Bookstores

Why the Seattle Mystery Bookshop Must Close

20 October 2017

From Seattle Mystery Bookshop:

I’ve worked here almost since the day it was open for business. At first, I was here just one day a week, so that Bill could have a day off – which he used to do bookkeeping at home. I remember their long dinning room table which was covered with pile after pile of paperwork. I don’t know where they ate dinner. Slowly, this place absorbed my life until my brain looked like Bill’s dining room table. In ’98, when he felt like stepping back from ownership, Bill offered to sell it to me but, happily, he kept working with us all. It has been a great honor to own the Seattle Mystery Bookshop since 1999. Sadly, that is now going to come to an end.

The Seattle Mystery Bookshop will close on Saturday, September 30th at the end of the day.

Why? There are so many reasons. Blame Amazon? Sure, that’s the easy thing to say but the massive changes in the world of bookselling are far larger than that. In fact, the changes in the over-all economy make it a much, much bigger story.

To be fair, you have to look back to the rise of mega-stores like Barnes & Noble. They were exciting but they began the phenomena of deeply discounting books. They wanted bodies in the stores, they wanted customers to buy books and CDs and calendars and to drink coffee and browse magazines and they were willing to use books as a loss leader to get you in there. And people went. There was no way for small independents to compete with what a large corporation could do, or what they demanded from the publishers. Publishers paid more attention to them because they had to. Publishers let them do things (claiming a certain percentage of damage from each shipment without detailing which and what; getting placement fees for putting books in prominent places; author events denied to small shops) not allowed to the small independents. That would come back to bite them when Borders collapsed and left a significant hole in the publishers’ business model.

The next blow to independent booksellers came from the rise of e-books and here, too, publishers made a terrible mistake. For decades, publishers released some books in hardcover and some as paperback originals – mass market paperbacks to be precise. In a year, the books in hardcover would usually be released in paperback. That way, those who could afford to buy hardcovers and who didn’t want or need to wait could get it when it was new. Those who couldn’t afford the hardcover price knew they could get it at the library or get it in paperback in a year. This was a model that allowed all budgets to get books – a true mass market for books.

. . . .

[Publishers] allowed a far less expensive version of their books to be available right away, undercutting the sale of hardcovers with the cheaper e-version. What they should’ve done was to give the hardcovers time to sell before releasing the e-book along with the mass market. But they didn’t. They way they did it took the legs out of the publishing of hardcovers. In reaction, in order to make up for dropping sales, they upped the price of all books, driving more of the market to the cheaper alternative of e-books. And they blew it with paperbacks, too. They said the marketplace was moving away from mass markets, that readers, and bookclubs, and booksellers wanted trade paperbacks at twice the price of the mass market. The mass market paperback was dead. If it was, they murdered it.

. . . .

The American Booksellers Association moved to stem the tide of readers going to e-books by making it possible for independents to sell them too. But it was pointless. You can’t pay the rent and your employees with the sale of dirt cheap e-books. That’s a business model that cannot work unless you’re a huge outfit that also sells tires and tubesocks.

. . . .

For the last decades, the entire publishing world – bookshops, publishers, authors – had been supported by huge post-WWII generations who moved up through their jobs and had the extra money to spoil themselves and their children, and to begin collecting books, collecting hardcovers. After all, there was no alternative to the printed book until books on tape in the late 80s.  As their collections grew, they became more sophisticated in their collecting. They demanded first editions, preferably signed. They’d wait for them, not needing to read them when the book first came out, as long as they’d be able to add another signed copy to the shelves. They’d backfill too, searching for titles they’d missed from an author they’d only recently began to collect. Author tours became the thing and bestselling authors were created from huge lines of collectors and fans. Piles of books would evaporate during a signing and unknown writers quickly became bestsellers authors.

But now that generation of collectors has begun to retire from it. They’re downsizing from the homes in which they reared their children and are moving to smaller apartments or condos or retirement centers. They don’t have room for the collections they so lovingly built. They want them to go to others who will cherish them because their kids or grandkids don’t care.

. . . .

Then, too, there was me. I don’t have the easiest personality and I rub some/many people the wrong way. I can be too impatient and prickly and more than a few people have referred to me as a curmudgeon. I am all of that. I have always known that I have been the shop’s greatest drawback and I know it contributed, in some way, to the fall in sales. If I caused you to shop here less, I apologize.

. . . .

We’ve fought with publicity departments [at major publishers] for over two decades to be seen as a viable location for their Big Name authors. I’ve made the point that if they don’t send their Big Name authors to us we won’t be here to help their beginning authors get to be Big Names.  I’ve beseeched authors we used to normally get for formal signings but who are now brought by only for stock signings that we need their help, that we need them to talk to their publicity departments. Most shrug it off, declining to get involved with tour schedules. Those who have benefited from the exposure and attention of little shops, who are so grateful for our help launching them into bestsellerdom suddenly do not wish to use their power and leverage to help those who gave them attention and benefits.  “I contacted sales and all the tip-ins went to Barnes and Noble. I have no control over that…” Well who the hell has more control that a major bestselling author?  We’ve done what that author said, we’ve repeatedly asked authors for help… and here we are.

Link to the rest at Seattle Mystery Bookshop and thanks to Dave for the tip.

Hey, Websites: Think Before You Link to Amazon

16 October 2017

From Publishers Weekly:

They look harmless—just underlined words—but links in online text matter. Consider, for instance, what happens when a magazine or website asks indie bookstores for reading recommendations. Last month, an entertainment site reached out to Michael Fusco-Straub, who owns Books Are Magic in Brooklyn with novelist Emma Straub, and invited him to contribute to an article titled “Bookstore Employees Share the Fall Books They’re Most Excited For.” He wrote up a few favorite books. So did I, representing Parnassus Books in Nashville, when I was contacted recently by a lifestyle magazine seeking the best new reads recommended by “the experts at independent bookstores.” The finished pieces were published with all the book titles linked to Amazon. Ouch.

Michael and I contacted the respective publications. Surely they could see the disconnect in sourcing a book list from local bookshops and then pushing readers to buy those books from an online discount megastore? Both removed the Amazon links. But why did we have to ask?

It seems to be a trend. Even as people seek out the expertise of indie booksellers, they treat Amazon as the default for book links. Bloggers write about shopping local while linking to Amazon. Authors appeal to bookstores for book tours and sales but announce their books on Facebook with Amazon links (yes, even for a book titled How to Find Love in a Bookshop).

Outlets and individuals who publish compelling content exert some control over the cultural conversation. With their choice of links, they drive consumer behavior as well. It’s one thing to publish a book review; it’s another to publish a book review in which each book title is linked to a website that sells books. One is a piece of criticism; the other is criticism and a sales tool. When people click those links, a habit forms. Book-loving social media users, bloggers, and editors have the power to shape those habits.

What if book titles in online media linked to each book’s page on its publisher’s site instead, where the “buy” button offers multiple options? Or what if titles linked to IndieBound.org, the online shopping site managed by the American Booksellers Association, which connects users to the independent shops nearest them as well as indies that ship nationwide?

Link to the rest at Publishers Weekly and thanks to Nate at The Digital Reader for the tip.

As Nate points out, IndieBound.org, “the online shopping site managed by the American Booksellers Association” is not the web’s finest ecommerce site. But it’s not really supposed to be about ecommerce, but rather encourage readers to visit physical bookstores (or Kobo for ebooks).

There’s a prominent button on the front page of IndieBound that reads “Locate an Independent, Local Bookstore”.

PG clicked on that button and was immediately transferred to a form that invited him to enter his zip code to find his local indie store. A “Distance” dropdown menu defaulted to “100 miles” which didn’t feel terribly local for PG.

PG changed the distance to a more localish 10 miles and found two suggestions.

The first was a university bookstore with less than convenient parking, a mallish ambiance and a likelihood of approximately .001% of ever seeing the same employee on two consecutive visits.

The second local indie bookstore actually looked interesting on Google streetview but was located next to a seedy-looking bar and a pawn shop. PG may check that one out during daylight hours.

Or he may click on Amazon.

PG will note that, between two universities, there are about 70,000 students with associated bookish faculty, etc., within 10 miles of Casa PG. He expects most of this group shops on Amazon.

Bookstore Sales Dropped 10.9% in August

13 October 2017

From Publishers Weekly:

Bookstore sales tumbled 10.9% this August compared to August 2016, according to preliminary figures released by the U.S. Census Bureau on Friday. Sales in August were $1.39 billion, down from $1.56 billion a year ago.

. . . .

August also includes sales from college stores as students start the fall semester and the decline likely reflects lower sales in those outlets. (August is typically the first or second biggest month for bookstore sales).

. . . .

The large decline in August led to a 2.5% drop in bookstore sales in the first eight months of 2017 compared to the same period in 2016.

Link to the rest at Publishers Weekly

It seems like just yesterday that people were getting tired of screens and returning to printed books.

Is This The Death Of Retail As We Know It?

2 October 2017

From Seeking Alpha:

The tremendous ructions occurring in the retail industry continue and are gaining momentum at a tremendous pace as Amazon and the rapid growth of e-commerce progresses. Already the number of bankruptcies in the retail industry for 2017 thus far have exceeded all of 2016 and there are signs of more to come.

Indeed, even retailers typically perceived to be resistant to the disruptive influence of Amazon and the rapid growth in popularity of e-commerce have proven vulnerable.

The Oracle of Omaha Warren Buffett considered by many to be the world’s greatest investor also chose to weigh in on the debate earlier this year, stating at the Berkshire Hathaway annual meeting:

The department store is online now, . . .

There are a range of signals which indicate that it is only going to get worse for traditional bricks-and-mortar retailing which makes it foolish for investors to consider investing in the industry.

. . . .

North American retailers are filing for bankruptcy at a record rate this year. According to industry data over 35 retailers in the U.S. alone have filed for bankruptcy this year with some of the standout names being Toys R Us, Payless ShoeSource and Radio Shack. It isn’t the first time for Radio Shack, it filed for bankruptcy protection just a little over two years ago because of similar problems including a challenging operating environment, rising competition and dwindling sales.

. . . .

The bad news doesn’t stop there, many major department store chains focused on cutting costs by reducing their operational footprint through store closures because the unprecedented competition created by e-commerce and Amazon has left very few other options.

One-time industry leader Sears is aggressively closing stores in a desperate bid to survive. The embattled retailer closed 180 stores during the fiscal year 2017 and plans to close another 150 by the end of its fiscal third quarter which amounts to roughly 10% of its remaining Sears and Kmart locations. For the second quarter revenue fell by a deeply worrying 23% year over year while comparable store sales declined 11.5%.

. . . .

Department store chain J.C.Penney which saw second quarter comparable store sales slip by 1.3% year over year doesn’t appear to be much healthier. It has also embarked on an ambitious restructuring strategy which involves closing 138 stores over coming months.

. . . .

Long-time industry stalwart Macy’s is also planning to close 88 stores and layoff thousands of employees.

. . . .

According to the report grocery shopping’s transition to online will occur at a far more rapid rate than other industries that have already done so such as banking or media because of a greater acceptance of e-commerce among consumers.

Younger, newer and more engaged digital shoppers adopt digital technologies more quickly, and will hasten the expansion of digital grocery shopping further.

. . . .

In a stunning revelation of just how fast e-commerce sales will grow, the National Retail Federation has forecast that as a proportion of total retail sales they will expand by 8% to 12% annually. This is around three-times greater than total retail sales, indicating that e-commerce’s share of total retail sales will grow at a rapid clip.

. . . .

For the reasons discussed investing in bricks-and-mortar retailers is becoming increasingly unappealing and risky. The depth and breadth of the industry’s transformation coupled with rapidly changing technology as well as an increasing appetite among consumers to accept technological changes places almost every bricks-and-mortar retailer under threat.

Link to the rest at Seeking Alpha

PG notes that some of the recent discussions about Barnes & Noble on TPV, have tended to focus on physical bookstores vs. Amazon as an isolated battle.

As indicated by the OP here and in many other posts on TPV, the movement from bricks & mortar to online sales is a megatrend affecting all sorts of different retailers. If people buy children’s clothing online instead of going to Target and small appliances online instead of going to Sears and office supplies online instead of going to Staples, why would books be any different?

There is one additional factor that does make books special, but not in a way that benefits Barnes & Noble and other physical bookstores.

PG is not aware of eclothing or eappliances, but he and many others are regular consumers of ebooks.

Due to a combination of disastrous decisions by management and incredible ignorance of ecommerce and all other things internet, Barnes & Noble squandered the opportunity to leverage its brand and relationship with millions of longtime Barnes & Noble customers into a dominating online store for ebooks (very high profit margins once properly-designed infrastructure is in place) and physical books.

Competent management of any b&m bookstore chain should have looked at ebooks as a wonderful source of increased revenues and profits. Instead of supporting a business structure to deal with thousands of poorly-paid store employees managed by hundreds of not much better paid store managers, a relative handful of well-compensated technical, design and marketing employees located in one place could have generated expanding revenues with consistently higher profit margins.

PG appears to be suffering from an attack of run-on sentences today, so he will stop. The blindness of the entire traditional book business to the opportunities for online sales, particularly of ebooks, is prime fodder for dozens of business school lectures, case studies and discussions for decades.

The secret to Amazon’s success? It’s constantly trying new things

27 September 2017

From TeleRead:

Quora is a fun and interesting tool sometimes. It’s kind of neat to see what sorts of things people might ask (though, admittedly, about 95% of the questions are completely banal), or what they might say in answer to your questions.

But sometimes a question on Quora can serve as a writing prompt to get you thinking. For example, my answer to someone asking “Why doesn’t Barnes and Noble have something similar to Kindle Unlimited for Nook?”

As I note in my answer, the better question might not be so much why Barnes & Noble didn’t, but why Amazon did. And that led to me recalling all the other things Amazon did.

. . . .

Remember how Amazon began? It was a simple little bookstore site devoted to the proposition of selling paper books, just like your average Waldenbooks, Borders, or Barnes & Noble, but doing it over the Internet.

That’s all Amazon was, and all Amazon did, in the beginning. It was a store where you could buy physical goods over the Internet—like about a zillion other stores back in the day. It wasn’t even the only Internet bookstore! For the longest time, I only ordered books from Books a Million (I had a loyalty club membership and everything), because I had been annoyed at some obnoxious thing or other Amazon had done, so long ago that I can’t even remember what it was now, and had the foolish notion that my “boycott” of Amazon might have some effect.

. . . .

But what put Amazon out in front of all the rest of them? Well, just look at everything Amazon is and does now. An expanded merchandise selection beyond (way beyond) books. The Kindle. Kindle Desktop Publishing. Amazon Prime. Amazon Prime Now.Amazon Music. Amazon Streaming Video. The Kindle Owners Lending Library. Kindle Unlimited. The Fire Tablet. The Amazon Echo. Sunday mail delivery. Amazon Dash buttons. And on. And on. Every single one of those things was, at one time, something completely new Amazon was trying, and had its share of skeptics. And yet, all of those things have stuck around, so far.

And that’s the secret, really. Since it started acquiring the cash flow to end all cash flows. Amazon has never rested on its laurels.

Link to the rest at TeleRead

B&N didn’t have the culture or financing to compete with the likes of Amazon and Google

22 September 2017

From Publishers Weekly:

During its annual meeting held Tuesday morning at its flagship store in New York City, Barnes & Noble chairman Len Riggio supported its new CEO, Demos Parneros who was named to his current role in April.

During the meeting, Riggio called Parneros “the perfect fit” to help the company grow its top line and improve profits. Observing that Parneros “has brought lots of energy to the company,” Riggio said he is looking forward to watching the executive over the next few years, noting that Parneros shares his vision and will revive B&N “store by store.”

. . . .

Riggio also assured shareholders that B&N is no longer in the tech business. While the Nook e-reader and e-books will remain a part of the company’s offerings to customers, bricks and mortar stores will be its focus. Riggio explained that when e-book sales began exploding several years ago, B&N felt it had no choice but to enter the digital market. In retrospect, Riggio said, B&N didn’t have the culture or financing to compete with the likes of Amazon and Google.

Instead, according to Riggio, B&N will focus on its physical stores and will partner with technology companies to keep a presence in the digital space. “There is no business model in technology” for B&N, Riggio acknowledged.

Link to the rest at Publishers Weekly and thanks to Nate at The Digital Reader for the tip.

PG says the Nook business was doomed from its earliest days. The big reasons are:

Riggio didn’t want to pay for top online talent.

This was evident from the first time PG visited the Nook Store. Poorly designed and poorly executed. And it never really changed.

Real tech talent is rare and in great demand. In the beginning, for the right money, skilled tech people would have gone to work at Nook, but Barnes & Noble wanted to pay bookstore salaries.

PG has no idea if Nook tried to hire really good talent at the right price after it became clear that the Nook Store was a disaster. Unfortunately, by that time, serious tech talent wouldn’t have come regardless of salary because nobody wants to clean up someone else’s mess and a line mentioning the Nook Store would have been deadly on the résumé.

Besides, nobody would have believed Barnes & Noble stock options would ever make them rich at that point.

The Nook Store set ebook prices at a level designed to support the print book prices in its stores.

One of PG’s least favorite things to hear during a product planning meeting is, “We don’t want to cannibalize our existing business.”

The problem is that, if your business is cannibalizable by you, it’s cannibalizable by somebody else. Jeff Bezos has always been a happy cannibal.

Low ebook prices combined with instant availability fueled Amazon’s early dominance. Over time, by cultivating successful indie authors, in part by using Kindle Unlimited, Amazon has added tens of thousands of high quality titles that Riggio couldn’t sell if he wanted to.

Amazon vs. Big Bookstores and Big Publishing is going to be a classic business case used in MBA programs around the world for decades to come. Brains and speed beat money and size once again.

At Annual NEIBA Show, Booksellers Slam Amazon and Toast Each Other

22 September 2017

From Publishers Weekly:

The annual New England Independent Booksellers Association (NEIBA) gathering in Providence, RI, boasted big names and even one big outburst, when the host of the New England Book Awards Banquet, Joe Donahue, kicked off the evening with a loud expletive about Amazon.

. . . .

Porter Square Books marketing director Josh Cook’s session “Be a Nerd, Not a Brand,” was representative of the broader balance between business education and an encouragement for booksellers to be who they are. At the beginning of his session, which aimed to get booksellers to sell more books through social media, Cook promised that attendees would, “come away with actions and a mindset for sharing joy with your community on social media.”

. . . .

The New England Book Awards banquet dinner captured the spirit of the show. Donahue opened to loud applause after yelling “F*** Amazon,” as he stepped to the podium. The rest of the dinner, though, displayed the warm camaraderie of the close-knit regional community.

President’s Award-winner and acclaimed novelist John Irving told the audience that his ties to the region were so strong that he thinks of himself “more as a New England writer than as an American writer.” After the event, Irving hung around to chat with booksellers and the Independent Spirit award from Water Street Bookstore, which received the Independent Spirit award, and is located in the author’s hometown of Exeter, NH.

Link to the rest at Publishers Weekly

Those New England booksellers have always been a classy group. PG can hardly wait for a ticket to their banquet next year (maybe at a McDonald’s in Vermont).

Looming Toys R Us bankruptcy has odd parallels to Barnes & Noble’s situation

22 September 2017

From Chris Meadows at TeleRead:

I just ran across a CNBC piece on a potential Toys’R’Us bankruptcy filing. The toy retailer may not necessarily plan to go out of business, but a bankruptcy filing could allow it to restructure its massive load of debt so it can stay in operation.

At first glance, this doesn’t seem to have a whole lot to do with ebooks, but on a closer read, it’s really interesting to observe some of the parallels between Toys R Us’s situation and things that have been happening to bookstores over the last few years.

For example, there’s this paragraph:

A Toys R Us bankruptcy does not necessarily mean the company will close stores, and retailers such as Macy’s have operated through bankruptcy before. For the major toy companies, there may be vested interest in Toys R Us successfully coming out the other end of a debt restructuring.

. . . .

The CNBC piece goes on to say:

Beyond offering the toy companies a place to sell their products, the retailer often does so without marking their prices down as much as big box retailers like Target. The retailer’s vast space and toy-centered raison d’etre give toy companies a unique venue to sell their product.

“They’re the only true showroom the industry has,” said toy industry analyst Richard Gottlieb.

You could replace “toy companies” with “publishers” and “toy-centered” with “book-centered” and you’d perfectly describe the role of bookstore chains like Borders—and, for that matter, Barnes & Noble. The bookstores don’t mark their book prices down as much as big-box stores, but they have a much bigger selection. It’s that selection of books that people can look at and browse and flip through in person that publishers and their advocates bemoan losing as sales migrate more and more toward on-line. They’re also“the only true showroom the industry has,” if you’re talking about the publishing industry. Of course, Amazon can outdo both the toy stores and bookstores on both price and selection.

Another odd toys-to-books connection is that, elsewhere, the CNBC article mentions that another problem toy stores face is “children who increasingly prefer tablets to toys.” But the article never goes on to elaborate on that point, even though it entitled the whole article section “Tablets over toys.” (If you look elsewhere, though, you can find articles about research showing that kids are playing with tablets more than traditional toys—even as they seem to prefer to read books on paper rather than the screen.) Certainly tablets like the Fire 7 are getting cheap enough that they cost less than some children’s toys, and they do have a broader range of uses than an articulated chunk of plastic.

The piece does touch directly on Amazon, though, at the very end—when it discusses how toy companies could wean themselves away from dependence on Toys’R’Us by turning to alternative sales channels.

One of the quickest growing channels: Amazon. The e-retailer is the “beneficiary of [the] millennial parent,” said [Jefferies analyst Stephanie] Wissink, as Amazon is “quickly becoming the No. 2 toy retailer behind Wal-Mart.”

You would think, from the way the publishers allowed Borders to die and don’t seem to be doing a lot to try to save Barnes & Noble, that they should be trying to wean themselves over to alternate channels than big bookstore chains. The problem is, they have that love-hate relationship with Amazon, the mega-store that sells more than half of their books for them at the moment. The last thing they would want to do is give Jeff Bezos even more power.

The odd thing is that the CNBC article never directly touches on the way that Amazon’s ascendancy to “the No. 2 toy retailer” position might also be responsible for some of the financial troubles Toys R Us finds itself in.

Link to the rest at TeleRead

As we look to reinvent our customer value proposition

21 September 2017

From Barnes & Noble CEO Demos Parneros (the fourth BN CEO since 2013) on an investor call on September 7, 2017, about five months since he had become CEO. Prior to coming to Barnes & Noble, Mr. Paneros spent about 30 years working for Staples. During the call, Barnes & Noble announced yet another decline in revenues, down 6.6% from Q1 2017.

Per the observations of Nate at The Digital Reader, PG noted a word salad being thoroughly tossed during the call. A partial transcript follows with a link to the entire transcript at the end.

The first portion is excerpted from Mr. Paneros’ prepared introductory remarks. Partway down, PG includes a few answers he gives to questions from securities analysts. All statements were from Mr. Paneros:

As we look to reinvent our customer value proposition and growth sales, we’re focused on a number of initiatives to increase the value customers derive from shopping at Barnes & Noble. Our value proposition is comprised of membership, convenience, digital offerings and most importantly our stores where customers come to browse, discover, and interact with 26,000 knowledgeable booksellers.

Pricing is a key consideration and over the past few months, we’ve launched a number of price tests tied to our membership program to see which authors resonate best with customers and increase the overall value of the program. Our goals are to increase enrollment, conversion and visit frequency.

Beyond pricing, we’re also focused on growing sales by improving the overall shopping, browsing and discovery experience for better visual merchandizing and signage as well as personalized recommendations. This includes testing changes to existing store layouts and remerchandising certain businesses. We believe there are significant opportunities to manage our inventory better, increasing trends and reduce unproductive merchandize.

As part of our efforts to better understand customers and develop a robust data analytics program, we’ve recently installed customer counters in all our stores and reintroduced mystery shops. We plan to enhance customer engagement and personalization through improved customer insights. And recently we’ve established an analytics team building the foundation for better analytic rigor.

. . . .

In addition to the two new test stores we have in the pipeline, we are reviewing our entire portfolio in identifying opportunities to open new stores in new markets as well as opportunities to relocate stores as their leases expire instead of simply vacating markets. Our goal is to position the company for net store expansion.

Turning to our ecommerce business, online sales declined during the quarter as we cycled against last year’s eBook settlement and focused on improving margins and profitability through lower promotional activity. Our goals for this business are centered on improving performance and enhancements to our omni-channel capabilities.

. . . .

This includes our new prime-time program where booksellers focus exclusively on engaging with customers during peak hours as opposed to doing tests. We expect this initiative to increase conversion through higher customer engagement while decreasing costs by reducing non-productive tests.

. . . .

[Responding to questions from analysts]

And in terms of specific initiatives for the second half, I’d say that we’ve got a long pipeline of ideas and tests in place to drive sales, traffic, margin to really improve the business overall that range from store experience, conversion tactics to looking at offers, our efficiency membership program, price perception overall on the initiatives that we’re doing with our two channels. So there’s quite a bit in the pipeline and we’re actually meeting on a very frequent basis weekly to determine which things are really rising on our lift and which ones that we ought to drop off so that we can put things in place for the second half.

. . . .

In the past couple of years, we have closed some stores in markets we like very much. So we’ve got our eyes on those markets. There are also some very attractive targets where we don’t have stores. While that’s happening, we’ve been developing a smaller and newer very exciting store prototype that is almost ready but not quite there yet. So that’s some of our thinking. And our plans are to begin to replace very good stores and add opportunistically.

. . . .

So in terms of how far reaching, I’d say that at the moment we’re not very far reaching. We are more testing different value offers. We’re looking at different components from pricing, structures within the program. We’re taking a look at special timing for certain offers. So I’d say that we’re in the early stages of enhancing the program.

. . . .

I’ve had very productive meetings with our publishers who share similar goals to us. And they’re very focused on really providing the great experience in store. The teams I think partner very well together. We’ve actually established an even better cadence to meet frequently and to share successes and to challenge one another. So I think obviously having stores and product by using touch and feel and discovery have the highest importance to them and to us.

Link to the rest at here

Leonard Riggio, Barnes & Noble’s 76-year-old Chairman and the guy who really calls the shots in the company says Paneros has brought a lot of energy to the company.

Amazon and the future of physical retail

21 September 2017

From veteran publishing consultant Mike Shatzkin:

There are two parallel conversations about the future of retail that are quite active. One is within the book business and it centers around what the future will be — and will there be one? — for Barnes & Noble. The other one is about the future of retail competitors to Amazon in the broader sense, particularly the big retailers that anchor the malls and shopping centers and are depended upon to draw the traffic to all the other stores that share the same parking lots.

Whenever B&N announces financial results, the whole book business pays attention. When a chain with the ubiquity and brand of Toys R Us goes under, as it did last week, everybody pays attention.

Barnes & Noble has been feverishly changing executive management and delivering pretty vague and unconvincing strategic pronouncements in a context of declining revenues and a sliding stock price. Since B&N is both the single stop capable of putting a new title in front of the most bookstore customers and the single biggest retail customer for publishers’ backlists, it occupies a position of singular importance to almost every publisher.

Amazon may already be a bigger account for most publishers but that doesn’t change B&N’s unique importance. So it is not surprising that publishers obsess about the chain’s financial and operational health. And although I am still skeptical that their demise — or even a rapid shrinkage — is imminent, the consequences whenever it were to come to pass would be industry-changing.

. . . .

Of broader interest is the impact Amazon is having on all retailers. So many of them — Sears, JC Penney, Macy’s — are very obviously struggling. This year alone, we’ve seen stories about the death of department stores and other retailers from the Atlantic, Business Insider (citing Warren Buffet as their expert), and Time, among many others. Borders is gone. Radio Shack is gone. And then last week came the word that Toys R Us is filing for bankruptcy. So Barnes & Noble’s struggles are within a context that goes way beyond them and way beyond the book business.

. . . .

The current story attributes Best Buy’s success to the obvious tactic of matching Amazon’s prices and to soft factors like being quiet about cutting costs (so as not to panic the employees) and “staying humble”. But the one single operational change Best Buy made to enhance their competitive position actually demonstrates why Amazon has the advantage over them and everybody else. And why that is not likely to change.

The operational change Best Buy made was to use their distributed store inventory to ship online orders received centrally. The Times piece highlights the reduction in delivery time to customers that can be achieved by shipping from one of the 1000 stores that is closer to the purchaser than a warehouse with the same product. In fact, that’s only one of at least three advantages. The most significant is that they are undoubtedly able to fill orders with stock on store shelves that they would have lost completely by not having stock of the same item in a warehouse. The other is a much more efficient, and therefore profitable, use of their inventory. They effectively need less stock to fill more orders.

Link to the rest at The Shatzkin Files

PG says the history of retail stores in the US is one of more efficient and better-managed upstarts putting established retailers out of business. Why? Because customers liked the newer retail idea better than the old one.

Montgomery Ward, Sears (barely not dead), A&P, Marshall Field, Wanamaker’s, Gimbels, Eaton’s in Canada, Jacobson’s, Bamberger’s, Bullocks,  I. Magnin, Joseph Magnin,  and Carson Pirie Scott immediately come to PG’s mind. They disappeared because their customers went somewhere else.

Since Walmart was founded in 1962, it has put thousands of retailers out of business, including many small retailers in small towns.  And don’t forget how many bookstores that Barnes & Noble and Borders forced to close.

In each of these cases, customers voted with their dollars. Today, millions of people say, “I like Amazon better than Walmart” and “I like Amazon better than Barnes & Noble.” And spend accordingly.

Economic freedom in action.

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