Today a tough week got tougher for Barnes & Noble, as the book retailer had a rock-em-sock-em analyst call after warning earlier in the week about disappointing earnings.

The poor earnings were mainly due to the Nook division, not good for a company that bet its future on the digital platform. According to Laura Owen, B&N indicated on the call that Nook sales (which include sales of the Nook devices and digital content sales) were down 26% year over year, which compares to only a 2.2% decline for the brick and mortar business.

So what’s the problem here? First off, while B&N is a clear leader in traditional physical book retailing, they play a distant third fiddle in digital compared to Amazon and Apple. Not only that, they’ve been falling further behind, with both Apple and Amazon growing their e-book business year over year according to analysis and company statements.

What this tells me is that, if one were to pick one major advantage – physical retail, e-commerce or a device  – from which to get one’s footing in digital, do not go with bricks and mortar. This is a rule that goes beyond books to other content categories; Blockbuster proved before B&N that dominant retail positions don’t guarantee digital success, and I believe GameStop should be very worried about the digital transition heading into the next-generation for game consoles.

This is not to say physical retail does not have a place, but I believe physical retail works better going the other way, i.e. by strengthening a dominant device and/or digital position with physical storefront. Apple has shown this to be true, and I think Google could as well.

All that said, I don’t believe large market share at brick and mortar is a leverage-able enough as the primary competitive advantage.