Rocket Bomber - retail

New York Times reports 17-year-old "news"

filed under , 27 March 2014, 17:47 by

“Rising rents in Manhattan have forced out many retailers, from pizza joints to flower shops. But the rapidly escalating cost of doing business there is also driving out bookstores, threatening the city’s sense of self as the center of the literary universe, the home of the publishing industry and a place that lures and nurtures authors and avid readers.”
Literary City, Bookstore Desert: Surging Rents Force Booksellers From Manhattan : Julie Bosman, 25 March 2014, New York Times

…this sounded really familiar to me for some reason. Oh, right:

“The B. Dalton on Fifth stayed open for close to two decades, until 1997. At that point the chain was owned by Barnes & Noble — and the hubbub wasn’t about new big boxes forcing out bookstores, but about rising rents in New York forcing some of the big boxes to close.”
Rocket Bomber, 24 February 2009

…and the B. Dalton on fifth, that I made note of five years ago?

“After 36 years of business, the Doubleday Book Shop on Fifth Avenue, a cerebral antidote to Tiffany’s glitter and Bergdorf’s finery, is shutting its doors at the end of the month. It will be the seventh bookstore to close on the avenue since the early 1980’s, signaling the end of midtown Manhattan’s strolling boulevard for book lovers.”
Another Fifth Ave. Bookshop Is Felled by High Rents : Lisa W. Foederaro, 17 June 1997 …that was seventeen years ago, as reported in some local rag, which one was it again? oh, yeah: the New York Times.

“‘You just have to walk down Fifth Avenue to see what New York has become — it’s become an outlet mall for rich people,’ said Esther Newberg, a literary agent, adding that she had just received an email from a Random House editor noting that the company was able to print books quickly because it owns its own printing plant. ‘Why don’t they own their own bookstore?’”
Bosman, op. cit.

Barnes & Noble could stand to own a little real estate, too: I mean, why negotiate rents, why not own the building? Of course, they did own a building, but they closed that bookstore in January.

I find it hard to cry for Manhattan. I feel sorry for some New Yorkers but it seems like the Powers That Be are rebuilding that borough into exactly what they want, a gated community and theme park for the rich …and apparently, also a collection of neighborhoods without bookstores.

Perhaps this should instead be a wake-up call for every publisher who still maintains an office in Manhattan: is it really worth the rent? I mean, when you can’t walk down the street to see your product for sale in a store window, is New York really the “book capital” of the US anymore?

“What I say is, a town isn’t a town without a bookstore. It may call itself a town, but unless it’s got a bookstore it knows it’s not fooling a soul.”
― Neil Gaiman, American Gods



B&N's Nook as differentiator

filed under , 28 February 2014, 10:13 by

B&N is clinging desperately to Nook.

Not as a hedge against Amazon (a battle that has been lost, I think) or in any sort of attempt to compete with Google, Apple, or Samsung — even with the balls and ego that B&N Chairman Leonard Riggio still has (at 73) I don’t think he’s delusional.

B&N needs Nook as a way to differentiate themselves from books-at-Costco and the remaining independent booksellers, and as a bulwark or backstop against the decades-long slide in reading.


[data from The Consumer Expenditure Survey that I last futzed with back in 2011; no, I’m not going to do a new chart. Per the source, aggregate spending on reading in 2012 was $13.6 Billion, so the trend line holds]

It’s not about competing with Amazon — instead, it’s about retaining the physical book fans.

Having a digital option for their customers, even a piss-poor implementation like Nook, is magnitudes better than not having a digital option. B&N is the largest bookseller (physically, if not in absolute terms anymore) so as the leader, they need to offer something more. Appearances count more than the reality of the situation, and B&N’s target customers are the ones that won’t convert to digital. Even if no one buys the Nooks (and the sales numbers point in that direction), the Nooks are there — given prominent placement in the front of the store — and lend the impression that B&N is doing something about digital and so the I-only-buy-REAL-books-customer feels better about the chain and their physical book purchases.

Many book customers know they’re luddites, and perhaps take some pride and enjoyment from the fact, and from their bookshelves, and from the whole tactile and physical aspects of their hobby — even if, when one is lost in a book, it all fades to the background anyway. This customer may not want an e-reader device, even if they are otherwise technically savvy — but since they are technically savvy, they also appreciate a bookstore that speaks to that part of themselves as well. Yes, I’m cutting an awfully fine distinction here; let me phrase it in the form of a question: Do you buy build-it-yourself furniture from Target and Walmart, or do you drive to Ikea and get something with a fake-Swedish name? Perception of the brand has a lot to do with customer decisions, whether the customers admit it or not.

Every book store occupies a niche — you can be small and artisanal, like the corner bakery serving up cronut knock-offs. You can be warm and neighborly, like the little sandwich shop that has great coffee and nice tables. You can be hip and trendy, like the pizza parlor that always experiments.

Or you can be big. Most of us buy food in a grocery store. The supermarket has a deli, bakery, and pharmacy — and a meat department because no one can go to the local butcher any more, and a produce department because no one even knows what a ‘green grocer’ used to be. We don’t all live within walking distance of a corner cafe or bistro — or indie bookseller — but we all know where the local supermarket is.

Barnes & Noble has to be the book supermarket, and that means departments, and that means DVDs and CDs, board games and jigsaw puzzles, blank books and bookmarks, cheap gift crap that no one buys — and yes, Nook.

[Would B&N do better if they got rid of the crap and just sold books? Gods, yes, I’ve been making that argument for years. But B&N sees more of a future in the crap than in the books, and the idea of being a department store is perhaps anchored deeper in their big-box-DNA than the books themselves are.]

B&N needs Nook, because they need the stage prop, the show of being Amazon’s equal.
I’m not sure if this propaganda effect is worth $60M or $100M or $200 Million a year (~$1.4 Billion to date) but B&N certainly thinks so, and is set to release yet another tablet.



Rocket Bomber Special: 2013 Holiday Gift Guide!

filed under , 29 November 2013, 09:27 by

PLEASE do me a favor: DON'T pick out any gifts for your loved ones. Don't buy the book you know they'll love, DON'T get that one gadget you know they've been droping hints about for the last six months, DON'T even bother with gift cards.

You’re going to pick wrong.

I absolutely guarantee you’re going to pick wrong — just like you did last year, just like you’ve done for many, many years. Everyone has just been too polite to say anything.

And then I have to spend days of my life, after the holidays, doing nothing but processing returns. At least once an hour I’ll be asked, “Can’t I just get cash back?”

And sadly, the answer is no.

So let’s all agree: The Perfect Gift Is an Envelope Full of Cash.

I’d love to get cash. Anyone aged 14-28 would definitely prefer cash. Do a gut check: what do you want? Sure, that surprise gift, the exact right thing is great when it comes from the one person in your life (spouse, partner, boyfriend, girlfriend) but for everyone else?

I say: If you’re not sleeping with them, they just get cash.


[If you are sleeping with them, this seems appropriate]

Imagine the time you’ll save. Imagine the lack of stress. If you think cash is too impersonal, put the cash envelope inside of a tin of home-made cookies. That would be fantastic because, c’mon, *cookies* (AND cash!) That would be a holiday gift I’d be talking about for decades. The folks in the retirement home will be sick of hearing about it.


[cash is even traditional in some cultures]

So do yourself a favor. Do your loved ones a favor. Most Importantly, take the pressure and the hassle away from the poor retail clerks who have to process all those damn returns for clothes and other crap gifts: Just give cash this holiday.

Thank you for you time and polite consideration. And I’ll be back in 2014 to repeat this message in RocketBomber’s next Holiday Gift Guide!

##

image credits:
http://www.flickr.com/photos/beglen/157929769/
http://www.flickr.com/photos/ashevillein/2421648773/
http://www.flickr.com/photos/10899777@N02/1250836095/



The Core of Amazon is not the website, but the warehouse

filed under , 18 November 2013, 11:45 by

[blockquote]
“This is when Amazon drastically expanded the number of warehouses to more than 10 around year 2000 and started stocking most products that it sold. The focus shifted to a business model built around excellent delivery performance and efficient logistics. Customers were amazed at how quickly their orders arrived on the doorstep.

“Amazon did not stop reinventing its business model here. In 2006 it went further and unveiled a program called Fulfillment by Amazon, whereby independent sellers could use Amazon’s warehouse network to fill orders and delegate to Amazon their logistics-related decisions.

“Under this new model, Amazon essentially became a wholesaler of goods sold by many much smaller virtual storefronts. What the distributors and publishers, in the aggregate, were to Amazon in its early days, now Amazon was to the participants in its fulfillment-for-hire program. What used to be outsourced became the core proposition and strength.

“Amazon’s recent decision to further develop its fulfillment capabilities (by spending close to $14 billion to build about 50 new warehousing facilities) to bring a large fraction of the US population in the same day delivery catchment area reflects that, for Amazon, the Internet retail model has now come full circle.” [/blockquote]

Amazon Constantly Audits its Business Model : Karan Girotra and Serguei Netessine, 15 November 2013, Harvard Business Review Blog Network



Are there weaknesses in Amazon's armor?

filed under , 7 November 2013, 13:08 by

“Why do some stores succeed while others fail? Retailers constantly struggle with this question, battling one another in ways that change with each generation. In the late 1800s, architects ruled. Successful merchants like Marshall Field created palaces of commerce that were so gorgeous shoppers rushed to come inside. In the early 1900s, mail order became the ‘killer app,’ with Sears Roebuck leading the way. Toward the end of the 20th century, ultra-efficient suburban discounters like Target and Walmart conquered all.

“Now the tussles are fiercest in online retailing, where it’s hard to tell if anyone is winning. Retailers as big as Walmart and as small as Tweezerman.com all maintain their own websites, catering to an explosion of customer demand. Retail e-commerce sales expanded 15 percent in the U.S in 2012—seven times as fast as traditional retail. But price competition is relentless, and profit margins are thin to nonexistent. It’s easy to regard this $186 billion market as a poisoned prize: too big to ignore, too treacherous to pursue.”

emphasis mine.

No Stores? No Salesmen? No Profit? No Problem for Amazon. : By George Anders, 7 November 2013, MIT Technology Review

##

I like this article a lot — not just for the two paragraphs quoted above (which hit on several points I’ve also made)

“The change in customer demand does not begin and end with a web site and is not limited to online sales. When someone wants a book, they will seek it out from any retailer, and their buying decision is affected not by the discovery process but rather the same mix of price and convenience that backs all of their sales decisions.”
Bookselling: Not Dead Yet. : RocketBomber, 12 July 2013

“The company lacks three of conventional retailing’s most basic elements: a showroom where customers can touch the wares; on-the-spot salespeople who can woo shoppers; and the means for customers to take possession of their goods the instant a sale is complete. In one sense, everything that Amazon’s engineers create is meant to make these fundamental deficits vanish from sight.”
Anders, MIT Technology Review, op cit.

“To Amazon, retailing looks like a giant engineering problem. Algorithms define everything from the best way to arrange a digital storefront to the optimal way of shipping a package. Other big retailers spend heavily on advertising and hire a few hundred engineers to keep systems running. Amazon prefers a puny ad budget and a payroll packed with thousands of engineering graduates from the likes of MIT, Carnegie Mellon, and Caltech.”
Anders, MIT Technology Review, op cit.

Right now, Amazon is winning the fight because they actively seek out ways to minimize their weaknesses. When a customer considers the ‘mix of price and convenience’ many, many times Amazon wins there, too. The question for competitors is how to find a chink in Amazon’s apparently fool-proof business model and attack-proof walled garden.

Walmart is trying to think laterally — leveraging what they have that Amazon doesn’t: Thousands of physical stores already in close proximity to their customers. Walmart suffers from two serious handicaps, though. First, Amazon has a 15 year head start, and second, Walmart has a serious image problem. For many consumers, Walmart = cheap — and not in a good way.

How to compete?

Read this: Taking down Facebook, piece by piece : Rian Van Der Merwe, 24 October 2013, Elezea.com

conclusion of the article: “Facebook is in a classic position where, as a dominant provider of horizontal social services, it is in danger of being taken down piece by piece by several vertical players who provide specific, narrow experiences very well. Facebook has become a social media firehose. It won’t be replaced by another firehose, but by a bunch of different cocktails that users can customize as they please.”

Is Amazon also a “dominant provider” with a horizontally-expanded business? One can also easily make the argument (in books, especially) that Amazon is also simultaneously trying to be a vertically-integrated near-monopoly — and I don’t mean “monopoly” in anti-trust terms, per se, but rather that Amazon is seeking to develop a self-sustaining, wholly-owned ecosystem of books that operates independently of the ‘old’ book market, to the point that the competition becomes irrelevant.

Ignoring books for a moment, though: Amazon is vulnerable on other verticals. Zappos and Diapers.com were bought up by Amazon before they could really become a headache — and perhaps also to keep them from becoming business-magazine-cover ‘success stories’ that might inspire others.

Where would I attack Amazon? I think DVDs might be an option, though it would be hard to recreate imdb.com from scratch. (Amazon bought imdb, too, btw). A ‘Goodreads’ for movies might be successful, though — maybe Rotten Tomatoes should try their hand at online retail.

Music is always an opportunity — iTunes seems like a winner here (Amazon is in 2nd place) but many smaller players are working the fringes. Music has always seemed like an indy, garage type endeavor (at least in myth) and I could see a mix of Pitchfork-like-reviews combined with Soundcloud-like-easy-streaming-and-sharing working exceptionally well — you know, except for the selling things and making money part. (if you figure that out, let me know)

Newegg and Tiger Direct already compete with Amazon in the computers, peripherals, parts, and small electronics space — and I think manufacturers are doing themselves a disservice by not doing more to explore and exploit direct sales to their customers.

(The same goes for publishers, especially the genre publishers in Mystery, Romance, and Sci-fi.)

This is all just food for thought: if I had a killer solution, I’d be writing a business plan and shopping for VC funding.

The point I’d like to make (yes, I’m finally getting back around to it) is that the e-commerce revolution is a change in customer demand. The better one enables customers — with good information, guidance in the form of curated collections and impartial reviews, ease of ordering, and sufficient choices — the better one will do. Indeed, price is the only consideration for some customers — but not all. A good experience, a no-bullshit approach, and intuitive seach tools (combined with expertise and selection) might go even farther than ‘lowest price’ with most customers. We all know: you get what you pay for.



To date, no one has built an actual 'lifestyle shopping destination' yet because they keep looking at the wrong end of retail.

filed under , 6 September 2013, 13:43 by

“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

##

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…)

RobertScobleShenzhenChinaBookstore
[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.



An Amazon Rant turned into something else entirely: College Bookstores, Warehouse Jobs, And The Glories of Inefficiency

filed under , 30 July 2013, 13:57 by

disclaimer: Yes, I work for Barnes and Noble. I also speak for myself, have better ideas on how to run a bookstore than the damnable corporate overlords, the information presented here is publicly available not derived from my position as ignorable field management mucking about in the trenches, and all opinions below are my own. Having satisfied the “code of conduct and business ethics” I now thumb my nose at the necessity for a disclaimer and wonder when we let the lawyers get in the way of a good drunken rant.

[note to self: copy that bit above as the new boilerplate disclaimer for business-related posts, and add it to my ‘about’ page for the blog.]

##

Amazon is getting credit for expanding it’s warehouse work force from 20,000 to 25,000.

http://www.bloomberg.com/news/2013-07-29/amazon-hiring-5-000-in-warehouses-to-meet-customer-demand.html

Amazon has at least one quarter of the business. (as much as 27%, by some estimates.) B&N, nationwide retail book seller, has a sixth.

source: http://www.publishersweekly.com/pw/by-topic/digital/retailing/article/54609-e-books-market-share-at-22-amazon-has-27.html – the numbers halfway through 2012 (according to PW) were 27% Amazon vs. 16% B&N

Out of courtesy, I won’t steal and embed PW’s chart, but you can find it in the article linked, which I recommend you go ahead and read […or here, direct link].

So Amazon is looking to increase its warehouse work force by 25% (alongside the additional warehouses built, economic activity, etc etc) and gee that looks great. “Amazon is creating jobs! Let Me Go Make A Speech About It!”

I know Amazon sells other stuff, but the huge investment in customer fulfillment logistics has to be wedded to the expectation on Amazon’s part that these moves will increase their overall sales, including their share of all book sales: Big, and looking to get bigger. A proportional increase in market share to match the increase in staff would take them from a quarter of the retail book business to a third, 33%, one in three of every book sold.

You know, just by hiring 5,000 people to work for, what was the figure, $11-15 dollars in hour? — doing physical labor in a warehouse, which should be admired, not denigrated as it is hard work but honest — but c’mon, even with Amazon stock options: this isn’t a career path. It’s a job, a decent job, but with exceptionally few opportunities for promotion and no lateral opportunities for advancement.

##

B&N has a smaller share of the retail book business [it pains me to admit]. But B&N employs 34,000 full and part-time employees as of April 27, 2013, in 1300+ storefronts: the 675 superstores and the 686 college bookstores. [source: page 5 of B&N’s most recent annual report]

Damn. B&N now has more college bookstores than Big Boxes. This is… OK? That business decision is above my paygrade. It seems wrong, though. College bookstores are great, I have to admit: solid margins on textbooks, guaranteed customer base, extremely seasonal (the beginning of semester crush) but also regular and something that can be planned for, and around.

There are drawbacks though — and I’m going to take some space to say this even though it is taking me far away from my topic:

  • College Bookstore locations are, in almost all cases, owned by the college and only the operations of the bookstore are leased. This is even worse than having a landlord, as the College owns the location and also still technically owns the business. I’m sure B&N signs multi-decade deals, or at the very least, provides strong incentives and options for schools to renew whenever the operational agreements expire — but this is not the rock-solid business some assume

Oh, look, there it is in the most recent SEC filing under “Risk Factors” (pgs 33-34):

[blockquote]
B&N College may not be able to enter into new contracts and contracts for existing or additional college bookstores may not be profitable.

“An important part of B&N College’s business strategy is to expand sales for its college bookstore operations by being awarded additional contracts to manage bookstores for colleges and universities. B&N College’s ability to obtain those additional contracts is subject to a number of factors that it is not able to control. In addition, the anticipated strategic benefits of new and additional college and university bookstores may not be realized at all or may not be realized within the time frames contemplated by management. In particular, contracts for additional managed stores may involve a number of special risks, including adverse short-term effects on operating results, diversion of management’s attention and other resources, standardization of accounting systems, dependence on retaining, hiring and training key personnel, unanticipated problems or legal liabilities, and actions of its competitors and customers. Because the terms of any contract are generally fixed for the initial term of the contract and involve judgments and estimates which may not be accurate, including for reasons outside of its control, B&N College has contracts which are not profitable, and may have such contracts in the future. Even if B&N College has the right to terminate a contract, it may be reluctant to do so even when a contract is unprofitable due, among other factors, to the potential effect on B&N College’s reputation. Any unprofitable contracts may negatively impact the Company’s operating results.”
[/blockquote]

to that I would add:

  • College bookstore locations vary greatly in size, but most are smaller than 20,000 sq.ft. – while the big box superstores start at 20,000 sq.ft. and most are a good bit larger.
  • Operating a separate chain of college bookstores under the same trade name leads to brand dilution and customer confusion. Technically, if you bought it at a college B&N, I can’t even process the return at one of our trade stores. Yes, I know they’re only 6 miles away. Yes, I know they have a big B&N logo on the front, just like me. [Oh, of course I know a work-around. I’ve been working-around our computer systems for years]
  • Related: So the B&N at Georgia Tech sells textbooks, iPads, computer software, college-badged sweatshirts, some home goods (dorm goods?) — they both rent and buy back textbooks, and (most hurtful) they have a larger manga selection than I do at my store. This is all because they are on a College Campus, operate as a College Bookstore, and That Is A Different Business. I don’t and can’t do any of that. But there is this Big Fat B&N logo right above the front door… Since the GT store is listed in the phone book as “The Georgia Tech College Bookstore” *no one and I mean no one* can find that telephone number, but oh boy howdy can they find the listing for “Barnes and Noble, Atlanta” so at my very fine bookstore not only do I get my daily call volume, I also [joy, joy] get to inform and educate the general public about the idiosyncrasies of our byzantine corporate structure, the hedgerow that exists between the college and trade divisions of my company, and why *I* can’t buy, sell, rent, order, or process a return on their textbooks for them. It’s fun. On top of an already stressful job, why, it might drive one to drink.
  • The built-in divide extends to our website: use the store locator, and you’ll get the Trade locations but none of the college bookstores. Good luck even trying to find their address online. And yes, customers call my store every day looking for even this basic information on the two B&N College Bookstores in town.
  • …of course, none of this would be material if we had more trade stores — but even before Riggio sold the B&N College Division back to Himself, our real estate/development office avoided placing trade stores to compete with the college bookstores. Per the disclaimer above: I have no inside knowledge of this, as that is above my paygrade; but I can read a map and have some idea of how real estate development works.

None of this would matter were it not for the deliberate muddling of the B&N/B&N College brands. This isn’t just a customer service issue: how much of the stock valuation and potential spinoffs, sales, mergers, buyouts or buy-ins of the Nook/B&N brands are potentially spiked because of uncertainty about which operations (trade, college, online retail, and online digitial) are included in any potential purchase or investment? The four, or five, Barnes & Nobles each need a brand and identity — hell, make that six Barnes & Nobles if we include the (recently-abandoned?) nook hardware. By keeping it all much-too-close, and by being secretive and playing the spinoff game too close to the vest: the whole company suffers.

##

before I was sidetracked, I was talking about jobs.

Right now Amazon employs 20,000 warehouse serfs, and is looking to hire more. — 20,000 out of 88,400 full- and part-time employees [source, pg 3, 2012 Annual Report, pdf] — so order fulfillment is just a sideline for Amazon as they only dedicate a quarter of their staff to the task. One presumes the other 75% of Amazon is working on either web solutions, hardware, collectively hypnotizing Wall Street, or crushing my soul.

If one were lucky enough to get an Amazon warehouse job in Tennessee, what are the chances you could move up from that job, internally within Amazon, to Seattle and some sort of web, corporate, purchasing, accounting, or human resources position?

[I’ll leave that as an exercise for the student.]

Barnes and Noble, with even less book market share, employs more people: 34,000. Now of course that included the home office staff, our warehouse employees (yes, we have those too) but mostly it’s the booksellers in 675 Big Box Bookstores, doing the impossible and exceeding expectations daily*.

[* in 2008]

I am the first to acknowledge the bookstores have changed. In 2008, B&N had 718 Big Box Stores and the company employed 40,000 full- and part-timers. (not including seasonal hires: each December would add another 10,000 temp ‘booksellers’ to that total). The benefits, frankly, were awesome: even part-time, 20hr a week employees qualified for health benefits (in 2008) and (in 2008) the number of full time positions was roughly equal to the number of part-time. There was an employee development track, and a ladder: from part-time to full-time to “lead” to “dept. manager” and from there into a salary management staff position. In 2008. Or going back, from roughly 2000-2007 while the chain was still actively expanding, with multiple new store openings in each metropolitan area, annually and while the corp. still looked to develop talent from within.

Why, one could join the company in 2001 as a part-time, seasonal bookseller, but if one had aptitude, a willingness to work flexible hours, and kept showing up and doing the job – between training, on-the-job experience, and making the most of available opportunities: a bookseller could go from the back room to front of store and on to store management.

I did.

That door closed in 2008. While the chain was expanding, and promoting from within, opportunities abounded. Now, in 2013: we’re closing more stores than we open, and rather than look for talent in our own staff — sadly — there is a full-on corporate initiative to actively recruit managers from other retailers.

[If Len, Mitch, Dan, or Steve feel it is necessary to fire me for letting that slip, fine.]

In the 5 years past, B&N has gone from a culture that actively developed and promoted talent internally, even as far down as the individual store level, to… well, to what? To a caretaker organization merely overseeing their own long fall? Yet-another-retailer who hires only part-timers – because that’s what Wal-Mart is doing and we have to compete with the lowest common denominator? Paring back on customer service because payroll is the only variable the corporate office has control over, even when our own customers say the only reason they shop online is they no longer get the service in-store that they are accustomed to?

##

A fading bookseller chain can only manage 25,000 bookseller jobs (we’ll assume the rest are in a warehouse or at corporate) while Amazon boasts 20,000 warehouse jobs (since they have no bookstores we have to consider these as equivalent) and Amazon is looking at adding 5000 more.

I would love to devolve this down to a single equation, but I think the whole post above kind of negates that.

Bookstore jobs were good jobs, up until Amazon ruined it, and my corporate overlords went Full-On-Wal-Mart on our employees.

Amazon Warehouse jobs are really excellent warehouse jobs. That said: warehouse jobs suck.

And it all comes down to ‘efficiency’

We’re losing jobs because the old jobs were ‘inefficient’ and for some reason that is bad.

Inefficiencies are Great. Bookstores should, honestly, be as inefficient as possible, as that is the singular bookstore characteristic that spawns discovery.



Market Maturity.

filed under , 26 July 2013, 21:07 by

[What is it with me and the food analogies? I’m fairly certain I’m eating enough…]

When you go to college…

OK, so it’s more about when *I* went to college; I feel my experience is typical but may not be universal – but as in so many of my posts, I utilize the second-person while writing because I want to make it seem more immediate to my readers. Anyway, moving on:

When you go to college and for the first time are away from home and have to grub for yourself (no more parental guidance and/or mandates on that front), even when you have a (parentally supplied) meal plan via the college dining halls (hey, you’re a freshman, and Mom didn’t want you to starve) :

1st. You tend to go a little nuts with fast food.
2nd. You also explore the world of microwavable convenience foods.
3rd. You run out of money. You do the ramen thing.
4th. You finally give in and actually use your meal plan for a week.
5th. You figure out the worst, least healthful, most-fast-food-like options at the dining hall.
6th. You try cooking for yourself in the dorm kitchen. Once.
7th. You consider living on Mountain Dew and vending machine food.

and then finally someone clues you in on the cheap-fast-mostly-good pizza place (or multiple places) that will deliver right to your dorm.

Given your age at the time (late teens, still growing) and your finances: anything hot and covered with cheese is delicious* and the cheaper the better. College kids and pizza are kind of a stereotype, actually, and I’m sure while it’s not true of everyone: I know you recognize the type.

Maybe not pizza… But food delivery to dorms? I’m pretty sure that is universal. (in 1993 at Ga. Tech there was a pizza delivery place that also did chicken fingers — no, not wings — and would pair them with thick cut steak fries and a homemade honey mustard. For like $5! Those were amazing; I still miss those. The place that made them was bulldozed in 1995.)

Soon after you are able to make your own food decisions, you discover pizza delivery and it is literally the best thing ever — for a time — but then you grow up.

After a few semesters (or years) of fairly continuous pizza, punctuated only by late-night trips to greasy-spoon diners (if you were lucky; Krystal or Taco Bell if you weren’t) eventually you realize that this sort of diet is non-sustainable. That or you turn 30. Or you get married, and your wife has other ideas about what you should be feeding your kids.

Your tastes change, you discover a wider world of options, you find new cuisines and new restaurants, you discover the joys of sharing food with friends, you discover a conscience and think about where your food is coming from.

Even if you don’t become a full-on foodie, I think most of us would agree that supporting our great, local, small restaurants is better than shopping at nationwide franchises and chains. When we can find a great, local, small pizza place – that delivers! – then our conscience is salved and we can fall back on the old bad habits anyway. (In *my* neighborhood, I found one with a bar – best/worst thing ever!)

I think the main point I’d like to make, though, is that when we are young and everything is kind of new to us, we can go overboard on something that is tasty and convenient.

And after we grow a bit, while we’ll still do the easy thing that we know is bad for us — we just do it less. We order pizza every other week, or once a month, rather than 3 nights a week and every Saturday night.

##

Internet retail (yes, which 20 years old already) is still in that young-college-age phase where we do what seems easiest even when we know (or eventually learn) that it’s kinda bad for us and unsustainable in the long run.

“W00T! Amazon! I ♥ those guys! Anything I want, delivered fast, cheap, and I mean anything I want! W00T!”

As someone who worked as an RA in college: this is exactly how freshman reacted when they discovered the local pizzerias that delivered.

The market will continue to mature. Options that seem vague and mostly useless now will grow on you in time, and you’ll find yourself exploring more, trying more things. Options that seem stupid now, while your are still enjoying Amazon/CollegeDormPizzaDelivery, will slowly make more and more sense to you later as you consider the other costs (outside of just dollars) built into the ticket.

…Or not.

I know guys well into their 30s who never really grew out of that. (even after marriage, kids, etc. – it can take a diagnosis & prescription for cholesterol and high-blood-pressure meds to scare them out of it).

I guess what I’m saying is Amazon is fine, in moderation. But look around, be adventurous, explore, graze, and maybe incorporate some local options in your overall consumption diet.

##

* anything hot and covered with cheese is still delicious. I’m one of those guys in their 30s who never really grew out of that phase. I cook at home quite a bit *more* these days, though.



A Different Analogy.

filed under , 17 July 2013, 10:02 by

note from MB: this extended aside was written as part of a longer post on the Business of Bookselling – the idea was compelling (to me) but not a good fit for the larger argument I was trying to make. Not one to be wasteful, I decided to pull it out for its own post. There isn’t an argument here (at least not a complete argument) (or a firm conclusion), but I feel the analogy might give some folks a new perspective on just how tough it is to sell books these days.

##

The Pie’s the Thing.

Let’s say I save my nickles and pennies and decide to open up a restaurant. I notice folks like pizza, so I decide to make it a pizza restaurant.

To keep things easy (on me and my staff) even before I open, I also decide it’s going to be a pizza buffet – one of those all-you-can-eat types — we pick the top 20 favorite pizza-topping-combinations, we arrange to have at least 10 of those 20 coming out hot and ready to eat multiple times throughout the lunch and dinner service, on a easily-browsed buffet line where you can see what we have and grab it. Cashier is to your left.

We’ll cycle through recipes to keep things interesting, so the next time you come in, you might not see an old favorite, but it’ll be back soon. With the recipes, a small staff, and a plan: we’re good to go. We advertise the pizza buffet, we open for business…

And our customers aren’t having any of it.

Instead of grabbing a plate and taking pizza off the buffet service line, everyone who comes in just grabs a table and waits. They demand someone comes to the table to take their order, even though (from the sign outside, to the service line inside, right down to how the tables are arranged and the whole restaurant is set up) it should be obvious this is a take-what-you-want buffet-style dinner service.

“You sell pizza here, don’t you? As soon as you send a waitress to my table, I’ll order.”

…but sir…

“What kind of restaurant are you running here? No one has been by to take my order and it’s been 5 minutes!”

…but sir, this is a buffet, you can just help yourself…

NONSENSE. If you sell pizza, you have to be a full-service restaurant. That’s obvious. That’s the only way to sell pizza. Are you sure you know what you’re doing? … I’m Still Waiting…

##

This is the Booksellers Conundrum — we do everything we can, to make the books easy to find, and all day long the customers ignore signs, refuse to walk more than 20 feet, and generally flop around the main aisle,

“Oh your store is *So Big*! How does one find anything?”

On top of that, no one can run a bookstore unless we also provide the equivalent of a research librarian with a graduate degree. “I need a book comparing the economic impacts of solar and other ‘green’ alternative energy sources vs the so-called cost savings we enjoy because fossil fuels are an established industry where historic investments and other sunk costs have already been repaid.”

come again? Of course that wasn’t a real question: the customer asked “Where are the books on solar energy?” — I didn’t get to what the customer *really* needed (the chunka-text above) until we’d been looking through the bookstore for a good 15 minutes. Pro-tip: if you’re writing a graduate paper on it, there likely isn’t a book about that specific topic yet.

“Yeah, I don’t have a title or author, but I need anything you might have on the import-export business, logistics, and agile business management.” “Yeah, I just heard an interview on the radio but I didn’t catch the author’s name but the book sounded really interesting, do you have it?” “This is great, but do you have any books on organic ostrich farming?”

##

[bored]hi my name is matt i am your waiter how can i serve you today.[/bored]

“Great! So it turns out everyone at the table wants something different but we’re not sure exactly what; say, instead of this menu can we see the pizzas? and you do sell by the slice, right?”

*facepalm*

So. um. We’ve set up a beautiful buffet, and instead of looking at it [browsing the bookshelves] you want someone to tell you what’s on there, then bring the options to you so you can then critique our selections and tell us how bad we are at our jobs?

Oh, I’m not done with the pizza metaphor yet. Two weeks into running our buffet/sudden-full-service-pizzaria, the phone starts ringing.

“Hello, yes, I need 2 lbs. of buffalo mozzarella”

what?

“yes 2 lbs. of buffalo mozzarella, can I pick it up this afternoon?”

um, what?

“Surely this can’t be the first time you’ve been asked; you do sell pizza, right? I just need 2 lbs of buffalo mozzarella and I’d like to pick it up today.”

We do sell pizza, but, um, you want us to just sell you the ingredients?

YES. Man you’re slow.”

But sir, we’re not really set up for…

AHEM. So. You sell Pizza, yes?”

…yes…

“And you use mozzarella, yes?”

…yes…

“And so you have mozzarella for sale, yes? …yes?”

…um, when you put it that way…

“So I’ll be by in 2 hours – ah no wait, I’ll be busy – I’ll send someone by in 2 hours, just have my cheese ready for them to pick up.”

What? Ah, sir we sell pizzas…

“Well you certainly won’t be selling them very long if this is your attitude toward customer service. Hmf!”

##

The bookstore is set up for discovery. You come in, you browse, you read the jacket copy, maybe a chapter or two, and eventually: you buy. The bookstore is an all-you-can-eat buffet.

Our customers no longer treat us as such. Customers come in, cruise right up to the information desk, and they demand books (and get pissy when we’re sold out of, say, The Cuckoo’s Calling) or they get on the phone and treat us like a pizza place: “I need 12 copies of Maxwell’s Failing Forward and Bob the unpaid intern will be there by 2pm to pick them up. Oh, even better: can I give you my credit card over the phone? You don’t deliver, by the way, do you?”

Oddly enough: we weren’t set up for that.

Before you say, “Well that’s your job, isn’t it?” — How many retailers have 4 separate phone lines to handle the daily customer call volume? And please tell me which other retailers have an information desk? No, not a customer service desk, but an honest-to-god information desk where a part-timer making minimum wage is expected to routinely make recommendations based on their personal comprehensive knowledge of Literature, History, Philosophy, Religion, Sociology, Psychology, Technology, Foreign Languages, Pop Culture, what the kids are reading, what Oprah is reading — oh, and of course, at least some familiarity with the sentimental poetry of Alphonse de Lamartine.

The question at a retailer is, “which aisle has Peanut Butter?”

I don’t know what bookselling is anymore, but it ain’t retail. Retail is the income producing activity that funds the rest, but our job is not retail.

We will try to accommodate you as much as we can, but you’re treating an all-you-can-eat, $4.99 pizza lunch buffet like a personal caterer and specialty grocery store. Instead of enjoying the local neighborhood bookstore for what it is, and relishing that, *reveling* in it: everyone wants their local bookstore to also be the internet.

Yes, your local bookstore can and does do special orders. Why is this the obligation of bookstores, though? Say you heard of a trendy lipstick, one not carried locally — do you demand your local CVS special order it for you, have a clerk call you when it gets in, hold it for 2 weeks so you have plenty of time to pick it up — and not charge you anything if you change your mind, or forget and never pick it up, or find it cheaper online somewhere so there’s no need to buy it?

[back to food analogies]

Sizzle vs. Steak

One can order certain cuts of beef online, frozen, [I hate to advertise for a specific company; a search will pull up multiple vendors, or at least the one very large vendor] and for as little as $4 a meal, you can get steaks and burgers delivered to your home (packed in dry ice) ready for skillet or grill. Going to a warehouse-style store (CostCo or similar) you can likely get the same cuts at a discount, as little as $2 a pound, if you are willing to do a little work yourself in re-portioning and re-packaging and freezing.

Even at the local supermarket, by watching sales, I can manage $6-a-steak for a large hunk-of-entree (boneless rib-eyes are a personal fav) that can be cooked at home with minimal fuss.

And of course: That same hunk of meat will cost you $16 minimum, and maybe $20 or $25 at a fine dining establishment.

Same cow. Same meat. Same cut. $25. “But it costs me $6 at the grocery store! and hell, I bet I could go on the internet and mail-order that same steak for $2!”

One could argue that at the steak house, you’re paying for the sizzle, not the steak. The presentation, the expert preparation, the ideal sides, the experience. One certainly can order a steak online, sitting at home, and with some work, yes, indeed, it’s the same steak. But that $25 buys you more, a lot more (subjectively), when you get the same steak at a steak house.

What does this have to do with books?
[besides an obvious parallel price point, he asked, knowingly]

When you buy a hardcover book, in its first week of release, even discounted [as they inevitably are these days] you’re still paying $20 for what-is-eventually-going-to-be-a-$7-book for what, exactly?

Well, obviously, it’s a physical book and you get to read it. As a physical book, others see you reading it. You can lend it out when you’re done, or leave it on the coffee table so your guests can see what you’re reading. When you put it on your shelf at home, visitors to your home can see that you didn’t wait for the paperback: you like this author enough to buy it in hardcover.

You spent $20 for the sizzle, not the steak.

In an age where the ebook releases simultaneously with the hardcover and immediately undercuts it on price (whether we’re talking $16 or $14 or $9.99) — the portion of the market that buys New-York-Times-Bestselling-Author hardcovers on the day of release is still the same. By analogy: the market for $25 steaks is not the same as the market for raw meat. There will always be a opening in whatever market for the “sizzle”.

And all other things being equal, why would someone buy a book at a bookstore when there is an e-book version available for less? That’s a philosophical question.

Why would someone buy a CD for $12.99 when the same music is available from iTunes for $8.99? Do they not use iTunes? Do they not like iTunes? Do they just want a physical copy that they own without the digital nonsense?

Maybe they like the flexibility of a book, not tied to a device. Maybe they’re my grandma, and they don’t have the requisite device.

Maybe they come to the bookstore because we stock books — a great big beautiful book buffet — and the fact that such a place exists in their neighborhood is reason enough to go there, and shop there, and yes, buy the so-called “overpriced” version.

##

There are a whole lot of folks (up to and including all of Wall Street) willing to conflate mail-order with retail – to the detriment of both. Analysts and journalists who aren’t really readers themselves (I can tell) are more than willing to dump all over book retail, present their own opinions as market realities, and declare the bookstore dead before they themselves even bother to walk into one.



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