Rocket Bomber - article - retail - commentary - Why the Big Box Bookstore?

An index of my previous columns can be found at http://www.rocketbomber.com/bookselling

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Why the Big Box Bookstore?

If you were an independent observer in 2006 and took a look at the state of bookselling, you would be forgiven if you thought Big Boxes like Borders and Barnes & Noble were the pinnacle, the ultimate evolved form, of bookstores. They were everywhere — actively courted by landlords eager to increase traffic to their newly built ‘lifestyle’ centers (basically, open-air suburban malls) and their success seemed to point out the superiority of ‘category killer’ big-box retail over the old Main Street shop, or even the century-old department stores.

For over a decade (1994-2006) the chains advanced until there seemed to be no township or exurb that didn’t have a bookstore outpost with at least a half acre of bookshelves, cafe tables, magazine racks, and comfy chairs. [.5 acres is about 20,000sq.ft. – the largest ‘flagship’ stores are three times that size.] For those of us who were in high school & college during this period — and, you know, *read* — it was like discovering the whole world. Nothing was unavailable, it seemed, and a store with 100,000 books had everything we needed.

Of course, during that same period, internet access was expanding and accelerating at an even faster pace and the capabilities (the possibilities) of the web quickly blew past and blew through many industries. Bookselling — that unique galapagos of retail — was particularly susceptible to the pressures of the web.

It’s not that the bookstore has been replaced — It’s just that a glorified mail-order catalog run by a predatory genius who was given $55 Million and 5 years of free passes to run losses into the billions of dollars to build up his company is actively attempting to supplant bookstores with its own brand. With a mix of luck and near-perfect timing, Amazon pulled it off

— but then again, so did Borders and Barnes & Noble. Big Box Bookselling was working until the biggest economic downturn in 80 years.

Amazon now stands, at the beginning of the 21st century, in the same spot occupied by Sears, Roebuck, & Co. at the beginning of the 20th.

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I’m not going to argue the relative merits of Amazon versus the “advantages” of the bookstore. [Not again, anyway.] Instead I’m going to ask a now-obvious question: Why the Big Box?

Is 25,000 or 35,000 or 60,000 sq.ft. the ideal size for a bookstore?

The major chains didn’t pick the size or the format — and there is a reason we call them boxes. These square monsters might as well be oversized mobile homes for all the architectural imagination that’s been put into them. More thought and more creativity is put into the car access and parking than to any detail of the actual box. Sure, some are brick, some grey, some adobe-colored (depending on the location & perhaps ‘theme’ of the shopping center) but otherwise: big, boring, box.

The bookstore chains moved into boxes because from the late-1980s on, this was practically the only new retail being built. Over-built, in fact, as the old regional shopping malls we’re soon ringed by a dozen or so big-boxes apiece, and the new “malls” built further out from city centers were nothing but strings of boxes from the start.

Concessions could be wrangled from landlords because of the oversupply and the customer traffic generated by a bookstore, so the chains had incentives to open in the suburbs rather than re-develop similarly sized spaces closer to downtown. Indeed, the bookstores didn’t think to own any of their retail footprints at all — of the 1400 retail and college bookstores currently operated by B&N, they own exactly one. The rest are leased. Borders leased all their locations; the inability of Borders to come to terms with its landlords was part of its unsustainable expense structure. The availability and subsidized cost meant the two major bookstore chains grew quickly. One might even call the 1990s a Bookstore Bubble — in Border’s case, a bubble that popped.

The Big Box is not a natural fit for bookstores anyway: If anything, given the mission of the Bookstore in the post-Amazon world, the Big Box is too *small* and there are way too many of them, each with quite a bit of duplicate inventory. 30,000 or so books are common to all Big Box bookstores, roughly a third of all titles stocked. [source pg. 9 B&N’s 10-K annual report filing with the SEC] — for Barnes & Noble, that’s 700 sets of duplicate inventory. Of the remaining two-thirds, how much is duplicated across half the chain? Or even across just 100 stores? I’d say 80% in the first case and more than 95% for the smaller subset, though that’s just my guess based on personal experience.

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. [“Everything else” being the long tail of 8-16 Million Books that are currently available, somehow. I can’t be more exact, sorry, as that 8 Million number includes used books, PDFs, ebooks, Google scans, out-of-print-but-still-in-stock-somewhere titles, and of course: the combined stock of approximately 3,000 bookstores coast to coast. Not just 8 million books; more than that — 8 million titles (multiple copies of each) and who knows how many more. The Library of Congress has 26 Million volumes but of course some of those are unique, & the vast majority out of print.]

The Big Box retail spaces were built without bookstores in mind, and bookstores only filled them because they were ubiquitous and relatively cheap. The retail chain model adopted by bookstores wasn’t necessarily the best thing for books or customers but it worked for a time: until the commercial real estate market changed, and customer expectations exploded past any physical retailer’s ability to cope, at least using the 1986 Big Box model.

New challenges call for new solutions; I have a few ideas. I’m back on a writing schedule now, so hopefully I’ll be able to share some of my ideas with you soon.

Further reading & references (most of these were also linked to in the column):

Wikipedia: Big-box store
Wikipedia: Power center (retail)
Sears & Roebuck 1912 Catalog at archive.org
The Article titled Amazon at internet-story.com
The Great Leaders Series: Jeff Bezos, Founder of Amazon.com : Inc. Magazine, Oct 2009
The Wisdom of Jeff Bezos, Part 1 at ventureblog.com

footnote:
The list of books I’d never carry grows daily. Some from the smallest regional publishers or vanity presses aren’t worth the effort; self-published books, Print-on-Demand books, or books only available through Amazon’s CreateSpace service are technically available but a pain in the ass; books only available direct from the author’s website, or only available as e-books, can’t be had in a bookstore for love or money.

[edit: An Espresso Book Machine would partially plug this gap now, and might be a bridge to the future of book retail given time.]

Some of you would be impressed by the reaction customers have when I tell them that great novel a friend recommended is only available as an e-book. They really wanted the paperback. It’s sad, actually, but reaffirms my faith in books and bookstores: people still buy books, and they’d buy even more if we can make this new system work for them.