The Future of Bookstores May Rest on “Guerilla Retailing”

When you look into the rearview mirror of book retailing what do you see? A path littered with failed national chains, including Borders, Hastings, and B. Dalton, along with the rising dominance of Amazon. When you look into the future, what do you see? A path where Barnes & Noble believes smaller concept stores with wine bars and fancy food will attract more customers. But, does that approach make you feel any more confident about the future of the industry? Are we really placing our hopes on wine glasses and cheese plates to revive book retailing?

What if a different path could offer better results? Create business growth by rapidly expanding locations rather than shrinking them. Yet, how is expansion possible when Barnes & Noble and Books-A-Million can't afford to build more big box stores? Consider a guerilla-warfare approach: increase marketshare by fighting small.

In the military, guerilla warfare is a strategy where small groups of combatants use ambush techniques and mobility to affect a larger area. In book retailing, a guerilla approach means placing books and brands in small non-traditional outlets that can be quickly adjusted, scaled, or moved. The benefits go beyond just expanding location presence. There’s a more important advantage. You're also able to simultaneously grow advertising exposure without increasing your ad budget. This approach is backed by over a decade of research for consumer brands.

In the ground-breaking book, How Brands Grow, Dr. Byron Sharp of the Ehrenberg-Bass Institute proves that top brands gain marketshare by simultaneously growing mental and physical availability. "Mental availability" is advertising that builds memories in consumers' minds to remember a brand during a buying opportunity. "Physical availability" represents actual physical locations where consumers can purchase a brand's products. The more a brand grows both of these elements, the more marketshare it can attain over competitors.

For example, there is a logical reason why Coca-Cola is the world's most successful consumer brand. Not only does the company advertise everywhere. A Coke can also be purchased everywhere. Consider the guerilla strategy that Coke uses to place their product all over the planet using small vending machines, convenience stores, specialty shops, etc. Coca-Cola doesn't rely solely on mass-market retail outlets to move product. They use both mass-market and small outlets at the same time.

The important point to note is that mental availabilty (advertising) and physical availability (locations) must work together to achieve success. Setting up more locations won't create brand growth if advertising remains limited. More advertising won't help if physical locations remain limited. The good news is that both elements can be achieved at the same time, especially in book retailing.

For example, we know that the small kiosk model works for selling books. Choice Books is a distributor that successfully sells over 5 million units per year by placing small book racks in over 10,000 grocery stores, airports, drug stores, etc. The downside with their tiny racks, though, is that they don't offer advertising exposure for book retailers. But, the core idea of selling books via kiosks is a proven guerilla tactic.

I suggest that major book retailers consider the best of both worlds. For instance, Amazon, Barnes & Noble, and Books-A-Million could place branded book-selling kiosks in high traffic areas large enough to simultaneously advertise their brand. Each kiosk could feature a small selection of titles specifically picked for relevance to that location. Children's book kiosks could be placed in toy stores. Business book kiosks displayed in office supply stories. Movie theaters could display kiosks featuring the novels for current films. Kiosks with adult coloring books in craft stores. The big book retailers already have the supply chain systems in place to service these types of outlets.

However, the point isn't to require huge sales from these kiosks. That's an unrealistic expectation. Instead, there's a bigger upside. Placing lots of branded kiosks in high traffic areas helps retailers expand their advertising reach without expanding their advertising budget. The kiosks may not provide huge sales on their own, but they provide a lot of valuable advertising that helps drive more consumers to the big box stores.

Consumers have finite brains that cannot remember everything they see and hear. The purpose of advertising is remind people that brands and products exist. Yet, Barnes & Noble and Books-A-Million rarely advertise on a mass scale. So, millions of consumers forget about those retailers when a buying opportunity arise. Retailers must consistently advertise in order to maintain mindshare in the marketplace.

Billboards and TV commercials are effective advertising vehicles, but they can’t sell product directly in the moment. But, imagine having a network of billboards throughout major cities that could also physically sell books. A network of retailer branded kiosks in high-traffic areas can act like billboards that also sell product at the same time.

I live in Atlanta, Georgia, which has multiple locations of Barnes & Nobles and Books-A-Million stores across the city. Yet, those stores are struggling to grow sales, and I rarely see any advertising from those retailers. Placing branded kiosks in strategic locations would allow those companies to advertise their brand and generate book sales at the same time.

How would a retailer cover the cost of a kiosk network? There are several options. Kiosks could be funded through the company’s regular advertising budget. Or, kiosks could be funded by closing down an under-performing bookstore and use the money saved to pay for the kiosks. Also, a retailer could hold off opening a new store and use the planned money for that location to pay for numerous kiosks. Big box stores and national advertising campaigns are expensive. Small kiosks enable retailers to set up more locations and boost advertising exposure for a lot less money.

The future of book retailing should not rest on hopes that wine bars and fancy food will save the industry. Retailers can save themselves by understanding how brands grow. Expand advertising and expand locations at the same time. A guerilla approach to book retailing using kiosks makes this expansion affordable and manageable.