Back to the future with bookstores

The old saying, “History repeats itself” seems to be true in the recent history of book selling.

When the big chain stores of Borders and Barnes & Noble moved into town, the local independent bookstores all quaked in fear or squawked in high dudgeon about how the soulless giant franchises were ruining the business.

borders bookstore
Borders failed to compete with Amazon and has since filed for bankruptcy

But the chains taught the independents a valuable lesson: that some books were a commodity. The price and availability of New York Times bestsellers was more important than was the sales clerk’s expertise.

The weaker independents closed their doors while the big chains grew fat and happy. The surviving independents continued to disparage the big chains, but the chains delivered a better experience. They added cafes, benches where you could read for hours, and offered a much larger selection of books.

Then the World Wide Web came along, and after some initial jockeying for position, Amazon emerged as the Internet bookseller to beat. Now the shoe was on the other foot. The big chains squawked in righteous rectitude about how they couldn’t compete with a company that didn’t need to invest in bricks and mortar.

But Amazon taught the chains a valuable lesson: That all books were commodities if you already knew what book you wanted, and it was easier to purchase online, and the online vendors could stock far more titles. What’s more, the supporting information on the Web was far more valuable than anything a harried, youthful sales clerk could offer.

Both Borders and Barnes & Noble took huge body blows as the new business model assaulted them, but the Web delivered a better experience. Barnes & Noble created their own online presence and has managed to stay in the game. Borders, however, not only failed to grasp their role in their brick-and-mortar world, but they foolishly gave their online business to Amazon, and so filed for bankruptcy last month.

It seems to me, with the exception of Jeff Bezos, the founder of Amazon, the players in this little historical reenactment are unclear about their role, and keep trying to read from someone else’s script. Bezos appears to be the only person with a firm grasp on what he does for a living, and selling books is not it.

Jeff Bezos sells customer service. Amazon is attentive, easy, and the answer is always "Yes" to whatever question a customer might ask. Returns? Sure. Availability? No problem. Free shipping? That can be arranged. The only thing Amazon can’t provide to the customer is a warm, well-lighted nook, surrounded by good books, knowledgeable staff, author signings, good wireless Internet access, and a cup of cappuccino.

And right there, in a nutshell, is the solution for the brick-and-mortar crowd: provide the customer with the things that Amazon simply cannot provide, and offer it with the same level of exquisite customer service that the Bezos Army does.

Keplers bookstore
Keplers bookstore in Menlo Park, CA has fought off online competition with great service and customer loyalty

The local independent bookstore can’t compete with Amazon on selection and availability, so don’t bother. If I owned a small bookstore, I’d put several computer kiosks right in the middle of the store, permanently connected to Amazon. If, while sitting around sipping a macchiato and talking to a friend, you learn of some interesting book, you can turn to the computer and instantly research it, and then order it.

Rather than seeing Amazon’s strength as competitive, brick-and-mortar stores should see it as liberating: they no longer have to maintain such a large, expensive inventory of books or maintain distributor relationships to order requested books.

Instead, the local store can offer something unique and desirable: a physical place for readers to go where they are supported and welcome, and where the books on view are personally selected, intimately displayed, and available for perusal. No internet company can provide that.

No physical store is ever going to compete successfully with an Internet-based company on breadth of selection and encyclopedic knowledge. So physical stores that want to survive will offer the things that the Internet cannot provide.

A brick-and-mortar bookstore should be a designed to be the greatest place for a bibliophile to be, rather than the best place to purchase books, which is only one of the things that readers wish to do.

Many readers want a comfortable place filled with books where they can socialize with other readers. They want to find out about good books that are worth reading, and to share their enthusiasm for good books that they have discovered. They want to talk to others about books they have read, or things they have learned from books. Readers love to look at books, hold books, browse books, experience books. Buying them is not necessarily the central act of loving books.

A book lover’s haven would be like a clubroom or cafe, warm, inviting, with good lighting and soft chairs, strong wireless internet support, and many book shelves of fascinating, wide-ranging titles. Yes, there would be books for sale, but the main focus of the store wouldn’t be to sell books but to make book buyers happy.

Obviously, this requires a different business model, but that isn’t such a crazy idea. After all, buying books online is a new business model. I don’t know what that model would be, but I can imagine some viable candidates:

  1. Visitors pay a modest cover charge when they enter.
  2. Visitors pay a monthly fee, like a fitness club.
  3. Book publishers could subsidize the store.
  4. Revenue comes from sales of coffee, snacks, and internet access (the Starbucks model).

In addition, the store could generate revenue from several other new activities that haven’t existed before. These could include:

  1. A concierge service to receive and hold shipments of books for readers who aren’t at home during the day and cannot receive shipments at work.
  2. Most books today are ebooks, and the store could download them faster for a fee.
  3. The equivalent of Apple’s Genius Bar, where, for a small fee, an expert would help the customer fix or adjust their Kindle, iPad, or other eReader.
  4. One of the best things about local brick-and-mortar bookstores is that they can host special bibliophile events. Author signings, book clubs, and publisher presentations can all be lucrative events for an enterprising store. These are not new ideas, but charging for them is.

What is different is that the bookstore is now not making the majority of its revenue from the sales of books. Instead, it’s making money from being a great place for book aficionados to gather and be physically present.

Lending libraries used to provide a similar service. The card catalog was a resource for research, and the reference librarian could always arrange an inter-library transfer if the obscure volume you needed was in the next county. As a child and young man, I remember spending many delightful hours in various public libraries. Only relatively recently have I found myself whiling away my bibliophile hours in bookstores instead of libraries. Maybe what we are seeing is a back-to-the-future return to the library along with the decline of the retail bookstore.

I won’t mind losing the old brick-and-mortar bookstore as long as the benefits it delivered are still readily available. It would only be another example of history repeating itself.

15 Comments

Lane Halley
Your post reminds me of one of my favorite bookstores, Borderlands in SF. http://www.borderlands-books.com/ They have many of the community and comfort aspects you mention...they even took over the adjacent storefront and opened a cafe where people can hang out, snack, read and use the Internet. They haven't gone into concierge services (yet?) but they do hold titles when you're a regular and they know you're looking for something hard to find. -lane ps - thanks for the short captcha! Much less annoying.
Dan Saffer
Most e-books are pretty small, file-size wise, so faster downloading is a moot point. HOWEVER, what they could offer is EARLY downloading. Makes deals with publishers that people can read the ebook versions early, but only in the stores or only by going to the store to get it. Or something of that nature. No idea how exactly this would work, but for certain books, it would get me to the store.
Bill Gatewood
As a book lover I like your ideas, but as you mention the chains tried some of what you propose and didn't succeed ("The surviving independents continued to disparage the big chains, but the chains delivered a better experience. They added cafes, benches where you could read for hours..."). Also, what would preclude Amazon from opening their own "Apple Stores" and offering the same experience? I hope you're right about a back-to-the-future return to the library—but with food and drinks allowed! :-)
Karoly Negyesi
Affiliate sales as a revenue possibility. They could sell eReaders themselves -- there's a lot more margin on those.
Andrew Mayne
I think finding solutions for bookstores is a noble idea, I'm just not too sure about any of the ones you've offered: 1. Visitors pay a modest cover charge when they enter. Bookstores can't even get enough people in there when admission is free. 2. Visitors pay a monthly fee, like a fitness club. See number 1. 3. Book publishers could subsidize the store. Have you seen the state of the publishing industry? If there was surplus funds to be spent on subsidizing books, it'd be used to lower prices of said books. 4. Revenue comes from sales of coffee, snacks, and internet access (the Starbucks model). Now get rid of the money-losing book-selling part and the overhead all those books come with and you have a coffee shop that might break even.
Mark Evans
Interesting ideas but the key obviously be a business model that thrives based on the assumption revenue comes from things other than selling books. A couple of points about the Amazon-connected Internet kiosk idea: By giving people instant information about books, it might make them buy it right away at a store rather than wait a few days. The only caveat would be in-store prices would to be close to Amazon's. Thanks for the thought-provoking post. Mark
Alan Cooper
Thanks for the comments, everyone. Dan, I like your idea for early releases. In that same vein, I like movie DVDs because I enjoy listening to the director's commentary and watching "Making of" videos. Book publishers could add similar special value stuff such as interviews with the author or extra short stories and commentary. Bill, Yes! A library without that matronly old woman always saying "Shhhhh". Andrew, all of your points are correct. However, they are correct in the universe we currently live in. Entrepreneurs change the universe, and the rules change, and different truths become dominant in the new world. That might sound like hocus-pocus, but if you examine the paradigms of years past you will see that things that are obvious today appeared to be ridiculous before they came to dominate. My favorite one (thanks to George Gilder) is that 30 years ago all TV signals went through the air, and all phone signals went through wires. Today, it is the exact opposite. If 30 years ago someone told me that 90% of the phones in the world in 2011 would be radios, I’d have laughed in their face. The fact that you can laugh at my suggestions puts wind under my entrepreneurial wings. The future lies not in what makes sense (or money) but in understanding where there is an unmet human desire.
Richard Nash
Alan, you're singing a song I've been belting within the book/publishing industry for a while, it's thrilling to read similar ideas from with a totally different intellectual tradition. To echo/amplify your response to Andrew: 1. Bookstores don't charge now, but we didn't use to charge for television either. As many behaviorial economists have noted in recent decades, people have a very difficult time figuring out what things are worth and they respond to comparative signals. Bookstores are starting to charge for events, now, for example. $10 and you get a free copy of the book, for example. Suddenly, though, the event is the centerprice of the evening, rather than that thing you do before dinner. 2. Monthly fee, similar observation. Already we're seeing bookstores offer monthly book clubs. Subscriptions, effectively. 3. Publishers do currently subsidize bookstores. Marketing co-op. Typically a publisher pays $50 for each of their books mention in an indie monthly newsletter, $2-$5-$10K for placements in chains(s) etc. It's simply a questins of altering and amplifying from book-by-book to a more strategic approach. 4. Additional product lines. 5. And also: writing workshops (MFA programs are profit centers for universities bringing in $2-$4 billion/year. 6. Collaborations with restaurants on themed dinners; with winestores on pairing books and wine. Already Greenlight in Ft. Greene, Brooklyn is doing this. Already Word in Greenpoint NY is doing singles nights. Yes, there are models in gyms, in listener-supported radio, in numerous nonprofits... Anyhow, thanks again, Alan for coming at this from your standpoint...
Kathy Sierra
This post, along with Richard Nash's excellent comment, gives me hope. And I don't think the gym model is that far-fetched... I kept wishing libraries, for example, would be re-branded/re-positioned as "Center for Kicking Ass". Books alone hold near unlimited power to make us better at anything we can imagine. A physical place to help enable that could feel a little like the place you go to find and tune your superpowers. Serving double espressos would, you know, amplify those powers. Cheers
Gene Wolf
Sounds like what you're describing is less like a bookstore and more like a 60's style coffeehouse. Maybe some nice low key background music (NOT Muzak!), coffee, fresh baked pastries and comfortable seating. In today's electronic world anyone with a phone or iPad can come, read, sip coffee and chat with friends. Seems to me the books in such a place are secondary. If you have such a place, connected with wi-fi and excellent customer service along with reasonable prices, people will come to relax and enjoy the atmosphere.
Mary Ann S.
I like book shops, especially bookshops with espressos and newspapers. I love the Euro model and prefer the Euro approach: no laptops all over the place with people plugged into their own world and occupying the tables for hours on end. I agree that book shops that survive have found an eclectic mix of books and people space. Thank you for a thoughtful blog, Mr. Cooper.
Richard Nash
Let me also say, I recognize that this model will not support 5000, or even 2500 bookstores, probably. But it could support 1000, maybe more. And a variant on this model will support libraries some of which, in some ways, get this. Libraries are hurting economically right now, because municipal administrations are in such dire straits. But anecdotally, library use is up, as it often is in recessions, because of the resources it provides the community. So I hope libraries can cover neighborhoods that can't support a bookstore, given that the model I describe involves a fair amount of pretty bourgeois activity/disposable income :-)
Cindy
I am deeply sad about the decline of the printed book and I would love bookstores to survive, mega or boutique. I don't think there is anyway to save them. Is the boutique going to compete with the local library? Let's just face it, books are going digital. There is no stopping it.
Sonja
I can see a future for independent bookstores in similar ways - I think the environment and relationships they could provide will add value in a way that craft is experiencing a resurgence. They both offer opportunities for a tangible and personalised experience. I think the thing you've missed is that not all books convert to e-books well. I get the majority of my bestsellers and fiction as ebooks but my local independent offers me books as experiences. I think it would be a shame if we totally lost the shared enchantment of some beautifully illustrated children's picture books especially where a child wants to go back and forward to explore the details. Then there is being able to browse a delectably designed cookbook, pour over replicated blueprints and engravings in some historical non fiction, or flick through a retro designed poetry book. I may not have as many of these kind of "coffee table" books as fiction but I pay more for them, they cost a lot to post, and they are far more vulnerable to damage when packaged, so I tend to buy them at a regular bookstore. The other limitation of buying online is, despite recommendations, you tend to browse within known parameters - whereas at a bookstore you can pick up a book you would not otherwise have come across and get hooked. So I think building on the things that Amazon and e-books can never offer is a point of competitiveness and was always an area that good independent bookshops thrived on.
Josh
How about this for a new model: a chain of bookstores that would combine the best of both worlds with the following features - EMBRACE e-books.... the store would have a wi-fi network on which you are able to read (not download) ALL e-books available through Amazon, iBooks, etc. Anyone with an e-reader/iPad/whatever could come in, set up an account, and start reading. Copyright protected through some sort of DRM that associates the content with a token that's connected to the store. When they leave the store, the book disappears but their annotations, bookmarks, etc. do not. - In conjunction with the first point, the store is full of a wide variety of comfy chairs, rooms, spaces, etc. There would be nooks for individuals, bean bag chairs for kids (incl. at heart), meeting areas for book clubs. - Wi-fi is available for other purposes too for a small fee (e.g. $3-5 an hour. Price could be sliding scale depending on how many people are on wi-fi). This is not the main revenue driver, just enough to reaffirm that this is a bookstore, not an internet lounge. - Book club pricing of e-books. To encourage book clubs, they could register with the store and get a discount on e-book prices when they buy in groups of XX or more. - All of the available e-books are available for purchase through the store's network at prices slightly discounted to the online price to encourage in-store purchases. Amazon/Apple etc. foot the bill for the discount in exchange for the free advertising and community. If unwilling to do this, perhaps a portion of the snack sales could go to them in exchange. - Real books are available too. Let's face it, many people are not ready to give up the printed book. There's no reason to not offer a selection of popular titles along as well as a catalogue with super shipping options for items not in stock - Author events. Each store would have a section of it custom built for live and telecast author events. Authors could go to one location and be broadcast simultaneously to all or some of the others. Presentations or readings could be made interactive via Cisco's telepresence technology or Google + or other such solutions. Space is set up so that it can be paid admission for in-person events, signings, etc. - Good snacks - cheesecake factory, etc.

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