Guest Column: Minding the Store
If the Internet has taught traditional media anything, it’s that valuable content should be protected or it will quickly lose its worth. Letting music, news articles or whatever fall into the hands of those who do not value it has been toppling old media companies left and right, and is likely to continue. Take newspapers: Had their stories not been copied, pasted, snarked upon and uprooted far from their original sources (and the advertisers), there wouldn’t be nearly as many journalists in the unemployment line today. Even as we come to understand the protect-your-content lesson when it comes to the digital world, we are slow to apply its relevance to the brick-and-mortar one. After all, no matter how much we want to believe otherwise, most consumers buy books—yes, print books—at physical, non-Internet store locations, according to multiple research sources. That isn’t changing anytime soon, no matter how many electronic reading devices are thrown at consumers.
What is changing is where books are being bought, which matters a lot more than publishers seem willing to admit.
Just prior to the publication of “Harry Potter and the Deathly Hallows,” Simba Information surveyed bookstores across the country to find out what they were expecting from the book and how they felt about the series. The stores that were planning a midnight book-release party (more than 80 percent of respondents) were excited about their plans: One even persuaded an ice cream shop in the same strip mall to stay open past midnight, too.
But when it came to how they felt about the series ending or whether J.K. Rowling should add an eighth title, the booksellers were indifferent. Some said the cost of putting on a party was a money-loser, but most complained about entering their grocery stores or local big-box department stores the day after their parties and seeing piles of “Deathly Hallows” on pallets near the cash registers. In some cases, the books were priced lower than the independent bookstores paid themselves.
The independents weren’t alone in feeling the heat. When reviewing Barnes & Noble’s and Borders’ statements and SEC filings over the years, you get the usual “Harry Potter Year/Non-Harry Potter Year” blather, but when looking at the comparable store sales figures for “Harry Potter” releases, a disturbing picture emerges. Though each book is bigger than the last, the highs for the bookstore chains don’t seem to get much better, and the lows seem to get worse.
Something is seriously wrong with the consumer book business if bookstores of all sizes are struggling even when they have so many great books to sell. We do ourselves a disservice by not asking why.
Changing Customers, Changing Channels
If there’s one thing publishers need to understand, it is that most book buyers are disengaged and only purchase one to five books a year. (Simmons Market Research Bureau’s national consumer survey has shown this time and again.) This means there is a massive number of adults out there who read intermittently and probably don’t care about loyalty programs, author Web sites or three-for-the-price-of-two sales.
It’s also important to remember that Barnes & Noble and Borders Group have, for years now, been shuttering more physical store locations than they have been opening. Most of the closed locations are Waldenbooks or B. Dalton stores, but underperforming superstores do close as well: Barnes & Noble, Books-A-Million and Borders Group closed more than 500 locations in the past six years.
Meanwhile, Wal-Mart and Target locations (as well as other non-bookstore entities) have been multiplying: Wal-Mart and Target alone have opened more than 1,200 domestic locations, according to the companies’ annual reports. On a very basic level, these stores are a lot more convenient for the disengaged consumer who only buys a book once in a while.
Because there are no sycophantic bloggers promoting the book-retailing activities of big-box stores, their growing influence has gone relatively unnoticed. Yet non-bookstore physical locations are having the same kind of disruptive effect on bookselling now that the Internet had in the 1990s. It clearly shows in the numbers: According to Simmons, about 10 million more consumers buy books at non-bookstore, brick-and-mortar locations today than use the Internet to procure their titles. Plenty of them buy mass-market romance books at these locations, as they have for decades, but still more are buying hardcovers and paperbacks that grace the best-seller lists, contributing to slowing traffic at bookstores.
That said, the presence of some books at non-bookstores can make sense (e.g., Carson-Delossa Publishing’s “Mike and the Bike” was sold at bike shops), but the channel-stuffing of blockbuster books is cheapening what should be the most expensive product. It also isn’t like books are similar to other goods: Anyone can make or sell a hammer—it’s basically a commodity. When a publisher buys the rights to a book, only it can sell the book where the contract specifies. When a book from a popular author is sold everywhere, it behaves like a commodity when it really isn’t.
We also have to remember economic pressures are making it harder for consumers to buy books—regardless of the channel. Even if mass merchandisers get traffic that would otherwise go to a bookstore, there are few, if any, employees at these stores willing to help close a sale. If you go into a Wal-Mart and ask an employee for “Hatchet” by Gary Paulsen, you’ll be lucky if that person points you to the camping aisle and mumbles something about having one from Coleman.
If you ask for “Hatchet” at a store like Elm Street Books in New Canaan, Conn., chances are excellent you’ll be led to the children’s section where the book will be pulled off a shelf and placed in your hands. These are the same bookstores hosting events—with and without authors—to draw traffic in and get people buying once they get there. Even B&N and Borders Group are showing signs of returning to their roots as cultural centers of their communities and realizing that books are sold one at a time to one person at a time.
While it’s easy to get into whatever emotional or nostalgic reasons publishers may have to support bookstores, they often overlook the practical and economical one: In a bookstore, the future of the store depends on books. In a non-bookstore, the future of the book depends on the store. If publishers don’t ask themselves hard questions and do a better job managing their offline content, they might just wake up one day and realize the future is out of their hands.
Michael Norris is a senior analyst at Simba Information, a market research and consulting firm in Stamford, Conn. He is the lead author of “Trends in Trade Book Retailing 2009” and “Trends in Electronic Book Publishing 2009,” and a frequent speaker on news and events shaping the consumer book industry.