launched Nook late last year. But hampered by production and logistics issues, B&N couldn’t make the most of it during the 2009 holiday season. Now, the chain has hands-on display areas in its stores, with elaborate setups in its largest stores. It’s also adding other devices. It also has more competition for bookstore buyers with Borders ramping up. B&N, which recently put itself up for sale, is banking heavily on digital.

Meanwhile. Borders has revamped its e-reader strategy, moving beyond the idea that having a Sony (NYSE: SNE) kiosk is enough. It launched an e-bookstore with Borders-backed Kobo, added players from Kobo and Aluratek and made plans for in-store e-reader areas with a half-dozen devices. Today, following price cuts by Amazon and B&N, it lowered prices on the devices already on sale and those in the pipeline effective Sept. 1. The Kobo dips below the new $139 Wi-Fi-only Kindle to $129, while the Aluratek Libre drops to $99.99. The Velocity Micro Android-based Cruz Reader R101 can be pre-ordered $199, while the Cruz Tablet T103 is $299. The touch-screen color devices may be a draw once Borders gets e-reader buyers in the store but between the prices and the lack of name power, they also could get lost.

Borders is also making some other changes as e-readers catch on and consumers change buying habits, swapping some book space for Build-a-Bear sections and expanding its much-tweaked loyalty program. The chain is keeping its free rewards program based on purchases and adding a paid Borders Rewards version for $20 that will guarantee certain discounts and free shipping.

B&N has done a good job weaving the in-store experience, the Nook and its Nook e-reading platform but has been less successful when it comes to connecting it all to its paid loyalty program. If Borders can find a way to do that, it could encourage some loyalty from e-buyers. Borders PR tells me the program will offer discounts for some e-books but “however due to the agency model..not all are included.” More details in the release.