Rocket Bomber - bookselling

If B&N will not compete on price (or cannot) what can it compete on? A true luxury brand relies on exclusivity, rarity and the Veblen effect. The Veblen effect says that a reduced price reduces the status of the product. (There is some Veblen effect occurring for readers at the 99¢ price point). A purveyor of mass marketed goods can almost by definition not be a luxury brand.

In the Best Buy article, the new CEO says that they are trying to eliminate price as an obstacle for purchasing. This weekend at Barnes & Noble, the lines were enormous. People love buying books for other people but I also was with someone who wanted to buy a particular book for a friend and it wasn’t in stock. The exact conversation went like this.

BN: We can order it for you.

Person: It’s $16 here and $12 on Amazon. Why don’t I just order it myself?

The aforementioned conversation is what Best Buy wants to avoid. A brick and mortar retail store that can’t compete on price or selection has to offer something else. What else can Barnes & Noble offer? Better service?

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These are two very different types of transactions: the “item in store, let me buy this” experience, and the “I have a *very* specific item I need” expectation.

The reality for bookstores, poor things, is that customers conflate these two all the time.

Customers don’t even realize what they are asking. Even some booksellers don’t recognize the difference anymore.

How can Barnes & Noble compete in 2014, and beyond?

Let’s ask the one guy who had answers:

1 July 2012

I can’t compete with Amazon on price, so the primary advantage of the physical storefront is convenience: a book, in-stock, down the street and available for pickup today. That’s why I say the bookstore (even the big box bookstore) is too small. 100,000 titles doesn’t even begin to scratch the surface, and for a customer base now accustomed to finding books on the internet, my 100,000 books might as well be 10,000. Every hour of every working day, we get a call from a customer asking for a book [a particular book, as this title was specifically blogged about or came up as the #1 result in a keyword search] that there is no way in hell I’d bother to stock. [*]

The customer who calls with an exact title, or ISBN, doesn’t need a bookstore; she could care less about the coffee or the comfy chair, all she wants is the damn book and a bare minimum of time spent in the car or in the store in the process of buying it. Today.

I think what this customer wants is a book distributor, a warehouse with a sales counter. The ‘big box’ was just a reasonable substitute so long as the economics worked out: A reasonably-large mini-distributor that could be easily duplicated in many communities — good enough for the 1990s, self-supporting at 1990s levels of consumer demand for books, and nice places to hang out in besides.

Obviously the landscape for book retail has changed, but despite what you hear from tech bloggers & clueless financial analysts the market for print books is *not* shrinking — it’s growing from a small core of bestsellers, genre fiction, & general interest titles into the long tail of millions of books published (a number growing each year, and accelerating in growth).

The mistake that many make is to call the Long Tail an internet phenomenon. The internet is a discovery tool, but the Long Tail is a change in customer Demand. Come, work the phones at my bookstore for a week: you can learn this first hand. My inability to meet this demand is because my bookstore-cum-distribution-center is too small, not because customer demand can ‘only’ be met by internet retail.

The very first question a customer asks when I say I don’t have a book is, “Well, does one of your other stores have it?” (You might even have asked this question of a bookseller yourself.) This tells me two things: first that the convenience of a book, available today, *now*, is more important than how far away the bookstore is — and second, that the unnecessary duplication of bookstores in every neighborhood is a burden on bookstore chains, not a desirable outcome.

A single, truly epic bookstore that stocked even more books would be able to serve a city-sized community better (and be a better investment) than 15 stores spread across a metroplex, each stocking more-or-less the same 50,000 books plus a truly random and pathetic sampling of everything else.

2 July 2012

Don’t just rethink the box, rethink the chain. Instead of opening up a smaller, pale imitation of a New York 5th Avenue bookstore everywhere, open up just 50-80 landmark bookstores. That might mean just one each for many cities – or one in a nearby city for some. Why dilute your single best selling point: stacks packed from one end to the other and to the ceilings, chock full of books. Double down on that bet – forget the ‘standard big box retail’ model and think big.

Sure, right now I can special order books for customers from the warehouse. Takes about a week, down here where I’m currently located. (I’m sure it’s better up at corporate HQ, since they built the damn warehouse in the state next door — fine for you, sucks for 200 million of your potential customers.)

Let me turn it around though: If all the books are in the warehouse, why not throw in a coffee shop right there inside the distribution center and open it to the public?

I would aver that the bookstore chain is too big, too spread out, and also played out: our customers don’t care enough anymore to support neighborhood bookstores at that scale. We need to open a truly humongous bookstore. Much like amusement parks (Six Flags, Sea World, Disney, et al.) maybe each US Census MSA would only support one – or rarely two or three. While we all love a neighborhood bookstore [& there is a place for such; I personally could generate business plans for bookstores on a sliding scale from bistro to Strand] the real need of most communities is for a single Landmark bookstore like the Tattered Cover in Denver or Powell’s in Portland — or yes, the Strand in New York.

I’m looking beyond books, however.

The future of retail depends on managing inventory, especially in the face of internet competition. Let’s consider a new model, a truly humongous bookstore that doubles as a distribution center: with a little advance planning you could open up a very small chain that covers hundreds of millions.

…

Not everyone would be willing to drive to a bookstore just to pick up a book — even if that bookstore was 4 acres of bookshelves under a single roof (about the size of a large IKEA, for scale). But if you could pick up a phone and call [or use a website] and know the book you need is there, that might change your mind. If you could know they had 20 copies of the book, and you needed 20 copies for your employees or clients, you’d be sending some lackey driving the 2 hours before he could sit down at his desk in the morning.

If this huge bookstore had not just a coffee bar, but also a pub, sit-down restaurant, hot dog cart, and ice cream shop — you’d plan your weekend around a trip.

There would be other ways to maximize the investment and key into “bookstore tourists” — topics I hope to cover in other posts. My point here was to build on yesterday’s column and show that there is a future for bookstores past the Big Box chain model. Additionally, if you chose to compete with Amazon on the internet, your massive bookstores are also fulfillment centers.

You don’t have to compete nationwide. Pick a market, serve that market. A single store in the right place can be the best bookstore for 30 Million customers — in person or with guaranteed 1-day delivery (at UPS ground rates, or via the post). A small chain of just 3 stores could easily serve 50 Million.

The 10 stores outlined above are within a 1-day delivery zone for 220 Million people, and within 2 days of another 70 Million customers. Looking at the map, a nice store in Denver would certainly plug in most of the rest to your network.

So, you want a nationwide brand that makes the most of internet searchability, access to customers, and that also features truly amazing bookstores that have the potential to be not just storefronts, but destinations?

Do we need a chain of 500 stores or do we just need 50? Or do we just need 10?

25 August 2012

Stick with me for a bit longer: IF the bookstore is a social space AND our sales depend, at least in part, on foot traffic in stores AND we have to put up with all you people anyway: why not go with it? Make the bookstore a destination — not an errand but a day-trip. Capitalize on what people are already doing, increase our site traffic, make a major impression on public consciousness — and then innovate to make the most of each customer, and each customer visit.

Sure, we currently run a café (can’t sell books without coffee these days) but the cafe shouldn’t be just a sideline — or more accurately, it won’t be the only sideline. Our coffee shop would stand to one side of the main seating area, now a spacious lobby: a nirvana of tables with outlets built into each column, a brace of comfy chairs on the inside wall, a row of patio tables just inside (and perhaps also just outside) the sunny windows, with a semi-detached space that just might be configured for an impromptu class or book group — and a separate 2nd floor lounge that would be even better for both. Set up the social space first, and put it in the center of your retail empire.

Immediately adjacent to the central seating [I could call it a ‘food court’ — ‘cause that’s what it is — but I hope the customers don’t dismiss it as such] in addition to the de rigueur coffee shop, we’d have a quick lunch counter, or maybe 2-3 concessionaires: Subway? Bagels? Ice cream? Starbucks or Dunkin’, even, instead of in-house coffee? (If I win the lottery, I’m setting aside a couple million to entice Tim Horton.) I’m proposing a monstrous bookstore with daily traffic that is going to exceed all-but-December-retail numbers, and our December is going to be absolutely nuts. As a landlord, I could make a nice chunk on rent.

Just off the central seating area, we’d have a full service restaurant & a first rate pub. These also directly support our ‘social space’ nexus: come in for a quick nosh and check your email while you wait for friends to get off of work, and then transition to the bar or to a table for dinner. Once again, we could run these ourselves or rent out the space; either works, and depends on how you want to collect your profits: guaranteed rent, or less reliable profits-from-food-service operations.

— I’ll understand if you’re not really comfortable with either. It’s a rare bookseller who has experience in facilities management AND hospitality & bar operations. Why, I think there may only be one person with this particular skill set. [*smirk*]

Keeping with the ‘mall food court’ model: once we’re past scone-throwing-distance from the coffee shop and our central seating area, well, that’s where the rest of our retail operation goes.

In this case, the rest of the retail operation is a big effing bookstore.

Now, let’s just assume for a moment that the commercial real estate market is so depressed that not only are a number of shopping malls all-but-closed, they’re even available for purchase — with no current tenants, falling into disrepair as we speak, and ripe for radical remodeling.

[I know: so unlikely, if it weren’t actually true. Once in a lifetime opportunity here]

We could buy a small regional mall — special bonus: the older and smaller malls are all closer to city centers, not further out in the suburbs — close down half of it to use as our warehouse/book distributor space, and reallocate the rest, building out from the food court, to sell books.

The wonderful thing (from the booksellers’ point of view) is that we could set up a window where 50% of our customers could just walk up and ask for, oh I don’t know, Organic Ostrich Farming, and then we go back into the stacks, find it, and hand it to them. We’ll set up this special order window with its own [small] seating space and register

…

Past this order window, we’d have the sales floor. Yes, I’m advocating that we separate “the stacks” from “the sales floor” — as 50% of our paying customers and 98% of the rest are either browsing bestsellers, browsing a specific genre [& we can accommodate that], or just hanging out for the free wifi and reading magazines. There is no need to make every shelf in every category available to the public. If the customers who already know the title and will buy it (if we have it in stock) can just walk up to the register closest to the main entrance and do so — that is a win-win-win. This call-ahead and pick-up may in fact be more than 50% of our business. We can stock as many titles as we can get our hands on, put them ‘in the back’ where they are immediately ready for sale, even if they aren’t necessarily ‘on the shelf’. We can take that part of the business and really streamline it.

What about the folks who don’t or won’t buy books? Well, we’ve already set aside quite a bit of dedicated space for social butterflies & campers — and this space will pay for itself with food service, I think.

And what about the grazers & browsers — who love to linger over tables & displays, and want to see what’s new – the readers, the book lovers — The other half of my book-buying customer base?

That’s the whole point of the bookstore. And now we look at how to really run a bookstore:

If I were in fact repurposing a shopping mall, then one “storefront” would be a newsstand with newspapers & magazines. Another might be a newsstand with comics. One storefront could easily be turned over to just the New York Times bestsellers & other mass market paperbacks — the direct equivalent of an airport bookstore. These could easily be the closest “stores” to our central-seating-area-slash-lobby-slash-food-court and there’s little thought or bookselling expertise required here, past keeping shelves full. We’re just meeting demand.

Just past the obvious though: If I can hire someone who loves romance novels, why not give her 3000sq.ft. and full reign to order in titles, stock shelves, merchandise tables, and above all sell books. We can keep the overstock in our warehouse [adjacent, on site] and face out a full “bookstore’s” worth of genre titles.

And do the same for mystery

And the same for sci-fi

And the same for history

And the same for biography [say, does A&E want to do a co-branded bookstore, with DVDs?]

And the same for design, or architecture, or gardening(from May-Sept), or cookbooks, or travel, or all of the above and more…

And most specifically, for kids: in the less-and-less-hypothetical case where I was taking over a shopping mall, put the kids shop [picture books, beginning reader, plush, games, et al.] in the last remaining ‘anchor’ location and put both Young Reader [10-12] and Teen Lit [12-16] in the two locations just outside – close enough that kids can wander away from parents but far enough so neither set has to shop the ‘kids’ dept. [*ack*, gag me]

[And even if it’s also in the teen section, there’s a chunk of ‘YA’ & ‘Teen’ lit that needs to be mixed in with the adult stuff – easy to hand, no judgements, cash at the register, thank you]

While I’ve used the shopping mall as my touchstone [as that is what I, as a child of the 80s, am familiar with] [and damn but the commercial real estate market is depressed: I’ve run numbers. I think I could actually buy a mall] this Concept would work even better with repurposed industrial or office space. I can only imagine what DC’s Old Post Office or an art space like Le Lieu Unique (in Nantes, France) would look like if they were turned over to books.

##

The future of retail depends on managing inventory, especially in the face of internet competition. Still, it is easy to open a huge bookstore that doubles as a distribution center; in fact, with a little advance planning you could open up a very small chain that covers hundreds of millions. […which I’ve already posted]

There are are at least two ways to flatten verticals in retail: Amazon figured out one – sell direct from a warehouse & ship it. You cut out two layers—distributors & retailers—and make it possible to sell direct to customers from a massive inventory.

IKEA has figured out a second path: sell direct from your warehouse to visiting customers. This also cuts out two layers — a distributor/warehouse (as the store is your warehouse) and shipping via post or parcel service. Amazon’s model is not the only way to lower costs. From point of manufacture to customer fulfillment: physical retail space is not the only or even obvious thing to cut.

At IKEA, customers go home today with fine, flatpacked Scandinavian designed furniture & housewares. IKEA does so well with this model that their web site, actually (and intentionally) kind of sucks – and more often than not sends you into the store to buy.

Let me go back to the “massive inventory available direct to customers” part – Chris Anderson called this The Long Tail and characterizes it as an internet phenomenon. However, the long tail is a change not in available books but in customer demand – this new demand is enabled by internet search but not restricted to internet retail. If I, as a retailer, can meet that demand today, then there is no need for a customer to order from the internet. So we need a bigger storefront. Or even a warehouse. This is a logistics problem, and one I can solve.

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B&N spent $450-500 Million trying to launch and leverage the Nook. (maybe more; I haven’t followed this end of their business for a while)

I’d estimate a “Truly Massive Landmark Book Destination” would cost a tenth of that — or even less, considering B&N already owns the book inventory and has been closing stores at a pretty fair clip. Shifting a few books around the chain has got to be cheaper than buying new.

I’d call what is currently happening at B&N a failure of imagination, more than anything else. And complacency. Some hubris in there as well.

“Yesterday we had our best sales day in the history of 86 years at the store. So thankful for all of you.”
Strand Book Store record Christmas shopping holiday sales say print not dead : Michael Walsh, 25 December 2013, New York Daily News

“But again, this is a bad comparison. Royalties to authors aren’t the same as profits to publishers. We are the publisher when we self-publish. So start comparing our 70% take to a publishers’ 60% take when they deliver a book to a bookstore — keeping in mind that we don’t have a physical location to lease, shipping costs, or employee wages — and you’ll see that this is a very fair, sustainable, and permanent rate. If anything, there’s room for it to be more generous.
“Just like the sky, this rate isn’t coming down. And I’m not afraid to put a public declaration on this. Because hey, the chicken littles and the Jeremiads are wrong every single time. Yes, even tomorrow. Especially tomorrow.” [emphasis in original]
The Sky is Falling! The Sky is Falling! : Hugh C. Howey, 20 December 2013, hughhowey.com

Mr. Howey was responding to this Kindleboards post: A thought on how it could get much tougher, which I saw first via The Passive Voice

— Hugh Howey deserves credit, kudos, and all due respect for what he has been able to accomplish as an author and businessperson (in that he makes money; that’s how business-types keep score) but I can’t say I see any improvement in a market where there were once 50 different players, and now there is functionally only one.

Hugh casts his relationship to Amazon in one light: He, acting as his own publisher, provides the books to Amazon’s bookstore — selling to Amazon wholesale for 30% of the retail price. When put this way, Amazon appears to be Howey’s customer (and we maintain the illusion that Amazon is a “bookseller” and “bookstore”).

If allowed, I’d like to re-phrase Hugh’s main point: Actually, Amazon is allowing Hugh to use their app store to sell downloads, for which they take a 30% commission on sales. Amazon doesn’t need to collect more than 30% because they aren’t really doing anything except listing the book and facilitating downloads (just like Apple does with their App store, for example – and Apple also charges software developers 30%).

Hugh is right: the sky isn’t falling, Amazon is likely just fine paying authors 70% and hell, over time, they might even be willing to pay more. But Amazon is not the customer in the current KDP program: The Authors are. Authors give up that 30% to use the Amazon website to facilitate their own sales. Amazon makes commissions off the sales, but isn’t ‘publishing’ them, and certainly isn’t buying the virtual books to put on virtual shelves. It’s a listing; Amazon isn’t a bookstore, just like the old Books In Print wasn’t a bookstore.

Amazon and the Kindle ecosystem they’ve built are great tools for authors, but the things that make them great are also the things that make Amazon so very different from the old publisher-bookstore pipeline. To gloss over the differences with bold declarations that We are the publisher is, dare I say it, attempting to blind people to the real truth by shouting.

As “author” or “publisher”, where else do you go that isn’t Amazon? I don’t care how good the rates are, he kind of skims over the fact that Amazon set the rate for him: Hugh did not negotiate it. The Sky isn’t falling. There is no sky, when we all have to live under Amazon’s dome.

##

I’d like to point out that Hugh Howey is a New York Times Bestselling author, and is making lots of money, and also managed both feats starting out as a self-published author on Kindle so maybe he knows something I don’t about how this all works. And now that he’s famous with an established fanbase, he could easily go it alone and sell direct to readers outside of Amazon, so maybe his perspective from his current position is correct. But for the rest of us? I don’t know.

I do think that self-publishing in 2014 is different than it was in 2011. If nothing else, the field is more crowded — plus Amazon continually tweaks their listings to make it harder to ‘game’ their system, so breaking out of the ebook pack like Hugh did is much tougher. This idea that Kindle authors are ‘publishers’ and not clients using Amazon services isn’t going to help anyone navigate that system.

[blockquote]
“The business of selling books is run by a communal ‘brain,’ managed by three personality types; those who lead the market, those who organize operations and those who task themselves (like me) with imagining its future. The balance of these types in this brain, this bookselling brain if you will, and the relationship between the parts, determines the behaviour and direction of the industry as a whole.

“Using the evolutionary triune brain theory developed by the American physician Paul MacLean, I’m going to apply neuroscience to this bookselling brain. I will argue, very briefly, and with the diplomatic immunity of an enthusiastic amateur in a land of neurological experts, that the bookselling brain is of a very similar design to every other brain, including your own.

“Understanding how this brain functions, I believe, will make us more mindful of its mechanics, better equipping us to adapt, survive and even flourish in this period of unprecedented opportunity and change.” [/blockquote]

The bookselling brain : Richard Kilgarriff, 26 November 2013, Futurebook.net

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I leave, as an exercise for the student, the determination as to whether the “Bookselling Brain” has Alzheimer’s, is suffering from oxygen deprivation, or is the victim of blunt trauma.

“You see, if I believed that humans shopped for no other reason than to acquire goods, I might be more aligned with Andreessen’s view but in fact, we don’t shop just to get stuff – any more than we go to restaurants purely for nutrition. In fact, we often shop to fulfill other deeper needs as well – the need to disconnect, to socialize and to commune – and at times to simply be out in public. Why else would celebrities brave the hoards of paparazzi to shop for things they could undoubtedly have delivered to them on a silver platter? The physical, human experience of shopping is in some ways of far greater value than the goods that come along for the ride.”

The Future of The Retail Store : Doug Stephens, 24 July 2013

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In the face of (what everyone tells me is) overwhelming competition from Amazon, or the internet generally, there’s no point in physical bookstores anymore.

The Bookstore has become a huge target, and one uniquely vulnerable, because everyone knows the bookstores are doomed — everyone agrees that either ebook downloads or internet retail (or the combination of the two) is qualitatively and quantitatively better than physically stocking books on shelves for eventual sale. Customer engagement, available titles, delivery logistics, price: on all these metrics the physical book — and that quaint anachronism, the ‘bookseller’ — have both been measured and found wanting.

In the new digital age, the dead-tree book is… superfluous? wasteful? The 21st century analogue of the 20th century buggy whip?

I don’t agree.

A lot of the discussion-slash-debate is about content and containers. Is a book the dead-tree object, or the words themselves? — or perhaps the ‘book’ is an aggregation of the ideas that are expressed by the words within. If the book is a collection of words in whatever format — whether that means a digital file stored on my hard drive, or my personal memory of a book stored in my head (and so: after I’ve read something, does that mean I’ve ‘pirated’ a copy of the book, a ‘good enough’ copy such that I don’t need to buy a physical OR digital version of the book?) — At this point, hell, what does it mean to “sell” a “book”. I’m confused.

Most Books (at least in 2013) are physical objects that exist in physical space. (Yes, most books are physical objects because no matter how much one loves digital or how easy it is to write vampire fiction, or to make digital copies of vampire fiction: that’s 5 years of digitization and sales history stacked against five centuries of mechanical printing backed by five millennia of publishing history.) Plus, for every e-cheerleader advocating digital, there is a ten year old clutching his physical copy of Diary of a Wimpy Kid. (Not a senior citizen who hates computers and doesn’t cotton to your “new-fangled e-reeder” – a kid with a book. And in the United States, four million kids turn ten every year.) I feel there is plenty of life left in dead-tree-books.

Bookstores are physical spaces that, while originally designed to sell the damn books, have since been hijacked into being ersatz libraries and the default gathering space. I used to call this the “burden” of bookselling, especially of the corporate big-box-chain: we get used and abused by our customers daily. Folks camping out all day, reading magazines or browsing the $80 art books, buying nothing except maybe a coffee, generally making life difficult for other customers, and treating the place like home.

Social Nexus. Local Landmark. Meeting Point. Civic Centre. Third Place.

(Amusement Park?)

Here, watch this lovely time-capsule of a video from 1980:

William H. Whyte: The Social Life of Small Urban Spaces – The Street Corner from MASNYC [The Municipal Art Society of New York] on Vimeo.

The video is not a parody, it’s the real deal. It’s also an hour long — If you don’t have time to watch the whole thing, skip ahead to 38:40 for some hints on why bookstores sell coffee, or to 50:00 to see SandwichBoardVader, followed by the book stalls of Central Park — and the final 8 minutes of the vid (as Whyte wraps up his points) will give you a few conclusions, as well as the flavour of the whole.

edit 27 February 2014: Since Vimeo, at the request of whomever still owned the copyrights, saw fit to remove Whyte’s excellent educational short — irksome, but that’s the law — let me instead substitute a pair of YouTube videos on the same topic:

George C. Stoney’s How to Live in a City, “architectural critic Eugene Ruskin guides us through unique locales which illustrate the fine line between organic and sterile urban spaces. It all depends on a place’s ability to attract and sustain, even if only momentarily, a sense of community.”

George Morris, The Social Life of Small Urban Spaces, Market Square

[/edit]

The Social Life of Small Urban Spaces was also (or perhaps I should say, was primarily) a book in 1980, ISBN 9780970632418, available used these days; though now also available in a new edition from PPS, The Project for Public Spaces.

The reason I linked to and embedded the Whole Damn Video is that while this 1980 flashback isn’t just the first-ever study on how people use social space: it is also exactly how people treat bookstores today. Not enough seats? Any windowsill or stack of books will do. Chairs? Mere props, to be moved at will and to satisfy whims. Quiet, secluded corners? Hell, the bookstore is full of them and our guests and customers will freely move both tables and chairs to whichever corner best suits them — or camp out there on the floor.

You need a place to meet your friends before the movie; you need a neutral, safe location for the first/blind date; you need an easily-described, easily-found landmark as the venue for job interviews; you’re a tutor but for multiple reasons you can’t meet your students in your own home; you’re a student, it’s the end of the semester, and you know all the lounges, meeting rooms, hell even the hallways on campus are going to be packed: where do you and your classmates go to finish the next group project?

If your local bookstore is still open, and selling coffee besides: Duh, the bookstore is exactly the social space you need. The Library closes too early, restaurants and bars expect you to order, and pay for something, and oddly the outdoor parks and other public spaces are unfit for this use.

The only “public” space available is actually a corporate, private space that is also attempting to engage in retail. (Wouldn’t Ikea be better? They have more tables and chairs…)

Why is this a unique burden of bookstores? To maintain a social lounge even to the detriment of our primary business? For whatever reason, it seems that only the bookstore will do. For many, many customer expectations and interactions, the ‘bookstore’ has nothing to do with books.

##

Last essay, I quoted an Inc. Magazine piece [Paul J. H. Schoemaker, 21 Nov 2012] on re-thinking your products. Let me quote it again:

“For example, consider the widely used product life-cycle concept in marketing. This biological metaphor suggests that products naturally arise, grow, mature and die, just as individuals do. So if managers wedded to this view see a product’s sales decline for several quarters in a row, they would naturally think that the product is in decline. And once the product strategy is adjusted to reflect this presumed stage of decline, resources may be withdrawn and decline will quickly follow (as a self-fulfilling hypothesis)…

“Procter and Gamble as well as many other companies, however, reject the product life-cycle metaphor as unduly self-limiting. Rather than viewing the product as a single organism proceeding through its life stages, they view the product as the species itself. So, the product must be adapted to changing circumstances to remain viable.”

— And so, the first big question for booksellers, even before we get around to what needs to change: What the hell is our product?

Is our main product what we think it is?

“Bookselling” isn’t the sale of books. “Bookselling” is the agreed-upon social construct: In exchange for retail sales (and coffee/cafe sales) sufficient to support the whole, the Bookstore agreed to be an open reading room, meeting place, learning resource, occasional event space, and yes: the only retailer where you can sit down in the middle of the floor, take off your shoes, and hang out. That was the deal. Booksellers didn’t change the deal: our customers did. You did.

It is not that “bookselling” was no longer sustainable, but rather that readers wanted all of the services, advantages, and atmosphere traditionally enjoyed at a bookstore, but not enough folks were willing to pay their freight. And when the deal collapsed, once again this was spun as a failure of bookstores:

In 2007, technological change was compounded by the the worst recesssion in 80 years. Borders, already weakened, collapsed so fast many were willing to write off the whole industry. Every tech blogger and business writer ignored both the services bookstores were already providing to communities [urban, suburban, exurban] and discounted entirely the crap we booksellers were willing to put up with from our “customers”, and boiled it down to price: if it’s cheaper online obviously it’s better online and so, bookstores suck. Many were (and are) already writing us off as fossils — as they sit in our cafe, drinking our coffee while flipping through magazines they weren’t going to buy. Some don’t even pretend to shop — they just park it in a chair with a laptop, hogging a whole table, and use our free wifi to go online to denigrate bookstores generally on whichever platform: “It’s way too crowded, I had to wait 10 minutes for a seat to free up, and there aren’t nearly enough power outlets. I don’t know how this bookstore plans to stay in business.”

That said:

If bookstores are getting more than their fair share (hell, their share plus Everyone Else’s share) of freeloading in-store foot traffic, the obvious follow-up question is:

How do we monetize that traffic? (that sounds familiar for some reason…)

[image source, flickr, Robert Scoble, tagged ‘Shenzhen China book store’]

Here’s one take:
(spoiler: I strongly disagree)

“What would I do if I were running B&N today? Good question. I probably would take a close look at what Indigo, the B&N of Canada, is trying to do. It is attempting to become a lifestyle shopping destination in categories in which books play a consequential part but extending far past books. Categories like house and home, cooking, kids, babies, paper and self-help are tied to big book categories. Indigo can have a legitimate hope of creating a shopping experience across the category that integrates books-and-beyond in a compelling enough way to get enough traction with customers to fill up the store.”
Should Barnes & Noble Turn into a Mini-Mall? : Roger Martin, guest post on the Harvard Business Review blog network [blogs.hbr.org], 15 July 2013

If we can’t sell the books, how do we sell that other crap?

The primary “product” the bookstore is selling is atmosphere. A place to be, and to meet. To spend time with family and friends on a Saturday afternoon.

What product lines, what categories do you add to that? Jigsaw puzzles, stuffed animals, stationary? Really?

How about a couple of nice, sit-down restaurants, a decent pub, and a movie theater instead. We can get people into the bookstores — and then after an hour or four they go home, maybe with a book. It seems to me that selling books is a decent start (and an undeniable draw) but the customer experience and the shopping trip itself is our actual product. How about we offer our customers a decent lunch to go with that, or dinner-and-a-movie, or the book group that meets in the bookshop pub every Tuesday?

Bookstores are a destination. Bookstores are entertainment. [Why in the hell am I open until 11pm on a Friday for folks to hang out in else? Corporate has figured out only the very smallest part of this…] Don’t dilute the book store experience by turning it into Target (or worse, Walmart): The way out is not to add more retail lines, but to embrace the social and pleasurable aspects of hanging out in bookstores. Build the Bookstore version of an amusement park.

You know what everyone misses these days? Record Stores. An actual, sizable record store that had inventory, not just a couple of aisles, or a rack or bin of discount CDs by the register. “I used to be able to spend hours in a record store” – you don’t become a “lifestyle shopping destination” with more retail crap, what you should be selling is the browsing experience.

Call this the “critical mass of inventory” — and right now, no one is stocking CDs anywhere near critical mass. Yes, I know: it means a couple of million spent in sunk inventory costs. Write that check. Think of your whole sales floor as a factory: Spend 3 or 5 or 10 million dollars in “sales equipment” and watch as that machinery sucks in customers and churns out sales.

This idea of the sales-floor-as-factory is also why I strongly advocate for Even Bigger Bookstores. 25,000 square feet is not the ideal size for a bookstore, just the footprint that was widely available in the early 1990s. 25,000 square feet is either 4 times too big, or ten times too small. In order to reach a critical mass of books, large enough to compete with Amazon, we need more. Build out to 300,000 or even 500,000 square feet — too big, you say? Well, we’re going to need room for that movie theater, and the pub, and the fine dining, and enough tables and chairs for everyone (the comfy ones, like we used to have) and hell, maybe we can set aside 25,000 square feet for a decent record store.

Those CD sales are incidental, though. Like the massive stacks of books, they’re just The Draw. The idea is to get someone into the bookstore and have them stay all day.

The average cost of a roller coaster is $8 to $10 Million. […a single roller coaster; most parks have a half dozen marquee coasters and twice as many smaller rides.] The cost of inventory for one big box bookstore is just $2 Million — for the cost of a single roller coaster, I could buy 5 times the inventory, half a million individual books or more. Let’s splurge, let’s spend $20 Million on inventory, get things up to a Million Books Under One Roof. My advertising is practically writing itself at this point.

This isn’t about a lack of demand, or a lack of money either: An average-to-large size metropolitan area of about 3-4 Million already has 10 chain bookstores in it. Draw together these fragments into single, massive, Landmark locations. Each landmark is also a local order fulfillment center, either for internet orders or to pick up at (much smaller) satellite locations. Next day or even same day pick-up might be possible — the cost of a mini-van, a driver, and the insurance has got to be cheaper then 10 sets of duplicate inventory in duplicate big boxes.

What would *I* do if I were running B&N today? — I’d be closing stores, sure. The “right number” of stores might be 100 or so. The Big Box is not a natural fit for bookstores anyway, it was just the cheapest, easiest option at the time. Instead of leasing boxes and opening stores, a smart bookseller would be building their own malls. Instead of relying on vague efforts and projections and promises that complementary businesses will move into the shopping center or neighborhood, do it, become the developer. If being next to a movie theater is good for your bookstore — and they tell me it does make a big difference — then open and run the damn theater yourself.

In inflation adjusted dollars, Disney spent $144 Million to build the original Disneyland. For half that I could build an amazing bookstore, one that would be the envy of the world.

[blockquote]
“The great benefit of metaphors is that they simplify… The downside, however, is that a strong metaphor can create a false sense of understanding.

“Metaphors and analogies in general often distort our thinking in hidden ways, by drawing attention disproportionately to what fits and obscuring what doesn’t get highlighted in the analogy. As Einstein noted, ‘we should make things as simple as possible, but not simpler.’ The question is whether some of your favorite metaphors for thinking about complex subjects, such as the economy, leadership, joint ventures, team work, or competition actually offer you flawed or simplistic analogies.

“For example, consider the widely used product life-cycle concept in marketing. This biological metaphor suggests that products naturally arise, grow, mature and die, just as individuals do. So if managers wedded to this view see a product’s sales decline for several quarters in a row, they would naturally think that the product is in decline. And once the product strategy is adjusted to reflect this presumed stage of decline, resources may be withdrawn and decline will quickly follow (as a self-fulfilling hypothesis)…

“Procter and Gamble as well as many other companies, however, reject the product life-cycle metaphor as unduly self-limiting. Rather than viewing the product as a single organism proceeding through its life stages, they view the product as the species itself. So, the product must be adapted to changing circumstances to remain viable.”
[/blockquote]

How Metaphors & Analogies Influence Your Thinking : Paul J. H. Schoemaker, Inc. Magazine [www.inc.com], 21 November 2012

Key point: The Product must be adapted to changing circumstances to remain viable.

##

I’m a bookseller, and I’ve been writing about bookstores and bookselling for more than 5 years now — so you know this is going to circle back around to that topic eventually. But first, the long diversion…

##

The story, almost surely apocryphal (or at the very least, embellished and embroidered over the years) is that the original idea for Disneyland came to Walt on a park bench:

“As Walt Disney sat at a bench, at an amusement park, watching his daughters play, he noticed how ragged and filthy the small amusement park was. He also observed people’s reactions to different rides, and noticed how children’s parents had nothing to do. They would be anxious to go home, while their children were still having fun, and playing.

“This is where Walt was conjuring, and planning a new type of amusement park; one that would be clean, and would have attractions for parents and children together. This was Walt Disney’s idea, which eventually turned to be Disneyland.”

Walt Disney’s Disneyland : undated, unattributed article at JustDisney.com

“Disneyland was Walt’s dream. For years he dreamed and hoped of building a ‘little family park’ where parents could take their children for a day of fun — for both kids and adults. The amusement parks of the 1920’s and 30’s were tawdry, dirty, sleazy places. The short-lived turn-of-the-century family ambiance of Coney Island had turned into a hard-boiled rough and tumble atmosphere. Other parks across the country were no better. By the early 1950’s, Cedarpoint, in Ohio, had begun to pass it’s apex and began a steady decline as did Pittsburgh, Pennsylvania’s Kennywood Park (both of which have experienced tremendous improvements in the 1980’s and ’90’s). Still, Walt felt that it was possible to build a different kind of park…a ‘themed’ park that had fun attractions and a beautiful atmosphere.”

A Brief History of the Disney Parks : undated article by Brian Bennett at MousePlanet.com

“Roy took the detailed drawing with him to ABC and managed to turn the tide. ABC agreed to loan Disney $500,000 and guarantee $4.5 million in loans in return for a one-third ownership in Disneyland and a promise of a weekly Disney television show for the network.

…

“After one full year of rigorous construction demands and a total investment of $17 million, the gates of Disneyland would be opened for its first guests on Sunday, July 17, 1955.”

The Construction of Disneyland : undated, unattributed article at DesigningDisney.com

[The video embedded above is just the first ten minutes, the full broadcast is a little over an hour.]

That $17M in 1954, adjusted for inflation, would be about $144 Million today. Cheap at the price?

For those with an interest, here are a few more links (in addition to the sites cited above) for your perusal:

http://www.justdisney.com/disneyland/history.html
http://micechat.com/224-walt-disney-disneyland/
http://en.wikipedia.org/wiki/Disneyland

10 years later, Walt would open Disney World

##

The Amusement Park was decades old, and a relic of a time before the advances in electronics flooded the market (and the airwaves, and our brains) with entertainment options — some of which (even in the 1930s) didn’t even require one to leave the home. In the 1950s, radio sets were being rapidly supplanted by the new medium of television — and yet, not only did Disney not abandon his idea, he leveraged his existing product, and tapped the new television industry to help fund his dream.

With The Wonderful World of Disney appearing weekly on TV sets, and with an already successful movie studio, Walt didn’t need an amusement park.

Or did he?

C’mon — Mickey Mouse kind of sucks, compared to wisecracking Bugs Bunny. (And both Mickey and Bugs are playing second fiddle these days to a certain Italian/Japanese plumber.) The enduring popularity of Mickey Mouse has quite a bit to do with the magic of the Magic Kingdom. The “theme park” — which was Disney’s innovation — is a step above just a simple amusement park, or the meagre offerings of the state and county fairs. Disney is a destination, and folks plan and save for years to make a trip. Even if the parks didn’t make any money (which they do) I might argue that if Disney hadn’t opened Disneyland in 1955, the company that bears his name would have been little more than a film library being passed around in mergers and sales, like MGM’s in the 1980s and 90s. Instead, Disney became of the major media players, one of only eight or nine globally.

[someone needs to update the Merchants of Cool chart, but it’s still a great resource to link to]

##

People tell me books are dead. Or at least, that bookstores are dead, or dying, or obsolete, or at a very minimum: that bookstores are threatened on multiple fronts and there is no way that the Bookstore is going to survive the onslaught.

There are too many other entertainment options — DVDs, video games, and the internet included — so there is no reason to buy a book, and if one must have books, well, it’s easier (and cheaper) to order them online, or to download a digital version.

And that is fine. It even seems inevitable.

I’d also call it a failure of imagination.

The bookstore is the only retailer that people go to for fun, or to ‘kill time’ — and certainly the only retail store parents regularly bring their kids to. A bookstore is not a seller of staple goods (like groceries or gasoline) but neither is it a luxury, specialty shop: some books can be plenty expensive, but for less than $20 you can pick up a novel that will take you hours to finish. Sometimes you can get one for less than $10. Unlike Target or Walmart, customers can waste hours in our bookstores — in fact, instead of casting about desperately for enough foot traffic, the main problem we have as booksellers is that the stores are too full. Most afternoons every seat is taken, the customers are even lounging on the floor, and booksellers spend most of their day reshelving books and just cleaning up after all these folks.

We need to figure out how to monetize this traffic, but getting people to ‘like’ the bookstore is not the problem here.

In the 1930s, Walt Disney looked around at one of the entertainment options of his day and saw a lack. A need. A special opportunity. Others no doubt looked at the same park and came to the conclusion that the amusement park was a dead-end niche, barely popular, and soon to be a historic footnote. Even armed with the idea, though, it took Walt some time to rustle up the money, and to find the requisite space. Disneyland was not an upgrade to an existing park — Walt had the whole thing custom built, and even then it was too small. When it came time for the East Coast version, he bought 30,000 acres. Walt’s park, his dream, was HUGE and while some of the component pieces are the same as other parks, it became something altogether new.

Now go back and re-read my post about buying a shopping mall and converting the entire thing into a bookstore.

From first idea to opening day, Walt Disney took twenty years to finally open up the park he always knew would be a success. He did some other things before, and of course, kept doing those other things after, but the park immediately became the centerpiece of his corporate empire. Look at the Disney logo: the park, not Mickey Mouse, is the public face of the company.

I’m not Walt Disney; I’m just a bookseller. But I can see the opportunity here and I know that there will be a bookstore in the future — A great big bookstore, bigger than anyone has ever seen, and doing some things no one else ever thought a bookstore would do.

I just hope it doesn’t take me 20 years to get there.

I’d previously linked to the 1912 Sears Roebuck & Company General Catalog — currently available for viewing and download from Archive.org — 1200 or so pages of pure retro consumerism.

It’s a beautiful artifact. They should make it assigned reading for some university-level U.S. History courses — and if they don’t have an applicable course yet I could probably have a syllabus whipped up by next Tuesday.

Before, I only linked to the catalog to make a casual comparison between Amazon.com and mail order. Now, I’d like you to actually look into the thing.

I found it easiest to download the PDF, though the book is available to be viewed in browser as well. Whatever method you employ — go right now to page 942:

Let’s look at what you could get from SR&Co in the way of books way back when.

“The Best, Newest, and Most Popular Books at Ridiculously Low Prices.” — The sales pitch is the same, anyway.

Just 45¢! Why, that’s 70% off the cover price! How can they afford to do that? They’re going to put me out of business.

I want every last book on both these pages:

I wonder if I fill out the form and send it, will Sears ship me the advertised Book & Stationary Catalog?

“As you all know, the suject of service is a serious one in department stores. You know that department stores are not munificent in their salaries, so we can’t expect to have all expert saleswomen in the stores. But I have found that when my young ladies assemble in the morning if I draw their attention to the Publishers’ Weekly and papers of that kind, they are pretty well posted as to what is on the market. And certainly without a general book information they could not get on so conspicuously well.

“In moving our bookshop to the third floor we decided to remove all the ugly characteristics of bookshops and see if we could have a good-looking bookshop instead of planning one of those shops where we see great dreary piles of books going to the ceiling or books on the same subjects in different places.

“We took our books on the same subject and had little posters made. I think that is the most important feature of the table display. We make a great deal of having our posters plainly printed, and they are the center of attraction, and from each poster you can see exactly what the table contains.

…

“The room is equipped with seats with narrow cushions, and customers come in there and sit and read or look books over. No one disturbs the customer, and he has a feeling of freedom. If we cannot find the book he or she wants we get it for him, or we look it up in the catalog for him. And I want to say right at this point, that I think no one appreciates the freedom of being let alone any more than the customer of a bookshop.

…

“We have seemed to meet some success in this plan of treatment of our customers. The room is equipped to be comfortable. You should never try to sell your customer unless he is comfortable. Our experience is that if we find out what the customer is looking for, and he asks for a book on a given subject, don’t just show him that one book, but show him ten on the same subject if you can, and instead of buying one book he will buy three or four if he can look them over by himself in a comfortable manner.

“There are tables between the wall spaces of shelving, and the customer my sit near the subject he wants to investigate. The shelves are so arranged and labeled that we make a great savings in time and so does the customer, and that is the great davantage of the use of the posters if you use them on your shelves too.

“People come in and sit and discuss the book, always being very comfortable, and we have our people watching and ready to make a sale just as soon as that customer indicates that he has looked the book through as much as desired.

…

“Just one other feature of the bookshop I must tell you of before I close, our Junior Department. We have, just a few feet south of the entrance to our shop, a very beautiful Junior Department. In there there is a big couch and small chairs and the children come in there and take down any book they want and read it. My only requirement is, ‘Hats Off’ and ‘Hands Clean.’ And they come back day after day.”

— the testimonial of Mrs. I. J. Watson, bookseller, from the 1 June 1920 issue of The Bookseller, Newsdealer, and Stationer. This is the description of a department store bookshop (the corporate big box of its day) — not some quaint indy.

original source embedded below:

“Alas, alas! Twenty-one years have passed (all too quickly). During all these years I have struggled first to attain to earlier ambitions, later to keep a semblance of a bookstore.

…

“Oh, no. Now and then callers drop in to see about discounts, or if we can furnish such and such books as cheap as Cut-em-up & Divide-em, or to let me know they always order direct from the publisher, or Wanamaker or Alden, or from ‘clearance-sale,’ or from the ‘Library Association,’ or Macy’s or the ‘cheapest book-store on earth’

…

“In vain do I call attention to a well-selected stock, good editions, fine bindings, etc. In vain do I call in play all the resources of a tongue made eloquent by the necessity of making sales to meet coming bills. To all these blandishments — including the piece de resistance of 20 to 25 per cent — he ventures the unanswerable argument of a clearance catalog in his pocket, or the catalogue of the ‘Home Library Association,’ or quotations from the ‘cheapest.’

…

“Mr. Editor, you have championed the book-seller, pleaded his cause, deplored his decline, offered sage words of advice, counselled patience and prudence, advised enterprise and wide-awakeness, and altogether in a general way said as comfortable things as could be said under the circumstances. But, if you will permit me, I will say frankly that if you regard the booksellers as a part of your constituency valuable enough to be saved, if indeed their destruction would imperil you own existence, then you must make your paper more a ‘booksellers’ than a Publishers’ Weekly, and take hold of the vital questions that are sapping the foundations of the trade, and hammer away on them until publishers recognise that the inevitable result of the present policy is the certain ruin of bookselling in its legitimate and best sense. The decadence of publishing follows quickly that of bookselling.

“No bazaar man, or agent, or association, or any other method can take the place of the bookseller proper who studies his business as a profession and makes books his chief thought. It is useless for publishers to claim a want of enterprise booksellers and hash up complaints of his inability to give customers information, or lack of enterprise in ‘stocking up.’ Pray, Mr. Publisher, whose fault is it? I believe booksellers (what there is left of them) do not lack in energy, ability, or will. What they do lack is encouragement from you — you who give freely with one hand and take away with the other — you, sir, must foster, aid, encourage, and protect, in all possible ways, the agents upon whom you most rely to distribute your products — the bookseller if he is that agent. It not, than the other.

“I believe the remedy for the greater evils of the trade is in the hands of the publishers. The publisher can, if he will, control his own productions. It is easy to trace his stock from the moment it leaves his hands, and if he really desires it can be kept out of the hands of the slaughterers.

“But at last the whole question hinges on a single proposition : Is the bookseller any longer desirable : is he any longer indispensable in the estimation of publishers? If not, then all arguments are useless and all pleading vain. Booksellers can make up their minds to waste no time or money in useless endeavors to right an ever-increasing wrong.

…

“Summing up the whole matter, Mr. Editor, it seems to me that you, the publishers, and the trade must unite in an effort to bring about such reforms as will save what there is left and build up a new generation of booksellers. Can it be done? I have no doubt it can,”

…

“This is the only way to bring the matter on a practical basis. Neither limited discounts nor any special plan will ever accomplish the desired end.”

— A letter to the editor from one A. Setliff in the 7 January 1888 issue of Publishers’ Weekly. Emphasis in original. A Google Books version of the original document is embedded below:

From the same:

“in the course of the competition, the discount system developed until the nominal or advertised price of books did not correspond to the practical selling price. The result of this has been to decrease not only the number of book-stores in proportion to the community, but probably the actual number of book-stores throughout the country.”

I had previously cited different parts of this every same 1888 PW issue in a March 2011 blog post titled “The more things change…”

The Rambunctious Revival of Books

“Once upon a time book retailing was about as exciting as watching haircuts. Hardcover books were often sold in musty downtown stores by fussy bibliophiles, and many readers turned to paperback racks in the more informal atmosphere of supermarkets or drugstores. Today the bookstore business is in the midst of a rambunctious revival. Highly organized chains with fat financial backing are using aggressive, unsentimental sales and promotion techniques to push into all parts of the country. The chains are cutting into book-club sales and sweeping some small independent stores out of business or forcing them to rely more and more on discounting or specialization.”

Time Magazine, 30 October 1978.

The “highly organized chains” mentioned above were B. Dalton and Waldenbooks.

Other highlights: the casually dropped factoid that I used as the title of this post, that in 1978 fully one third of all hardcover books were sold in New York City, plus Barnes & Noble referred to as a local NY bookseller (not one of the chains cited) and the positively glowing description of a 5th Avenue B. Dalton Flagship store that “will carry 100,000 titles and have ten departments offering 125 categories of books.”

…just like the big box down by the mall in your dinky podunk hometown.

In the four years since I first quoted the Time article, sadly it’s been placed behind a time.com subscriber paywall. [Boo! you’re limiting academic research, Time!]

It’s interesting to note just how far bookselling has come in 35 years, or even in just the past 10. Amazon will be turning 20 years old in 2014 or 2015 (depending on how one cares to measure it) and the first commercial experiments in ebooks devices date all the way back to 1998.